Middle East

Handbook

Property and Construction Handbook

2014 Edition
2 Middle East Handbook 2014

Disclaimer

This report has been prepared solely for information purposes. Whilst every endeavor has been made to obtain
the best available data from appropriate sources, AECOM can give no guarantee of accuracy or completeness.
Any views expressed in this report reflect our judgment at this date, which are subject to change without
notice. Current forecasts involve risks and uncertainties that may cause future events to be different to those
suggested by forward-looking statements. No investment or other business decision should be made solely on
the views expressed in this report, and no responsibility is taken for any consequential loss or other effects
from these data. Advise given to clients in particular situations may differ from the views expressed in this
report. Reproduction of this report in whole or in part is allowed subject to proper reference to AECOM.
AECOM 3

FOREWORD

Welcome to the eighth edition of the this theme, our second article looks at
Middle East Construction Handbook, the complementary hospitality sector,
this year developed as a supplement to specifically hotel refurbishment and the
AECOMs inaugural International Property success factors required to maintain
and Construction Handbook (Blue Book). and increase competitiveness of assets
We hope that you will find this years as they progress through their lifecycle.
selection of articles, references and cost We conclude our article section by
data of value. providing a framework for successful
implementation of risk management.
Our economic round-up starts with a look As our 2014 industry survey shows the
at the state of the global construction Middle East construction industry still
industry, the risks and opportunities has some way to go before it can have real
prevalent in each continent and key confidence in its ability to manage risks.
trends such as the growth of mega We conclude with our reference articles,
cities. In 2014, to inform our section our international and regional cost data
on the Middle East construction and a brief overview of our Middle East
market, we conducted our first Middle Construction Survey.
East Construction Survey of industry
stakeholders. The survey provided insight We hope you find the information and
into the current and future shape of the analysis in the Blue Book and this Middle
construction industry as expressed by East Supplement of interest and value.
industry stakeholders in the region. The As with previous years we continue to
results reiterated the mixed performance seek feedback to support our drive for
of the year, judged against the high improvement in everything we do. Please
expectations for the region, but also contact the authors; Hamed Madani,
emphasized that the opportunities in the Maren Baldauf-Cunnington and Margreet
region remain strong, as reflected by the Papamichael via BI_MiddleEast@aecom.
optimistic expectations of those surveyed. com for further information and to take
part in the 2015 Middle East Construction
Our articles section starts with a look Survey.
at the theme park industry, as we see a
continuation of event and destination
driven developments being used as
a catalyst for wider economic growth
and development activity. In line with
4

MIDDLE EAST HANDBOOK

1
ECONOMIC ROUND UP
7 GLOBAL CONSTRUCTION OPPORTUNITIES AND
RISKS
15 MIDDLE EAST CONSTRUCTION REVIEW
32 COUNTRY STATISTICS

2
ARTICLES
25 1. THEME PARKS: SUCCESS FACTORS AND
CHALLENGES
38 2. OPTIMIZING THE VALUE OF HOTELS THE CASE
FOR REFURBISHMENT
46 3. RISK MANAGEMENT

3
REFERENCE ARTICLES
52 1. PROCUREMENT ROUTES
55 2. MIDDLE EAST FORMS OF CONTRACT
59 3. BUILDING REGULATIONS AND COMPLIANCE

4
REFERENCE DATA
65 GLOBAL UNITE
67 INTERNATIONAL AND REGIONAL COST DATA
70 MIDDLE EAST INDICES
80 BUILDING SERVICES STANDARDS
81 EXCHANGE RATES
83 WEIGHTS AND MEASURES

5
ABOUT AECOMS MIDDLE EAST
CONSTRUCTION SURVEY

6
DIRECTORY OF OFFICES
AECOM
About AECOM Middle East
For nearly 50 years, we have been working In Saudi Arabia we are supporting
in the Middle East to create a better
tomorrow.
We understand cities how they work,
how they grow, and how they thrive
across the built, social, economic and
natural environments they comprise. We
draw on our fully-integrated planning,
design engineering and architecture,
construction and management
capabilities to help make the regions
cities world class.
With over 4,000 staff in the GCC region
we are changing the face of construction
by advancing the most essential city
infrastructure projects. In Qatar these
include Dohas New Port Project and
Ashghals Expressways program in
addition to the management of Al Rayyan the advantage of international multi-
and design of Al Wakrah FIFA 2022
World Cup stadia and precincts, which
are helping to establish Qatar as an
international sports venue.
5
Jeddahs transformation into a safe,
accessible and sustainable city via
the Jeddah Strategic Plan, the Jeddah
Stormwater Drainage Program and the
program management of the Jeddah
Public Transportation Program.
AECOM has been developing cities in the
UAE since 1965 and been responsible
for many of the countrys leading
infrastructure and building projects
including currently, the construction
management of Abu Dhabis Midfield
Terminal.
At AECOM our strength is our people.
Our project teams of locally-based
professionals are backed by AECOMs
global resources. Together we offer clients
disciplinary project collaboration.
6

01

ECONOMIC
ROUND UP
AECOM
Global construction
Opportunities and Risks
The global construction sector
continued to recover in 2014 from the
repercussions of a multi-year economic
and financial crisis. In contrast to 2013,
when global construction growth was
still mainly driven by an outperforming
Asian market, large Western construction
markets, such as the US or the UK now
appear to contribute more significantly
to the global expansion.
Opportunities
Aging infrastructure in advanced
economies and the need to fill
infrastructure gaps in developing
economies will be the main drivers for
construction investment growth over
the coming years. In 2014, the global
construction industry is estimated to be
worth US$ 9.4 trillion, which is expected
to grow to just under US$ 12 trillion in
2020 representing a compound annual
growth rate (CAGR) of 4 percent (FIGURE
1). This overall growth outlook masks
stark differences between markets.
Prospects remain mixed with greater
recovery in some regions, while others
are likely to slow or even stagnate in the
near term.
7
Pent-up demand
The majority of growth is still expected
to come from emerging markets, where
urbanization and demographic changes
are driving investment need across
sectors. That said, the developing
countries share in global construction is
likely to have peaked and may stabilize
over the next decade. Whilst the large
gains made since 2007 were due to
large-scale infrastructure investments,
it was also a cause of the massive drop
off in investments in the developed
markets during the financial crisis. Some
of these countries hit by the crisis, most
notably the US, are now expected to
make a greater contribution to global
construction growth, spurred by pent-up
demand from years of subdued capital
investments and needed investment in
core sectors, such as oil and gas, and
infrastructure.
 8

FIGURE 1: GLOBAL
gure 1: GLOBAL CONSTRUCTION
CONSTRUCTION PROSPECTS
PROSPECTS

Total Global Construction

CAGR 4%

2014 2020
US$9.4 tr US$11.9 tr

Russia 3.1%
Qatar 8%
India 6.7%
UAE 4.6%

Nordics 1.8%
Poland 2.4%
Canada 1.5% Germany 2.0%
UK 3.5% Hong Kong 2.7%
Taiwan 3.3%
Netherlands 1.6% Japan 2.5%
France 1.3%
USA 4.9% Spain 0.1%
Belgium -0.3%
Italy 0.5% South Korea 2.0%
Mexico 2.4%
Turkey 4.9% China 7.6%
Bangladesh 6.5% Philippines 3.6%
Colombia 4.0% Egypt 5.0% Thaliand 4.5% Vietnam 7.4%
Singapore 4.4%
CAGR 2014 to 2020

> 5% KSA 3.5% Malaysia 4.3%

2.5% - 5% Brazil 2.7%
Indonesia 5.3%

0 - 2.5% Chile 4.3% South Africa 2.7%

Australia 3.6%
<0% Argentina 3.6%
New Zealand 4.3%

*Circle size indicates size of construction market

Source: Global
Source: Construction
AECOM, various Perspectives, Euroconstruct,
Government Statistics, various national accounts, AECOM
IHS Global

Urbanization and the growth of
mega-cities
The pace and scale of urbanization, and
by extension, the greater concentration
of population is putting transport and
utilities systems under strain, while
increasing the need for housing and
social infrastructure. Responding to the
need to create efficient and sustainable
cities is one of the largest challenges
facing economies, governments and the
engineering and construction sector alike.
A citys growth will be one of the main
drivers for construction demand. The
economic weight of cities varies across
regions, but typically mega cities make
a large contribution to countrys growth,
providing a high share of employment
opportunities (FIGURE 2). Together with
competition for skilled labor this is leading
to higher average incomes compared to
the rest of a country, meaning that cities
typically have a stronger consumer base.
This is particularly true in developing
economies. The urban population and
rising middle-to-high income households
will demand better connectivity, efficient
energy, water and sanitation services and
high-quality social infrastructure.
 9
FIGURE 2: ECONOMIC WEIGHT OF CITIES
FIGURE 2: ECONOMIC WEIGHT OF CITIES
REGIONAL URBANIZATION GDP PER CAPITA GAP
Number of Cities with more than 500,000 people Largest cities compared to regional
average (% difference)

Developing Asia-Pacific (DA-P) 42

Middle East + Africa (ME+A) DeA-P 2%
43
148
Latin America (LA) NA 8%
Eastern Europe + Central Asia (EE+CA) 52
Western Europe (WE) WE 12%

Developed Asia-Pacific (DeA-P) LA 32%

North America (NA) 78
EE+CA 44%
120
ME+A 68%
112
DA-P 69%

10 LARGEST CITIES BY GDP, US$ BILLION

Developing Asia Eastern Europe + Central Asia Middle East + Africa Latin America

211
516 80
72 52 48 167 131
95
225 57 473
92 139
520 65
262 93
141
427 101 77 166
265 150
102 411
128 177
281 320
115 162
302 301 195
309 131 161 348

Shanghai Suzhou Moscow Ankara Riyadh Jo'burg Sao Paulo Santiago

Beijing Chongqing Istanbul Budapest Abu Dhabi Dubai Mexico Bogota
Guangzhou Bangkok Warsaw Prague Jeddah-Mecca Cape Town Buenos Aires Brasilia
Tianjin Jakarta Katowice-Ostrava Izmir Kuwait East Rand Rio de Janeiro Monterrey
Shenzhen Delhi St Petersburg Bursa Cairo Durban Lima Belo Horizonte

Source: Brooking Institute, World Atlas, IMF

Source: Source: Brooking Institute, World Atlas, IMF

Demographic change Industrial needs

Demographics play a key role in infra-
structure demand, whether for education
(for young and growing populations such
as the Middle East and Africa) or health-
care (aging populations such as Europe).
In addition, the growing number of urban
middle-class households in emerging
markets is pulling infrastructure invest-
ment towards consumer-facing sectors,
including those needed for manufactur-
ing and logistics, as well as those in-
creasing connectivity, such as trans-
portation.
The manufacturing sector is a major
demand driver in both emerging and
developed economies. Buoyed by the
adoption of new technology and the
discovery of new reserves, countries like
the US, Canada and Brazil have already
started to invest heavily in the oil and
gas industries. This in turn is increasing
demand downstream into the heavy
manufacturing sectors, such as petroleum
refining and chemicals, as well as new
transportation and storage facilities.
10

Risks
Significant global disruptions could and companies success and business
clearly alter growth projections. Given continuity (FIGURE 3). Risks across a wide
the international nature of clients, spectrum not only affect the viability of
investors and the construction supply new and existing investments, but also
chain, external risks, whether economic, funding availability, growth opportunities
political or environmental, are a in a countrys market, as well as business
constant, if not growing, concern for the continuity of the supply chain.
delivery of projects, affecting projects

FIGURE 3: INTERNATIONAL BUSINESS RISKS

The construction industry is risk prone, with complex and dynamic project environments creating an uncertain operating
environment and outlook. Globalization has offered new opportunities for organizations in the construction sector to enter
international construction markets. At the same time, increased internationalization has made the industry vulnerable to various
technical, sociopolitical and environmental risks. These risk factors, which can have a large impact on operations and business
performance, are largely external to companies and thus are often outside the direct control of the management.

Increased geopolitical instability

Inter-state conflicts/ war with regional
impact
Public finances in key economies Governance failure in key economies
Cost of raising capital and Increased corruption and red tape
competition for funds Large-scale terrorist attacks
Oil price shock
Failure of finanical markets or a
major institution
Regulatory and economic instability

Political

Economic
Environmental

Societal +
technological
Greater incidence of natural
and man-made disasters
Greater incidence of extreme
Pandemic outbreaks weather
Uncontrolled urbanization Water shortage + food crisis
Extreme political and social instability
Data fraud
Breakdown in critical infrastructure and networks

Source: AECOM, IMF

 11

Asia-Pacific
Figure 4:
FIGURE 4:ASIA-PACIFIC
ASIA-PACIFIC CONSTRUCTION
CONSTRUCTION MARKET MARKET
Construction spending in Asia-Pacific ASIA-PACIFIC CONSTRUCTION MARKET
accounted for 44 percent of total global Market Share of Construction Spending

construction spending in 2013, led

by China the largest construction
4%
market in the world - Japan, India, and
6%
Australia (FIGURE 4). AECOMs 2014
Asia Construction Outlook highlighted
7%
the construction industrys expectation
that despite somewhat slower growth, 47%
the Asian market remains one of the
11%
key focus for investment. Infrastructure
requirements remain enormous and
transport, utilities and greater investment
for manufacturing and logistics are among
the main priority areas. 19%

Amid broadly positive prospects across

the region, China, India and Indonesia China Australia Philippines
are considered to be the most promising Japan Korea Bangladesh
markets, along with growing opportunities India Taiwan Singapore

in the Philippines and future potential Indonesia Thailand Hong Kong

in Myanmar. Despite the recent cuts in
capital spending, Chinas expenditure
plans are still significant, dwarfing all
other regional countries.
Malaysia
Source: AECOM 2014 Asia Construction Market Outlook,
Various National Accounts

Following the 2011 earthquake and
tsunami, Japan, in a bid to reconstruct and
revitalize the economy introduced wide-
ranging economic reforms. This included the
Fourth Science and Technology Basic Plan,
which set out spending of US$ 313.3 billion
over 20112015 to address demographic
challenges and reconstruction efforts. In
addition, in January 2013, the government
announced an emergency stimulus package
of US$ 110 billion, which focuses on public
work infrastructure, such as repairs and
the construction of earthquake-resistant
transport and energy infrastructure.
Consequently, the outlook for the Japanese
construction sector is brighter than it has
been for many years. However, given the
fiscal state of the country, construction
prospects will hinge on the Japanese
governments ability to deliver these
projects.
Apart from the well established large
construction markets in the region, such
as South Korea and Malaysia, there are
other fast growing construction markets
that are potential hot spots. Indonesia,
the worlds fourth most populous country,
is fast becoming a major construction
market. Others, such as Vietnam,
Philippines and Myanmar are expected to
be among those with the strongest growth
potential. Political risks, public finances
and bottlenecks in project execution are
the main risk to realizing the potential of
these markets. India could prove a faster
growing construction market than China
over the medium-term, if provisions are
made to meet the demands of a large and
growing population.
12

North America
North America is expected to account for
a significant proportion of the increase
in developed world construction volumes
over the next few years (FIGURE 5). After
a six-year decline, the US construction
market started to slowly recover in 2012
and this is expected to continue, with
growth picking up substantially this
year. The residential building market
is expected to see strong gains, while
Figure 5: US CONSTRUCTION ACTIVITY
FIGURE 5: US CONSTRUCTION ACTIVITY
US CONSTRUCTION MARKET
With the economy finally stabilizing, the construction outlook should finally see a substantial improvement
healthy fundamentals in the non-
residential sector are widely expected to
benefit commercial and industrial building
activity.
In both the US and Canada, shale gas
and oil has led to increased investment
in infrastructure and construction
of facilities related to extraction and
transport.

1,400

1,200

1,000
US$, billion

800

600

400

200

2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f 2016f 2017f

Nonresidential Residential Total Construction

Source: US Census, AIA Consensus Forecast

Latin America
Latin American construction growth as
a whole is expected to lag behind global
average growth rates over the years,
but some parts the region will perform
better than others (FIGURE 6). Chile and
Colombia are widely expected to perform
best, with the countries benefiting from
a more liberal business environment.
Smaller markets are seeing substantial
growth. For example, Panama is benefiting
from the Panama Canal expansion and
development of the Coln FTZ. In Brazil,
the regions largest construction market,
work has been delivered for the 2014 FIFA
World Cup, while projects associated with
the 2016 Olympic Games are underway. In
the medium-term, progress with regards
to energy and infrastructure-related
 13

projects will determine the construction to stand out from the rest of Western
industrys fortunes. Regionally, reforms Europe, with forecasters pointing to
are needed to target infrastructure gaps, growth of double that of the average rate
high and complex taxes and bureaucracy, in Western Europe.
and inconsistent regulations. If these
bottlenecks are addressed, the regions The Central and Eastern European
construction market could perform counties are likely to see an upswing in
stronger than currently envisaged. construction activity over the next few
years, led by infrastructure investments.
FIGURE 6: LATIN AMERICA
The region is scheduled to receive a
new wave of EU infrastructure funding
LATIN AMERICA CONSTRUCTION OUTLOOK for projects, as well as infrastructure
Figure
The outlook 6: LATIN
for the AMERICA
Latin American construction sector financing from the European Commission
is cautiously optimistic. Despite firm growth in a number
of smaller markets, the region as a whole is expected to and other European institutions.
underperform
LATIN AMERICA global averages asOUTLOOK
CONTRUCTION large markets such as Brazil
weaken post
Smaller 2015.
market to outperform from 2016
Russia was expected to perform much
8% better than many countries in the region,
but a deteriorating business environment
has now clouded the investment outlook.
6% Whilst public finances are sound and
able to provide funding for key projects,
constrained access to capital and falling
(foreign) private investment will impact
Annual %

4%
the flow of construction projects. In
addition, EU sanctions on Russia affect
target loans from the European Bank for
2% Reconstruction and Development (EBRD)
and the European Investment Bank (EIB),
both of which are an important source
for the funding for Russian infrastructure
0%
projects.
2014f 2015f 2016f

World Argentina Brazil
Source: KHL
Europe
Whilst an overall cyclical upturn in
construction investment is expected
in Western Europe, growth is likely to
be moderate as public finances leave
little scope for significant infrastructure
investments. Some countries are set to
perform better than others (FIGURE 7). The
UK, Denmark and Norway are anticipated
Chile Colombia The outlook for the Turkish construction
sector has also been affected by investor
nervousness about social, political and
economic headwinds. Nevertheless, the
countrys market should be supported by
better economic fundamentals compared
to its regional peers. Urbanization and
population growth is increasing demand
for residential and social infrastructure,
while the countrys strategic position
as a natural transport hub is fueling in-
vestment in transport systems, manufac-
turing and logistics facilities.
 Figure 7: CONSTRUCTION GROWTH IN EUROPE
14

FIGURE 7: CONSTRUCTION GROWTH IN EUROPE

2014 FORECAST 2015-16 FORECAST

Construction growth, % Construction growth, %, per annum

7.6 and more Ireland 7.6 and more Ireland

5.1 to 7.5 Hungary, Estonia, Turkey 5.1 to 7.5 Poland, Hungary

2.6 to 5
Sweden, Poland,
Switzerland, Lithuania,
Germany
0.1 to 2.5 Denmark, UK, Latvia,
Slovakia, Belgium, Austria,
Finland, Netherlands,
Norway
0 to -5 Italy, Russia, France,
Portugal,Czech Republic
Turkey, Estonia, Latvia,
Denmark, Netherlands,
2.6 to 5 Russia, Lithuania,
Norway, UK, Sweden
0.1 to 2.5 Portugal, Finland,
Slovakia, Belgium,
France, Germany, Italy,
Switzerland, Spain,
Austria, Czech Republic

-5 and less Spain

Source: Euroconstruct, June 2014, BMI

 15

Middle East
Construction Review
AECOM Middle East the market reliant on an improvement in
the UAE construction sector, as reflected
Construction Survey in the project awards sighted by MEED
(FIGURE 8).
In 2014 we conducted our first Middle
East Construction survey. The aim of
In contrast, despite large spending plans
the survey is to assess the state of the
in countries such as Saudi Arabia, Qatar
regional construction industry, examine
and Kuwait, the flow of project awards
the drivers and barriers currently at play
disappointed, due in parts to slow
and to reflect on concerns expressed by
political decision making and revisiting
our client organizations and other industry
of project scopes, highlighting the fact
stakeholders.
and associated risk that much of the
region remains reliant on governments
The outputs of our survey has informed
pushing ahead with their investment
our review of the Middle East construction
commitments.
industry as outlined in this section.
Our findings from the AECOM 2014 Middle
Industry performance East Construction Survey, reflects the
general divergent performance of the
Industry performance within the Middle industry within the region. A majority of
East was mixed over the past year, with those surveyed reported that industry
Figure 9: MIDDLE EAST PROJECT AWARDS + CURRENT PIPELINE

FIGURE 8: MIDDLE EAST PROJECT AWARDS + CURRENT PIPELINE

As of August 2014
800

700

600
US$, billion

500

400

300

200

100

-
2010 2011 2012 2013 2014e 2015+ f
Bahrain Iraq Kuwait Oman Qatar Saudi Arabia UAE

Source: MEED
 Figure 10: WORKLOAD EXPECTATIONS AND RISKS TO OUTLOOK
16

FIGURE 9: WORKLOAD
WORKLOAD EXPECTATIONS
EXPECTATIONS AND RISKS TO OUTLOOK
AND RISKS TO OUTLOOK

Degree of Certainty Workload Expectation over the next 3 Years Demand Fundamentals

Industry Company

% of Respondents expecting Increase/ Decrease in Workload

Workload Workload
54%
100% 100%

Industry Opinion - Change in Workload driven by

fundamentals or speculation % of Respondents
48% 36% see growth
Industry Opinion - % of Respondents

driven more by
80% 80% fundamentals

36%
60% 60%

25%
40% 40%
21%

16%
20% 20% 28% see
growth driven
more by
speculation
0% 0%
Highly Certain
Certain Steady Up 1-5% Up 6- Up More driven by speculation
50:50 0% 10% >10% than fundamentals
Uncertain 50:50
Highly Uncertain Industry Workload Company workload More driven by fundamentals
than speculation
Source: AECOM 2014 Middle East Construction Survey

workload increased over the past year. Egypt and Kuwait are more doubtful
However, despite the generally improved about industry prospects. Such findings
industry performance a significant are largely consistent with the trading
proportion of respondents saw their conditions in these countries.
company workload fall over the past year,
in particular outside of the UAE. Political In the UAE, there appears to be a general
uncertainty, instability and security consensus that latent demand from
concerns in some parts of the region stronger economic growth and sentiment-
have led to a stagnation of work in those driven demand boosted by expectations
countries. surrounding Expo 2020, has led to more
new projects starting to emerge. Generally,
Positive views on growth the industry is expecting an ease in
financial restriction helping the flow of
Looking forward, the vast majority of government-led projects and increased
respondents to our survey are optimistic ability to obtain debt finance for project
over future growth, in the industry as a spend. Workload expectations center
whole and their companies prospects around infrastructure and transport,
(FIGURE 9). In both cases the respondents such as aviation investments, while work
are certain about their projections. The associated with the Expo 2020 is seen
most positive responses come from as a catalyst for real estate projects.
businesses in the UAE, while those in Parallels are being drawn to the preceding
boom-bust cycle. Opinions are divided

as to whether the increase in expected
project awards is driven by fundamentals
or speculation and our survey shows that
a small majority tends to believe that the
current growth is driven by a fundamental
improvement in demand. Nevertheless,
there is some uncertainty surrounding
current demand levels, with a significant
portion of the industry questioning its
sustainability should sentiment turn.
In Qatar workload expectations center
around preparations associated with
the 2020 FIFA World Cup and associated
infrastructure investments, which
have been impacted by recent news
of government plans to downsize the
scope of the event, including reducing
the number of stadiums and Doha
Metro scheme in an effort to cut costs
(Source: MEED). Whilst economically it
may make sense to reduce the scale of
the investments given the limited size of
the country, it does create uncertainty
in the industry supply chain who have
been gearing up to support the work.
Despite the slower than expected flow
of project awards in Saudi Arabia over
the past 18 months, expectations are
that several large-scale transport and
social infrastructure projects (such as the
education built program) that have been
delayed will finally be executed.
While some of the industrys players are
optimistic to achieve revenue growth well
above the sector average, more companies
expect that they may undershoot the
market slightly though they attach greater
certainty over their workload expectations
than in wider market growth. Those that
expect strong workload growth for their
companies over the next three years cite
having rationalized and reorganized since
the recession as their main strength to
capitalize on the economic upturn. Some
also report that it is their mobility and
17
flexibility that is their greatest strength,
allowing them to respond swiftly to
upcoming opportunities.
Growth Areas
According to our research, construction
opportunities backed by real economic,
social and global event needs are the
dominant reasons for industry confidence
in the region, with the supply chain
seeking business across a number of big-
ticket public capital projects. A low-tax
environment, relatively low regulatory
restrictions and stability of countries
are also cited as inducing businesses to
invest. Economic growth, urbanization and
population increases are placing pressure
on water, electricity, transport and social
infrastructure, and are considered key
drivers for industry demand.
Transport is seen as the dominant sector
by the construction industry which is
enjoying a boom thanks to airport-related
work, metros in several cities and other
initiatives. According to MEED there
are US$ 278 billion worth of transport
projects in the current award pipeline.
However, whilst more than two-thirds
say that they expect strongest industry
growth in rail, road, and airport related
work, just 38 percent of respondents
expect their companies growth to
be driven by transport-related work
(FIGURE 10). This years survey results
confirm that construction firms are still
heavily dependent upon governments
infrastructure plans for future growth,
with two-thirds of respondents citing
this as the single most important market
driver. Such reliance means that any
public belt tightening could potentially
cut off a vital source of new projects.
Indeed, despite the large potential of
the Kuwaiti construction market, the
industry continues to be hampered by
18
Figure 11: GROWTH EXPECTATIONS AND COMPANY PRIORITIES
FIGURE 10: GROWTH EXPECTATIONS AND COMPANY PRIORITIES

EXPECTED PROJECT AWARDS 2014-16 INDUSTRY GROWTH SECTORS VS. COMPANY PRIORITY SECTORS
GCC + Iraq
Progressed projects only, Number of Projects
Total: US$ 876.7 billion 80%

2% 70%
Growth Expectation
vs Target Sectors
3% 60%
5%

32%

Commpany target sectors

7% 50%

40%

24%
30%

23%
20%

Transport Energy + Utilities 10%

Mixed Use Residential
Industrial Healthcare 0%
Public (civic + defense) Sport + Leisure 0% 10% 20% 30% 40% 50% 60% 70% 80%
Commercial Retail % of Respondents Expecting Sector Growth
Education Size indicator: Expected Industry Growth

Source: MEED Source: AECOM 2014 Middle East Construction Survey

Figure 12: GROWTH MARKETS
FIGURE 11: GROWTH MARKETS

Industry perception of growth markets and

companies' focus regions political deadlock and the flow of projects
continues to be slow.
KSA

Qatar
Despite evidence of slow project flow,
Qatar is still seen as the market with the
UAE largest potential followed by the UAE. An
Iraq
equal share of survey respondents view
Saudi Arabia, Qatar and the UAE as their
Bahrain priority growth markets over the next few
Oman
years (FIGURE 11).

Lebanon

Kuwait

Egypt

0% 20% 40% 60% 80% 100%

Share of respondents expecting growth

Company Target Markets

Regional Growth Markets

Source: AECOM 2014 Construction Survey

AECOM
Growth Strategies and Investment Priorities
Respondents to this years global survey
appear to be open to new sources of
business. Two thirds of Middle East
construction firms say that they plan to
move into international markets with core
offerings, with Africa and the Americas the
main target regions. Survey respondents
say that they are aware of the necessary
skills and knowledge needed within
these new sectors and regions. Across
the industry, growth is expected to
come primarily through organic routes,
though 25 percent believe mergers
and acquisitions (M&A) will fuel such
expansion. Reflecting expectations of
industry expansion, 79 percent of survey
respondents expect their company to
invest in operational efficiency, while 50
percent expect investment in recruiting
a skilled workforce to meet business
targets. Other priority investment areas
are business and customer development,
Market pricing
Across the region, the pricing environment
remains very competitive and client
organizations continue to press for
the best possible prices, often through
competitive bids followed by negotiation.
Increased price levels are being sought
by contractors, but market evidence
highlights that competitive pricing is
still prevalent in the marketplace. In
fact, pricing levels are keen for those
projects that are viewed favorably
by contractors, where a coherent
procurement framework is in place, risk is
apportioned appropriately, or the project
is considered a must-win. Generally, the
industry reports that there is currently
still plenty of capacity when it comes to
labour, though the market appears to
have shifted more to equilibrium with
regards to capacity for building materials
19
as well as new services and products
offerings together with information
technology. (FIGURE 12).
FIGURE 12: COMPANY INVESTMENT PRIORITY TO
ACHIEVE GROWTH
79% Operational efficiency
50% Recruiting skilled workforce
46% Business/customer
development
33% New services, products
29% Information
Technology (systems)
Source: AECOM 2014 Construction Survey
and plant and equipment (FIGURE 13).
Consequently, trends in tender prices over
the past year have ranged from relative
stability, to a gradual upward shift in
countries where industry volumes have
increased.
Our industry survey shows that input cost
inflation in the region is currently driven
by wages. Concerns have been voiced
in Saudi Arabia, where the construction
industry has been impacted by the
introduction of the Nitaqat system,
which has led to a reduction in the use of
expatriate labour. Whilst the government
expects that constraint will be temporary
as local labor sources will be more widely
used, it has nevertheless disrupted
workflow over the past 18 months and
added to labor cost pressures.
20

Figure 14: CAPACITY IN THE BUILDING INDUSTRY

FIGURE 13: CAPACITY IN THE BUILDING INDUSTRY

Share of Respondents
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0
Current Over next Current Over next Current Over next Current Over next
3 years 3 years 3 years 3 years

Materials Plant & Equipment Labor - Contractors Labor -Consultants

Idle/ Plenty of capacity Balanced supply/ demand Strained/ No Capacity

Source: AECOM 2014 Construction Survey

Figure 15: TENDER PRICES AND PROFIT MARGINS
FIGURE 14: TENDER PRICES AND PROFIT MARGINS
Looking ahead, the industry expects
capacity constraints to emerge in Share of Respondents
particular for key materials and Last 12 Months Next 3 years
contracting labour. The construction 100%
industry across the region has
consolidated significantly in recent years, 80%
increasing the possibility that prices
could come under significant pressure if
workload expands to the levels expected 60%

over the next few years, unless there is

a marked increase in contracting and 40%
materials supply capacity.
20%
Increased confidence and the psychology
of pricing on the back of higher work
volumes will see prices increase 0
accordingly, though variation by markets
will remain (FIGURE 14). -20%
Tender Prices Tender Prices
Increased >5% Increase by>10%
Increased by up to 5% Increase by6-10%
No change Increase by1-5%
Decreased by up to 5% No change

Profit Margins
Balance of increase/decrease

Source: AECOM 2014 Construction Survey


Challenges + Risks
The focus on Building Information
Modeling (BIM) and how this is impacting
on project performance is seen as
among the key improvements in industry
practices over the past years in the region.
In addition, the industry reports that
advancements are being made in the
prioritization of projects, transparency
and accountability, and business case
evaluation, which is helping the supply
chain to invest in resources and plan
ahead to deliver projects.
Of all the potential barriers to progress,
the biggest concerns are over political
continuity in the context of geopolitical
risks, resource availability and changes
in government spending plans. Private
sector financing, risk management, and
bureaucracy and regulation are also
seen as major challenges to the regional
industry.
1. Reliance on government investment
A large proportion of the Middle East
construction sector remains heavily
reliant on public sector work, particularly
outside the UAE. Despite the fact that
government finances are generally strong
throughout the region (in the GCC), there
appears to be a lack of committed funds
in certain parts of governments in the
region. A lack of transparency in policy
making and changes to program scopes
over the past year have added to industry
uncertainty in a number of countries.
In particular, the delivery market cites
onerous bureaucracy as the main
challenge, which delays the approvals and
permitting process and impacts client
decision-making, which in turn affects
contractors and consultants cash-flows,
21
resourcing and workflow certainty.
2. Project finance diversification
Financial strength of the GCC
governments means that public-
financed projects continue to dominate
in the region; and this trend is expected
to continue. However, in addition to
public spending, the large number of
construction projects planned for the
region over the next years means that
project owners will have to attract
an increased amount of funding. This
is particularly crucial for Dubai if its
infrastructure and building plans are to go
ahead. Whilst investor confidence in the
Emirates finances has certainly increased,
banks, and in particular foreign banks,
remain cautious given recent experience
of deep haircuts and restructuring.
Lenders will remain reluctant to commit
funds as government and related entities
finance positions remain opaque and
debt levels are perceived as still being
high. Alternative financing options are
being explored to increase private finance
participation, including various public-
private partnership models, export credit
agency guarantees, and raising funds at
capital markets. However, whilst attempts
to diversify funding sources are welcome,
evidence of privately financed deals
remains patchy and more needs to be
done to convince the investor community
of project owners ability to proceed with
these projects (FIGURE 15).
22

Figure 15:PROJECT
FIGURE 15: PROFITFINANCE
MARGINS
3. Resourcing for growth
SOURCES OF PROJECT FINANCE
Whilst the industry is largely enthusiastic
Government, over the 3-year horizon, market
Local
Authority
conditions, though improving, have still
not reached the levels of 6 or 8 years
Local Banks ago, and companies remain somewhat
cautious about prospects. Indeed, our
Private Funds
survey shows that a number of companies
do not expect a large jump in workload
growth in the near term, with the main
International
Banks reason cited being caution over a ramp
up in resourcing that would be needed
Institutional should all projects go ahead as planned.
Investors /
Funds Such caution is understandable in the
construction sector that over the past
Public Private
Partnerships few years has seen boom and bust cycles,
and the industry will be seeking further
0%

10%

20%

30%

40%

50%

60%

70%

80%

evidence of a sustained commitment from

Balance of Respondents governments and the private sector before
committing to investment in resources.
Figure 17: BARRIERS TO PROJECT FINANCE
Main source of Project Funding
Expected Change in Finance over next 3 years 4. Capacity and price increases
Source: AECOM 2014 Construction Survey As the regions industries transition to a
BARRIERS TO PROJECT FINANCE firmer growth phase, there are a number
of operational and management issues
Risk Profile of Sector
that need to be dealt with. Supply chain
constraints, such as reduced capacity,
Cost of Financing
are magnified in smaller markets
End Valuation where the availability of skills and key
materials might be smaller or more
Loan to Equity Ratio limited. Additionally, margins are expected
to remain squeezed in the near term,
Level of pre-sales/
pre-commitment particularly as staff costs increase after
a remaining static for a number of years.
Risk Profile of Project The lag between immediate input cost
increases and higher output prices until
Risk Profile of Borrower
later in the project cycle compounds the
margin equation.
0% 10% 20% 30% 40% 50%
Share of Respondents

Source: AECOM 2014 Construction Survey

 23

Country Statistics
The table and figures below provide a summary of key macroeconomic statistics.

Saudi Arabia
Lebanon
Bahrain

Kuwait
Jordan

Oman
Egypt

Qatar

UAE
Land Area, km2 (1) 0.8 995.5 88.8 17.8 10.2 309.5 11.6 2,149.7 83.6

Capital City Manama Cairo Amman Kuwait Beirut Muscat Doha Riyadh Abu Dhabi

Population, million (2) 1.2 84.2 6.5 3.9 4.5 3.2 2.0 30.0 9.0

Population growth, CAGR 2009-13 (%) (2) 3.1 2.3 2.3 2.8 1.3 2.5 5.5 3.0 2.4

GDP, US$, billion, current (2) 32.2 271.4 33.9 185.3 44.3 80.6 202.6 745.3 396.2

Real GDP growth, % (2) 4.7 2.1 3.3 0.8 1.0 5.1 6.1 3.8 4.8

Real GDP growth, 2014-19 pa forecast (2) 3.6 3.7 4.3 3.4 3.3 3.6 6.8 4.2 4.1

GDP/Capita (PPP), US$ (2) 34,584 6,579 6,115 39,706 14,845 29,813 98,814 31,245 30,122

Construction Output, Share in GDP (%) (4) 5.9 4.6 4.5 (5) 1.7 4 (5) 5.4 (5) 4.9 4.8 9.0

Value of Construction Output, US$, billion 1.9 12.1 1.5 3.0 1.7 4.4 9.9 35.9 36.2

Project awards, US$ billion (3) 0.75 N/A 2.9 11.6 1.4 8.5 25.6 78.4 68.6

Consumer Price Inflation, % 3.3 6.9 5.5 2.7 3.2 1.3 3.1 3.5 1.1

All data are 2013 data unless otherwise stated (3) Source: MEED, Budget value of construction contract awards
(1) Source: World Bank (4) Value of Construction Output based on National Accounts
(2) Source: IMF (5) Estimate only

MENA ECONOMIC GROWTH FORECAST SHARE IN REGIONAL CONSTRUCTION MARKET

Based on 2013 Construction Output

Qatar 6.8%
1%
2% 2%

Jordan 4.3%
3%
4%
KSA 4.2%
9%
34%
UAE 4.1%

11%
Egypt 3.7%

Bahrain 3.6%
34%

Oman 3.6%

UAE Qatar Bahrain

KSA Oman Lebanon
Kuwait 3.4%
Egypt Kuwait Jordan

Lebanon 3.3%

0% 1% 2% 3% 4% 5% 6% 7% 8%
GDP Annual %

2013 2014-19 Forecast Annual Average

Source: IMF, National Statistics

24

02

ARTICLES

1. Theme Parks
Success factors and
challenges
Introduction
Theme parks are back on the agenda in
the Middle East. Investors and operators
are seeking to benefit from renewed
market confidence and strong tourism
forecasts by adding to established retail
and hospitality components. The trend is
most visible in Dubai where a number of
projects that were previously planned are
now underway or in planning.
For example, Dubailand is seeing a
revival of some theme park projects
that were shelved during the downturn,
while IMG is in progress to deliver its
multi-theme facilities that will feature
Marvel superheroes and Cartoon Network
favorites. Dubais Legoland theme park
What is the Theme Park industry?
The Theme Park industry, as a clearly
defined segment, is relatively new. Many
theme parks historically were family
owned and single units that serviced
a particular residential population.
Today, group operators are emerging
and the operation and design of theme
parks is becoming increasingly more
sophisticated.
A theme park can be defined as a gated,
entertainment attraction with a range of
rides and shows that is based around a
theme or number of themes. Within this
group, we categorize parks on the basis of
their size and speak of:
25
is on track to be completed by 2016.
In addition, Six Flags Entertainment
Corporation announced in spring 2014
that it signed a deal with Meraas Leisure
and Entertainment to bring a Six Flags
theme park to Dubai, giving late 2017 as
the opening date. Six Flags Dubai would
be part of a Meraas-backed multi-park
development in Jebel Ali.
This article explores the theme park
industry, looking at what makes them
successful and the possible reasons
for failure. Given the current pipeline
of projects focusing on a successful
business model is all the more important.
a local park with annual attendance
under two million (for example Ferrari
World in Abu Dhabi),
a regional park with annual
attendance between two million and
five million (for example De Efteling
in The Netherlands),
and, a destination park with annual
attendance of more than five
million (such as Disneyland Park at
Disneyland Paris, France).
26

FIGURE 16: THE TOP 25 THEME / AMUSEMENT PARKS WORLDWIDE BY VISITORS

PARK AND LOCATION CHANGE 2013 2012

1 MAGIC KINGDOM at Walt Disney World, Lake Buena Vista, FL 6.0% 18,588,000 17,536,000

2 TOKYO DISNEYLAND, Tokyo, Japan 15.9% 17,214,000 14,847,000

3 DISNEYLAND, Anaheim, CA 1.5% 16,202,000 15,963,000

4 TOKYO DISNEY SEA, Tokyo, Japan 11.3% 14,084,000 12,656,000

5 EPCOT at Walt Disney World, Lake Buena Vista, FL 1.5% 11,229,000 11,063,000

6 DISNEYLAND PARK AT DISNEYLAND PARIS, Marne-La-Vallee, France -6.9% 10,430,000 11,200,000

7 DISNEYS ANIMAL KINGDOM at Walt Disney World, Lake Buena Vista, FL 2.0% 10,198,000 9,998,000

8 DISNEYS HOLLYWOOD STUDIOS at Walt Disney World, Lake Buena Vista, FL 2.0% 10,110,000 9,912,000

9 UNIVERSAL STUDIOS JAPAN, Osaka, Japan 4.1% 10,100,000 9,700,000

10 DISNEYS CALIFORNIA ADVENTURE, Anaheim, CA 9.5% 8,514,000 7,775,000

11 ISLANDS OF ADVENTURE at Universal Orlando, FL 2.0% 8,141,000 7,981,000

12 OCEAN PARK, Hong Kong SAR 0.5% 7,475,000 7,436,000

13 HONG KONG DISNEYLAND, Hong Kong SAR 10.4% 7,400,000 6,700,000

14 LOTTE WORLD, Seoul, South Korea 15.9% 7,400,000 6,383,000

15 EVERLAND, Gyeonggi-Do, South Korea 6.6% 7,303,000 6,853,000

16 UNIVERSAL STUDIOS at Universal Orlando, FL 14.0% 7,062,000 6,195,000

17 UNIVERSAL STUDIOS HOLLYWOOD, Universal City, CA 4.0% 6,148,000 5,912,000

18 NAGAShIMA SPA LAND, Kuwana, Japan -0.2% 5,840,000 5,850,000

19 SEAWORLD, Orlando, FL -5.0% 5,090,000 5,358,000

20 EuROPA PARK, Rust, Germany 6.5% 4,900,000 4,600,000

21 WALT DISNEY STUDIOS PARK AT DISNEYLAND PARIS, Marne- La-Vallee, France -6.9% 4,470,000 4,800,000

22 SEAWORLD, San Diego, CA -3.0% 4,311,000 4,444,000

23 TIVOLI GARDENS, Copenhagen, Denmark 4.1% 4,200,000 4,033,000

24 DE EFTELING, Kaatsheuvel, Netherlands -1.2% 4,150,000 4,200,000

25 YOKOHAMA HAKKEIJIMA SEA PARADISE, Yokohama, Japan 2.4% 4,149,000 4,050,000

TOTAL 4.3% 214,708,299 205,906,000


How did it all start and where are we now?
Generally, the birth of theme parks is
attributed to Santa Claus Land in Santa
Claus, Indiana USA, which opened post
World War II in 1946. This was the first
park to be designed with the intention of
promoting a specific theme. Disneyland
Park (California), originally Disneyland,
opened on July 17 1955 and is widely
regarded as the park that made theme
parks popular. Buzz Price, the founder
of ERA which is now a part of AECOM,
was commissioned to undertake the
first feasibility study for Disneyland and
estimated visitor numbers to reach 2.5
million visitors in the first year. In reality,
Disneyland achieved 5 million guests
that year. The park started with a pay-as-
you-go scheme but changed this to a day
admission scheme in the 1980s.
The 1960s saw the emergence of Universal
Studios, Six Flags and SeaWorld, all in
the USA. The 1970s were characterized
by globalization of the concept with the
emergence of Sentosa Island (Singapore),
Tokyo Disneyland and a number of German
parks (amongst which Europa Park).
In the 1980s theme parks were firmly
entrenching into the European market with
the opening of Alton Towers and Thorpe
Park in the UK amongst various others.
The 1990s saw a bit of a dip in European
27
development as Disneyland Paris and
Portaventura struggled. The 2000s have
been dubbed the false dawn of China, as
a number of openings were on the books
but took a very long time to realize. Now,
in the 2010s we see strong Asian growth
including in China, while in the Middle
East there a number of theme parks in the
pipeline.
In Europe, the Middle East and Africa
(EMEA), AECOM tracks the performance
of just under 100 theme parks, most of
which are located in Europe (only one in
the Middle East). We estimate that there
are around 120 parks spread throughout
Northern America, and Asia seems to top
the bill at over 140 parks.
Three of the five largest parks are located
in Florida, two are in Japan and only one
park in the top 10 is based Europe.
In collaboration with the Themed
Entertainment Association, AECOM
compiles the Theme Index on an annual
basis, a document that tracks attendance
at theme parks, water parks and
museums worldwide. The following tables
outline the largest theme parks in the
main geographic areas as published in the
2013 Theme Index.
28

FIGURE 17: TOP 20 THEME/AMUSEMENT PARKS NORTH AMERICA

Where are the top 20 theme/amusement

parks in North America?

VISITORS (MILLIONS)

Up to 5 m 1
PARK

5 m10 m
CANADA
2 PARKS
14 NORTH EAST U.S.A.
10 m15 m
6 PARKS 2 PARKS 15
16
17 19

1
2 6 20
CALIFORNIA, U.S.A. OHIO, U.S.A.
18 11 9 PARK
13
15 m+ 10 12 VIRGINIA, U.S.A.
8

Figure 5A
7 1
3 8 PARKS
8 PARKS
5 4 FLORIDA, U.S.A.
FLORIDA, U.S.A.
2.7 % 135.1m 131.5m
201312 top 20 theme/ 2013 top 20 theme/ 2012 top 20 theme/
amusement parks North amusement parks North amusement parks North
America amusement growth America attendance America attendance

PARK AND LOCATION CHANGE 2013 2012

1 MAGIC KINGDOM at Walt Disney World, Lake Buena Vista, FL 6.0% 18,588,000 17,536,000
2 DISNEYLAND, Anaheim, CA 1.5% 16,202,000 15,963,000
3 EPCOT at Walt Disney World, Lake Buena Vista, FL 1.5% 11,229,000 11,063,000
4 DISNEYS ANIMAL KINGDOM at Walt Disney World, Lake Buena Vista, FL 2.0% 10,198,000 9,998,000
5 DISNEYS HOLLYWOOD STUDIOS at Walt Disney World, Lake Buena Vista, FL 2.0% 10,110,000 9,912,000
6 DISNEYS California ADVENTURE, Anaheim, CA 9.5% 8,514,000 7,775,000
7 ISLANDS OF ADVENTURE at Universal Orlando, FL 2.0% 8,141,000 7,981,000
8 UNIVERSAL STUDIOS at Universal Orlando, FL 14.0% 7,062,000 6,195,000
9 UNIVERSAL STUDIOS HOLLYWOOD, Universal City, CA 4.0% 6,148,000 5,912,000
10 SEAWORLD FL, Orlando, FL -5.0% 5,090,000 5,358,000
11 SEAWORLD CA, San Diego, CA -3.0% 4,311,000 4,444,000
12 BUSCH GARDENS TAMPA BAY, Tampa, FL -6.0% 4,087,000 4,348,000
13 KNOTTS BERRY FARM, Buena Park, CA 5.0% 3,683,000 3,508,000
14 CANADAS WONDERLAND, Maple, Ontario -2.0% 3,582,000 3,655,000
15 CEDAR POINT, Sandusky, OH 5.0% 3,382,000 3,221,000
16 KINGS ISLAND, Kings Island, OH 0.0% 3,206,000 3,206,000
17 HERSHEYPARK, Hershey, PA 1.3% 3,180,000 3,140,000
18 SIX FLAGS MAGIC MOUNTAIN, Valencia, CA 3.5% 2,906,000 2,808,000
19 SIX FLAGS GREAT ADVENTURE, Jackson, NJ 5.7% 2,800,000 2,650,000
20 BUSCH GARDENS WILLIAMSBURG Williamsburg, VA -4.5% 2,726,000 2,854,000
TOTAL 2.7% 135,145,000 131,555,000
Where are the top 10 theme/amusement
parks in Latin America?
29

FIGURE 18: TOP 10 THEME/AMUSEMENT PARKS LATIN AMERICA

Where are the top 10 theme/amusement

parks in Latin America? VISITORS (MILLIONS)

5 Up to 5 m

5 m10 m
3 PARKS
1 3

8
MEXICO 10 m15 m
1 PARK
GUATEMALAA
6 9 2 PARKS 15 m+

COLOMBIA

3.8%
201312 top 10 theme/
amusement parks Latin
America attendance growth

13.7m
2013 top 10 theme/ 2
amusement parks Latin

2 PARKS
America attendance
4
BRAZIL
13.2m 1 PARK 7
2012 top 10 theme/ CHILE 10
amusement parks Latin
America attendance 1 PARK
ARGENTINA

PARK AND LOCATION CHANGE 2013 2012

1 SIX FLAGS MEXICO, Mexico City, Mexico 1.5% 2,345,000 2,310,000
2 HOPI HARI, So Paulo, Brazil 3.5% 1,685,000 1,628,000
3 LA FERIA DE CHAPULTEPEC, Mexico City, Mexico 0.0% 1,537,000 1,537,000
4 BETO CARRERO WORLD, Santa Catarina, Brazil 2.0% 1,530,000 1,500,000
5 PLAZA DE SESAMO, Monterrey, Mexico 1.0% 1,209,000 1,197,000
6 PARQU E MUNDO AVENTURA, Bogota, Colombia 8.2% 1,152,000 1,065,000
7 FANTASIALANDIA, Santiago, Chile 1.5% 1,086,000 1,070,000
8 MUNDO PETAPA, Guatemala City, Guatemala -15.7% 1,056,000 1,253,000
9 EL SALITRE MAGICO, Bogota, Colombia 10.0% 1,054,000 958,000
10 PARQU E DE LA COSTA, Tigre, Argentina -3.8% 1,050,000 1,091,000
TOTAL 3.8% 13,704,000 13,199,000
30

FIGURE 19: TOP 20 THEME/AMUSEMENT PARKS EUROPE

Where are the top 20 theme/

amusement parks in Europe?
VISITORS (MILLIONS)

Up to 5 m
16
2 PARKS
SWEDEN 5 m10 m

2
7
PARKS 10 m15 m
THE NETHERLANDS
12 4
2 PARKS
19 DENMARK
15 m+
4 PARKS
9 20

3 PARKS
10
11 17 5
U.K. 13
15 GERMANY
1 2

5 PARKS 14
18
3

8
FRANCE
1 PARK
6 ITALY

1 PARK
SPAIN

-0.1% 57.8m 57.9m

201312 top 20 theme/ 2013 top 10 theme/ 2012 top 20 theme/
amusement parks Europe amusement parks Latin amusement parks Europe
attendance growth America attendance attendance

PARK AND LOCATION CHANGE 2013 2012

1 DISNEYLAND PARK AT DISNEYLAND PARIS, Marne-La-Vallee, France -6.9% 10,430,000 11,200,000
2 EUROPA PARK, Rust, Germany 6.5% 4,900,000 4,600,000
3 WALT DISNEY STUDIOS PARK AT DISNEYLAND PARIS, Marne-La-Vallee, France -6.9% 4,470,000 4,800,000
4 TIVOLI GARDENS, Copenhagen, Denmark 4.1% 4,200,000 4,033,000
5 DE EFTELING, Kaatsheuvel, Netherlands -1.2% 4,150,000 4,200,000
6 PORTAVENTURA, Salou, Spain -4.0% 3,400,000 3,540,000
7 LISEBERG, Gothenburg, Sweden 2.1% 2,860,000 2,800,000
8 GARDALAND, Castelnuovo del Garda, Italy 0.0% 2,700,000 2,700,000
9 ALTON TOWERS, Staffordshire, England 4.2% 2,500,000 2,400,000
10 LEGOLAND WINDSOR, Windsor, England 2.5% 2,050,000 2,000,000
11 THORPE PARK, Chertsey, England 11.1% 2,000,000 1,800,000
12 LEGOLAND BILLUND, Billund, Denmark 9.1% 1,800,000 1,650,000
13 PHANTASIALAND, Bruhl, Germany 0.0% 1,750,000 1,750,000
14 PUY DU FOU, Les Epesses, France 8.8% 1,740,000 1,600,000
15 PARC ASTERIX, Plailly, France -6.0% 1,620,000 1,723,000
16 GRONALUND, Stockholm, Sweden 6.6% 1,500,000 1,408,000
17 CHESSINGTON WORLD OF ADVENTURES, Chessington, U.K. 15.4% 1,500,000 1,300,000
18 FUTUROSCOPE, Jaunay-Clan, France -15.4% 1,464,000 1,730,000
19 HEIDE PARK, Soltau, Germany 7.7% 1,400,000 1,300,000
20 DUINRELL/ATTRAKTIEPARK, Netherlands 1.1% 1,375,000 1,360,000
TOTAL -0.1% 57,809,000 57,894,000

What makes a theme park successful?
There are a number of factors that are
crucial to a theme parks success.
1. Research: Upfront research provides
clear indications as to the relevant
concept and the demand within
the marketplace. Ongoing research
points out ways of improving the
park, expanding the park and
increasing its market appeal.
Research will provide the basis for
developing the right sized park for
the right sized market at the right
sized budget.
2. Site: For the development of a theme
park a flat site is preferable. The
capital costs of groundworks on a
sloping site or undulating site quickly
become prohibitive and a flat site
allows for densely populating it with
attractions without losing too much
of the site in unbuildable areas.
FIGURE 20: THEME PARK SUCCESS FACTORS
Research
Reinvestment Site
Success
Marketing Markets
Factors
Management
Product +
Vision
Price
31
3. Markets: The market for the park has
to be clearly defined and there has
to be plenty of it. Successful parks
generally attract the majority of
their visitors from within a two-hour
drive time. Therefore, parks rely on
proximity to (and access into) these
markets.
4. Products + Vision: Intellectual
Property (IP) providers are
increasingly important to the
success of a theme park. A well
known brand will add to the
immediate appeal of the park and
its target markets. Furthermore,
the mix of the attractions within
the theme park also have to be well
balanced in terms of the market, the
sub segments within that (such as
different age groups), and also with
a view to managing queuing times at
the individual components.
5. Price: Successful pricing is based
on both local and international
comparables. Local pricing for
entertainment will provide a view
to how much the market is used to
paying for an entertainment hour,
international pricing provides an
insight into the difference charged by
various brands and destinations and
what premiums might be relevant.
Pricing is furthermore of ongoing
importance as it is one of the most
important tools used in managing
peak times and seasonality.
6. Management: Experienced
management is the engine of the
theme park industry, particular
where mature and competitive
markets are squeezing profit
margins, strong management is
essential.
32

FIGURE 21: TICKET PRICING IN ASIAN PARKS

Spot versus Real (PPP) Ticket Prices, Asian Parks

Ticket prices Ticket prices

translated at spot translated at PPP
Disneys Magic Kingdom
exchange rates 95 95 exchange rates
92 Disneyland 92

Busch Gardens Tampa

85 85
84 84
Universal Studios Hollywood
81 Hong Kong Disneyland
(450 HKD @ 5.53 HKD/USD)
79 79
Sea World San Diego

Universal Studios Japan 69 Universal Studios Singapore

Six Flags Magic Mountain (74.9 SGD @ 1.07 SGD/USD)
(6000 JPY @ 97.4 JPY/USD) 68 68
Tokyo Disney Resort Universal Studios Japan
64
(6200 JPY @ 97.4 JPY/USD) (6600 JPY @ 105.9 JPY/USD)
Knotts Berry Farm
62 62 Tokyo Disney Resort
Universal Studios Singapore
(6200 JPY @ 105.9 JPY/USD)
(74 SGD @ 1.25 SGD/USD) 59 59
58 58 Ocean Park (Hong Kong)
Hong Kong Disneyland
(320 HKD @ 5.53 HKD/USD)
(450 HKD @ 7.76 HKD/USD) Cedar Point
55 55
Major Korean Theme Parks
(44000 KRW @ 801 KRW/USD)

48 Major Chinese Theme Parks

Ocean Park (Hong Kong) (200 RMB @ 4.18 RMB/USD)
(320 HKD @ 5.53 HKD/USD)
41
Major Korean Theme Parks 40
(44000 KRW @ 801 KRW/USD)

Major Chinese Theme Parks Hersheypark

33 33
(200 RMB @ 6.15 RMB/USD)

23 Siam Park City

(400 THB @ 17.51 THB/USD)
Siam Park City
(400 THB @ 30.65 THB/USD) 13

Source: Individual parks, IMF, Federal Reserve, Created by Pro

Forma Advisors

7. Marketing: The theme park business
is extremely marketing sensitive,
as the product competes with
many other forms of leisure and
entertainment. In new markets, heavy
marketing is required to establish
identity and to build awareness of
the product, while in mature markets
there is a strong need to constantly
induce repeat visitation.
What makes a theme park fail?
Location, location, location: As with other
hospitality and leisure markets, location is
paramount for a successful park. Building
a great park in the wrong location (too far
from the market) is a sure way to getting
lower attendance than needed.
Overbuilding: One of the clear routes to
failure is overbuilding. There are a number
of examples, amongst which Terra Mitica
in Spain, where the ambitions of the
park when conceived were larger than
the size of the market present. In those
cases, the park built was simply too big.
Terra Mitica opened in 2000 and filed for
bankruptcy repeatedly until it finally made
an operational surplus in 2006. By this
But theme parks attract tourists dont they?
Well, yes and no. When analyzing theme
park visitation, the industry generally
distinguishes between resident visitors
and tourist visitors. Resident visitors
are divided into those residing within
a 0 60 minutes drive time and within
a 60 120 minutes drive time. Tourist
visitors are divided between domestic
tourists and international tourists
and generally stay within a one hour
drive time. Large destination resorts
33
8. Reinvestment: Reinvestment is
crucial to theme parks. With the
majority of visitors coming from
within a two hour drive time, theme
parks need to offer something new
regularly to ensure repeat visits
from the resident market. To do so,
reinvestment in new rides and shows
is key. From our research we know
that investment in a new attraction
(if well targeted) pays off directly in
higher attendance numbers.
point in time the size of the park had been
reduced, the value of the land effectively
written off and the market size had grown,
catching up with the attractions offered.
Unclear branding: Another route to
failure is the lack of a clear message to
convey. There are a number of smaller
parks that have failed over time due to
a lack of a clear message to convey to
the market, a clear branding or image
that is communicated. Todays trend of
increasingly important IP providers is
one way of circumventing this danger as
a well-known IP provider obviously has
a strong track record of providing a clear
and concise message to the market.
inclusive of a theme park component
tend to attract a larger proportion of
tourist visitors and understandably so.
These parks have a combined offer of
leisure and entertainment that extends
visitors stay beyond a one day visit and
that largely drives their tourism visitor
numbers. Smaller parks, without a large
enough entertainment offer and without
accommodation offer, logically have a
smaller proportion.
34

The below table outlines the percentage
distribution of attendance amongst
various market segments at a select
number of theme parks. Critically, it is only
the large destination parks that achieve
a greater proportion of tourists than
residents. For the vast majority of theme
parks, visitors are generally residents
rather than tourists.

FIGURE 22: VISITOR MIX

Resident Visitors Tourist Visitors

Park Attendance 2013 1-hr 2-hr Domestic International
Tourists Tourists
Magic Kingdom 18,588,000 5% 75% 20%
Tokyo Disneyland 17,213,900 50% 25% 21% 4%
Disneyland Paris 10,430,000 15% 10% 18% 57%
Universal Studios Florida 7,062,000 5% 64% 31%
Europa Park 4,900,000 26% 46% 15% 13%
Port Aventura 3,400,000 18% 23% 25% 34%
Gardaland 2,700,000 20% 38% 29% 13%
Legoland Billund 1,800,000 20% 43% 0% 37%
Alton Towers 2,500,000 6% 37% 56% 1%

Source: AECOM

Theme park maths Revenue and Cost drivers

Revenue drivers Theme park admission prices are influenced
Theme parks usually have both the mainly by attendance rates, which vary
direct revenue generating methods (i.e. among other factors according to the
admission) and the indirect revenue quality of the park, economic conditions,
generating methods (i.e. F&B, retail stores, seasonality, marketing, competition or
convention centers, etc). Theme park regulations. Theme park admission fees
revenues tend to split and be analyzed in typically cover all the attractions in a park
four broad categories as shown below. and pricing is typically different based on
the duration of stay. The size and theme of
FIGURE 23: REVENUE MIX a park, the target segment and the number
of rides are potential reasons for different
Revenue Mix (as a % of total revenue)
prices. Customers pay extra for services
Admissions 48 - 60% such as F&B, merchandise or specialty
F&B 18 24% rides/attractions.
Retail 12 - 24%
Other 48%
Capital costs
Developing a theme park is a complex
Source: AECOM business, especially as each project wants
to stand out as unique and exclusive.
The industry rule of thumb states that
developers should expect to invest US$
 35

100 - US$ 200 per expected first-year
guest to develop a theme park. Thus, if the
goal is to attract one million guests per
year, the total investment would need to
equal US$ 100 to US$ 200 million.
Theme Park capital and operating costs
depend on the theme adopted for the
park and the kind of market it targets.
Developing a globally-branded theme
park, such as Universal or Disneyland,
means that similar designs are applied
on all projects with the same brand,
effectively cutting down the cost of
developing each theme park design
from scratch. This allows developers to
concentrate on adjusting the base design
to local market specifics and the target
visitors expectations.
FIGURE 24: AVERAGE INVESTMENT PER FIRST-YEAR
GUEST BY DECADE (US$)
Average investment US$ per actual guest
The capital costs of developing a theme
park can be divided into four components:
1. Land and infrastructure
2. Structures
3. Rides and shows (components with
highest visitor impact)
4. Theming (such as land- and
streetscaping, facades, FF&E)
How theme parks utilize available space
optimally to ensure visitors positive
experience is a key factor to long-term
success in continually attracting high
numbers of visitors. This includes
distribution of thematic attractions,
efficient provision of services (i.e. F&B),
and managing traffic and directional flow
of visitors to avoid overcrowding. Global
brands have the advantage of experience
in knowing what design draws in visitors
and the target audience will basically
know what to expect.

1950s $36.3
Infrastructure, utilities provision and
operational support facilities are the
base construction in the development
1960s $57.5 of a theme park. This also includes
superstructures/foundations for the
1970s $100.8
attractions from which themed buildings
will be erected. Everything else relating
to thematic attractions and branding are
Average $109.6 typically specialist items, including rides,
land and streetscaping, or facades. The
1980s $139.3
costs for the thematic attractions will
vary depending on their complexity. For
branded theme parks, the theme and
1990s $121.0 ride systems, which are often one of the
largest sub-component costs, are usually
2000s $212.4 replicated on different developments.
Consequently, this portion of capital cost
$0 $50 $100 $150 $200 $250 is largely a predetermined figure.
Source: Kelly T. Kaak Theme Park Development Costs:
Initial Investment Cost Per First Year Attendee A Historic
Benchmarking Study
36

Operational costs For a local authority theme parks are

Experience tells us that the largest
operating cost for a theme park tends
to be labor (anywhere between 35 and
55 percent of total revenue), and profit
margins usually lie somewhere between
20 and 40 percent.
Assuming a hypothetical theme park
indeed operates on that basis and has a
full adult admission price of around US$
30, it becomes clear that it is pretty hard
to make a theme park pay back its original
capital expenditure over the short term.
For a developer theme parks may be
interesting from the perspective of adding
to a wider resort destination, increasing
the occupancy and spend on site at the
accommodation product or at the retail
components that may form part of the
wider development.
FIGURE 25: HYPOTHETICAL BUSINESS MODEL
Full adult admission price $30.00
Admission yield of 65% $19.50 per capita
admission
one way in which they can actively
help broaden the tourist base for their
destination, and we see occasions
whereby the local authority may
donate the land or even take a capital
participation in the development of the
park. It isnt until a much later stage in
the development of a theme park, usually
when it has been sold a few times and
when the destination as a whole has
grown, that it becomes an interesting
financial proposition for an investor.
As a theme park is an operating business,
they are generally evaluated as a multiple
of its earnings. The below table outlines
some of the values achieved and multiples
involved in the attraction industry.
As shown, apart from some good years at
the height of the economic cycle over the
past 10 years or so, earnings multiples
are not great, reflecting the low cash-flow
compared to outlay of capital cost.
FIGURE 26: THEME PARK PROFITABILITY
Business

Multiple
(million)

(million)
Gate = 60% of income $32.50 per capita EBITDA
Value
Park/

Year

total revenue
Profit Margin of 30% $9.75 per capita
profit
Six Flags 2004 155.0 25.4 6.1 x
Reinvestment at 10% of $3.25 per capita Europe
revenue cost
Merlin 2005 102.5 10.6 9.7 x
Profit to fund development $6.50 per capita Entertainments
cost
Tussauds Group 2005 800.0 70.2 11.4 x
Investment cost $100-200 per capita
Star Parks 2006 240.0 22.9 10.5 x
Source: AECOM Sydney 2010 A$115.0 A$19.8 5.8x
Attractions Gp
Movie Park 2010 50.0 7.3 6.8x
Germany
7 CdA sites 2011 29.0 4.9 5.9x
PortAventura 2012 439 59 7.4 x
(50% stake)
PortAventura 2013 439 68.8 6.4 x
(50% stake)

Source: AECOM

So what about the Middle East?
How these numbers will stack up in the
Middle East remains to be seen as the
region kicks the development of theme
parks up a gear.
The UAEs theme park sector is certainly
getting both government and private
sector support. A number of factors
remain to be seen that will determine
the eventual success and sustainability
of this industry. Can a number of theme
parks all survive in the same country?
What is driving the demand? Compared
with other markets, the local population
size is limited, but on the upside the local
population is young and growing and many
residents have a much larger disposable
income than in other regions. Foreign
tourists are likely the bigger potential
client base and Dubai alone is targeting
annual visitors of 20 million by 2020.
37
AECOMs theme park experts suggest
that the future is in integrated projects,
combining theme parks with on-site
hotels, conference facilities and corporate
business. Development also has to take
into account consumer preferences
and innovate on traditional theme park
concepts with an eye toward the local
market and culture.
There are numerous theme park
projects in the pipeline, with some
great IP providers, so it will not be long
before AECOM will be able to produce a
separate set of results for Theme Parks
in the Middle East. Until then we are
eagerly monitoring the development of
water parks in the region and of Family
Entertainment Centers, both great
indicators and complimentary to theme
park development. Watch this space!
38

2. Hotel Refurbishment
Optimizing the value of hotels
The case for refurbishment
Despite geopolitical instability in Dubai, probably the most mature
the region over the past few years, hospitality market in the region, has a
confidence in pockets of the MENA substantial supply pipeline. On the back
hospitality industry is strong and majorof the governments tourism growth
operators are expanding their portfoliosstrategy and visitors expected for the
significantly to take advantage of firm Expo 2020, hotel developers have been
market dynamics. confident in announcing additional
hotel offerings. According to the Dubai
According to the STR, the Middle East/ Department for Tourism & Commerce
Africa hotel development pipeline Marketing and industry sources (such
comprised 581 hotels totaling 137,800 as Jones Lang LaSalle and PKF), there
rooms in April 2014, of which 16,762 are currently 99 hotels and 48 hotel
rooms are being delivered in the UAE. apartments in the 2014-16 development
MEED estimates that there are currently pipeline, which would bring the total by
325 hospitality projects in the GCC due 2016 to 752 hotels and increase the total
to be completed between 2014 and 2018, number of rooms by over a third (FIGURE
adding significant supply to the market 28).
MIDDLE
(FIGUREEAST
27). HOSPITALITY PROJECT COMPLETIONS SINCE 2005

FIGURE 27: MIDDLE EAST HOSPITALITY PROJECT COMPLETIONS SINCE 2005

90

80

70

60

50
Number

40

30

20

10

0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f 2016f 2017f 2018f

UAE Saudi Arabia Qatar Oman Kuwait Bahrain

Source: MEED Projects as of August 2014

DUBAI HOSPITALITY PROJECT STARTS COMPLETIONS SINCE 2005
FIGURE 28: DUBAI HOSPITALITY PROJECT STARTS AND COMPLETIONS SINCE 2005
40
35
30
25
Number
20
15
10
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014f 2015f 2016f 2017f
Completions Starts
Source: MEED Projects as of August 2014, DTCM
With so many new hotels being delivered
to the market, existing properties
are under pressure to maintain their
position. This often means that they have
to refurbish, modernize or reflect on
branding. Keeping up with competition
with newly-opened and planned
developments in the run up to 2020 could
be a major challenge facing established
hotels in Dubai.
Why refurbish?
There are numerous business
justifications for hotel refurbishments,
mostly centered on strategic, operational,
functional and legislative demands
(FIGURE 29). Ultimately, the investments
have the common objectives of
maintaining market position, improving
operational efficiency for operators and
securing the owners return by increasing
the capital value of the property.
39
2013
No. of Properties 611
No of Rooms 84,534
2016 Forecast based on
current pipeline
No. of Properties 752
No of Rooms 114,000
currrent pipeline
Consequently, Dubai has seen a number
of the leading hotels undergoing
refurbishment, while others are likely to
accelerate refurbishment programs and
embark on major renovations in the run
up to Expo 2020.
This article examines the business
drivers for hotel refurbishments,
including key cost drivers, challenges and
measuring success.
Competitive pressures and the need to
continuously meet customer expectations
create perhaps the biggest need for hotels
capital expenditure. New standards,
with regards to both design and service-
levels are constantly being set aimed at
keeping ahead of the competition. Design
in particular is a key differentiator, and
extremely high-quality bathrooms, high-
performance air-conditioning, extensive
in-room entertainment, IT facilities and
enhanced safety in line with international
standards are all important for hotels to
remain competitive.
 40

DRIVERS FOR
FIGURE 29: HOTEL
DRIVERSREFURBISHMENTS
FOR HOTEL REFURBISHMENTS How often hotel refurbishments should
occur depends largely on the age of the
property, standard of construction, the
Improve current current fit-out, level of maintenance
image and the competitive environment the
Compliance with Meet customer hotel operates in. Typically hotels work
expectations
legislation on seven-year refurbishment cycles,
assets that have well-designed, high qual-
ity fit-out and rolling maintenance pro-
Maintain brand Maintain / increase
Commercial grams may have longer cycles. However,
business
compliance competitiveness competition, client demand and techno-
opportunity
logical advances mean that the time be-
tween major refurbishment cycles ap-
Maintain / improve Maintain / improve pears to be shortening.
KPIs (RevPAR, operational
occupancy) efficiency Hotels are unique in that they are real
Extend useful life
of hotel estate assets for owners and operating
businesses for operators. Investment
objectives can vary between owners and
operators. Capital expenditure from an
Source: AECOM, HVS, JLL
operators perspective may be aimed
How often to refurbish? at achieving immediate commercial
targets that may not always be aligned
The hotel refurbishment cycle needs to be with the long-term strategic interest of
considered within the context of the wider asset owners. Aligning the objectives of
hotel asset management cycle, which short-term operational business needs
involves the process from acquisition to long-term goals is increasingly dealt
to ownership and finally to disposal. with by asset managers whose mandate
In the best scenario, hotels should it is to assist with the management of a
undertake long-term strategic planning of hotel over its life-cycle and to maximize its
refurbishment cycles as part of the hotels value. This includes operational oversight,
Property Planning & Development and managing capital expenditure budgets
Hotel Improvement Planning (HIP). and refurbishment cycles. (FIGURE 30)

Key components and cost drivers

Hotel refurbishment projects are typically
budget driven and achieving the right
balance between the clients vision,
budget and time constraints is the main
task of the project team. The timing of
capital works is vital given that many
hotels continue trading while being
refurbished/renovated.
Typically, hotel refurbishment can
be divided into two broad categories
depending on the extent of the work -
renovation (soft/full) and remodeling/
rebranding.
Renovation: Renovation is commonly
required every five to seven years
and involves adding new elements
to the rooms to ensure that the hotel
remains competitive in its target
market. Renovation can involve soft
renovations and full renovations.
 41

FIGURE 30: HOTEL ASSET MANAGEMENT CYCLE + HOTEL LIFE-CYCLE

HOTEL ASSET MANAGEMENT CYCLE
Asset Mangement Cycle

Development and Acquisition Operational Phase Disposal

Opportunity identification
Business plan Hotel Investment lifecycle
Site selection management
Valuation
Due diligence Operational monitoring and
Asset Disposal Plan
benchmarking
Market & Feasibility assessment Transaction execution
Capex planning
Transaction or development
Repositioning analysis
Management contract
negotiation

Hotel Life-cycle

Phase 1 Phase 2 Phase 3 Phase 4

Introduction to Growth / Prime Peak / Deteriorating Performance due to

market of asset / Performance Stabilized asset depletion / obsolenscence
new brand / Performance
new format

Years 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Phase Phase 1 Phase 2 Phase 3 Phase 4

Ramp up Rapid growth Stabilized

growth of KPIs KPIs and
Operational Strong asset
and occupancy, occupancy
Asset and profit utilization
drive for declining, Loss
Performance trends yet to be Growth in
operational of market share
established Financial KPIs
and Occupancy efficiency

Operational Refurbishment
Asset and Refurbishment Refurbishment Completion +
Strategy Performance Planning Execution Impact
Review assessment

Source: HVS, JLL, Colliers International, AECOM

42

Remodeling or Rebranding: On top of the cost items shown, project

Rebranding or remodeling aims to
move the hotel into a different sector
and increase room rates. This can
involve creating new guest rooms
using redundant space, replacing
services and bathrooms, changing
room and area layouts or introducing
new guest facilities, such as IT and
in-room entertainment, and complete
replacement of finishes, furniture,
fittings and equipment.
(FIGURE 31) and 32 illustrate typical cost
breakdowns for hotel refurbishment
projects. This breakdown identifies broad
areas of costs that apply to most hotel
refurbishment projects. However, the costs
shown are indicative only and project-
specific conditions, including location will working conditions.
HOTELthe
affect REFURBISHMENT CAPEX
final cost and cost BREAKDOWN LUXURY HOTEL
breakdown.
expenditure will include Operating Supplies
and Equipment (OS&E), professional fees,
contingencies, etc.
Guest rooms the main revenue
generator are usually the main focus of
any refurbishment. Investment can focus
on the creation of new rooms or alteration
of existing rooms, improving bathrooms
to keep up with contemporary design
themes, IT and entertainment systems,
etc. Investment in other operational
areas will be prioritized according to
available budgets. Areas include front-
of-house, such as bars and restaurants,
conference facilities, back-of-house area,
or improvements to layout, circulation and
facilities to improve staff productivity and

FIGURE 31: CAPITAL COST BREAKDOWN LUXURY HOTEL

Based on luxury hotel with 200 guestrooms, 20 suites, 6 stories

Total average capex (US$) soft renovation 8.92 million, full renovation 21.29 million

100% Other Common Additives

Infrastructure
80%
Recreation Facilities
% of Total

60%
Function Spaces

40% F+B

Public Spaces
20%
Guestrooms and Bathrooms,
Guestroom Corridors
0%
Total Soft Renovation Total Full Renovation

Source: JN+A Hotel Cost Estimating Guide 2014, AECOM

Indicative only. Breakdown and costs depend on project and location
Assumptions:
Guestrooms: 220 keys
Public spaces: based on 5,920 sq ft
F+B: based on 8,600 sq ft
Function spaces: based on 10,216 sq ft
Recreation facilities: based on 13,736 sq ft
Infrastructure based on 352 parking spaces and landscaping allowance
Other common additives: includes Elevators, Electronic Signage Boards, Laundry Equipment,
Guestroom ADA Modifications
 43

HOTEL32:
FIGURE REFURBISHMENT CAPEXUPSCALE
CAPITAL COST BREAKDOWN BREAKDOWN
HOTEL UPSCALE HOTEL
Hotel refurbishment capex breakdown based on upscale hotel with 304 guestrooms, 9 stories.
Total
basedaverage capex
on upscale (US$)
hotel soft
with renovation
304 5.049million,
guestrooms, storiesfull renovation 13.25 million.
Total average capex (US$) soft renovation 5.04 million, full renovation 13.29 million
Total average capex (US$ )
100%
Other Common Additives

80% Infrastructure

Recreation Facilities
% of Total

60%
Function Spaces

40% F+B

Public Spaces
20%

Guestrooms and Bathrooms,

0% Guestroom Corridors
Total Soft Renovation Total Full Renovation

Source: JN+A Hotel Cost Estimating Guide 2014, AECOM

Indicative only. Breakdown and costs depend on project and location
Assumptions:
Guestrooms: 304 keys
Public spaces: based on 4,940sq ft
F+B: based on 8,100 sq ft
Function spaces: based on 23,178 sq ft
Recreation facilities: based on 4,508 sq ft
Infrastructure based on parking and landscaping allowance
Other common additives: includes Elevators, Electronic Signage Boards, Laundry Equipment,
Guestroom ADA Modifications

Challenges
There are many uncertainties impacting
on major refurbishment projects. Having
a HIP can help build a long-term strategy
for the assets property development and
refurbishment cycle, which will help the
asset owner to mitigate uncertainties
over the assets life-cycle. Key risks to
refurbishment projects include the assets
building fabric condition, structure and
floor plans, or MEP provisions. Maintaining
operations during refurbishment works is
a key aspect that has to be considered on
major projects.
Building condition
The condition of a building can be one
of the major unknowns associated with
hotel refurbishment projects. The age
of an asset and whether it has been
expanded or converted from other uses,
will play a major factor. Carrying out
condition surveys and measured surveys
of the building fabric can assist in the
early allocation of budgets for repair and
alteration works and will reduce the risk of
uncovering unexpected difficulties during
construction.
Structure and floor plans
The influence of existing structures
on new room layouts and services
distribution routes is another area of
potential risk. For example, restrictions on
floor loadings, floor-to-ceiling heights, the
construction of openings or arrangement
of windows can limit the envisaged design
of rooms and function spaces.
44
Plant rooms and services distribution
Refurbishment schemes often involve
alteration of services. The size and
location of existing plant rooms, together
with the limited availability of extra space
to accommodate new equipment, can be a
constraint on the options available to the
client. In addition, the size and location of
existing risers and horizontal distribution
routes can be a source of particular
difficulty as new services are planned.
Installation costs increase and schedules
are extended when services need to be
threaded through the structure of an
existing building.
Maintaining operations during
refurbishment works
There is a fine balancing act between
continuing to operate during
refurbishment and risks in order to
minimize loss of revenue and maintain
continuity.
Refurbishment on hotels that continue to
maintain operations during construction
What is a successful refurbishment?
A successful refurbishment means
a successful hotel, which is judged
differently by stakeholders. To guests,
a successful hotel means a positive
experience, including value for money,
convenience, style and great service. For
the hotel operator it is satisfied repeat
customers, operational excellence and
improved financial performance. For the
owners it means an asset of high value for
years to come.
The success of a refurbishment project
can be measured quantitatively, via
financial KPIs, as well as qualitatively, via
customer satisfaction.
usually take place in a small number
of discrete phases, such as with whole
floors being taken out of commission
to minimize disruption. This has to be
balanced with higher costs of associated
with working in phases, which arise from
high-quality hoardings, isolation, diversion
and resupply of building services, and
other temporary works between phases.
Consequently minimizing disruptions
has to be balanced with maintaining
continuity of the refurbishment works.
Managing disruptive activities,
coordinating service shut-downs
and providing safe access for guests,
operatives and materials are among
the many challenges associated
with maintaining operations during
construction work. Consequently,
achieving certainty of completion, zero
defects and compliance with statutory
requirements to permit immediate
occupancy of guest rooms once
construction is completed is key to
maintain operational efficiency.
FIGURE 33: HOTEL PERFORMANCE INDICATORS
Performance Area Example Indicators
Value Creation Market value of Asset
Efficiency and Occupancy
operational Cost per Occupied Room
performance Average Rate Index
Financial performance ADR, RevPAR, TrevPAR
and profitability
Market Share Market Penetration Index
Revenue Generation Index
Qualitative Measures Property Condition,
Customer Satisfaction
Some considerations for delivering
successful refurbishment projects are
planning and risk management, supply
chain management and future proofing.
 45

Critical to the success of any At the outset, aligning owner and

refurbishment, in particular those
undertaken while maintaining operations,
is ensuring robust planning in order
to minimize disruption to guests and
operations, delivering rooms as each
phase is completed to minimize loss of
revenue, and to meet the program budget
and schedule. Health and safety is a major
consideration as the interface between a
contractor and hotel guests and working
staff is close.
Hotel refurbishments usually run on tight,
short schedules, meaning that supply-
chains have to be managed carefully.
Early procurement, through either client
direct orders or early appointment of
contractors, is a common solution.
Commitment of requirements early on
is important to ensure the materials can
be sourced, as any delays will affect the
schedule. Logistics are also important in
ensuring separate access for guests and
materials.
operator objectives is key. A well planned
and executed HIP that encompasses
the elements of capital expenditure
plans over the life-cycle of a hotel can
help long-term planning in terms of
investment needs, timing, budgets
and cash flows. Consultants and
designers need to understand client
objectives and expectations to deliver
refurbishment solutions that can achieve
the requirements within a tight budget. In
turn, contractors need to understand how
hotels operate, have access to a specialist
supply chain and the ability to deliver work
on phased projects in operating buildings.

A successful hotel refurbishment project

is dependent on the right project team,
from owner and operator, consultants,
designers and contractors.
46

3. Risk Management
Decision making in an uncertain
environment
Of all the factors necessary to achieve projects, due primarily to changes in
expected growth, efficient risk project scope, delays and unrealistic
management ranks high on the agenda timeframes, and unclear project objectives
of the industry. Yet, as our 2014 industry and business case (FIGURE 34). In turn,
survey shows, the Middle East construction clients are faced with the challenge of
industry still has some way to go before it project teams not delivering projects within
can have real confidence in its ability to budgets and schedule. Quality of work
manage risk. Indeed, delivering large-scale has also been cited by clients as a major
programs on time and on budget remains a concern, which has partly been explained
major challenge. 78 percent of respondents by poor project management in some parts
to our survey report underperforming of the industry.
FIGURE 34: PROJECT PERFORMANCE
PERCENTAGE OF MIDDLE EAST PROJECTS DELIVERED ON TIME AND ON BUDGET
Respondents opinion on percentage of projects delivered on time and on budget

43% of respondents believe

Delivered to Budget
Delivered on Time
0%
only 25% of projects in the
Middle East are delivered to
budget and only 9% believe
75% of projects are delivered
on time
25% 50% 75%

CAUSES FOR UNDERPERFORMING PROJECTS IN THE MIDDLE EAST

% of Respondents

Poor choice of procurement method

Poor commercial management

78% of survey
respondents
Handover and facilities management issues currently have
under-performing
Poor management + coordination of project projects.

Poor communication + IM in project team

Lack of resources

Technical design issues

Poor consultant/ contractor performance

Poor organizational support + decision making

Poor stakeholder engagement

Unrealistic budgets/ funds

Unclear project objective + business case

Unrealistic time frames

Project scope change

0 20% 40% 60% 80%

Source: AECOM 2014 Construction Survey
 47

This finding in itself is not new. For
decades studies have demonstrated the
degree of uncertainly around time and
cost in project delivery (FIGURE 35). The
real question is why this trend continues
in our industry. The potential for such
incidents could be decreased significantly
by better risk management, and according
to the industry players the sector needs to
consider why it has not achieved the risk
mitigation levels of other industries, and
find solutions to achieve better results.
The industry player that successfully finds
the solution to this fundamental question
will have a strong competitive advantage.

FIGURE 35: RISK VERSUS PERFORMANCE

40%

30%
Frequency

20%

10%

0%
-80% -40% 0% 40% 80% 120% 160% 200% 240% 280%

Planned vs actual costs

Source: Flyvbjerg et al. 2003, How common and how large are cost overruns in transport infrastructure projects?

The 2003 paper published by Flyvberg et al. is an example of the analysis of project performance. The study analyzed circa
260 infrastructure projects in 20 countries. The diagram above from the report demonstrates the wide, positively skewed
distribution in performance

Framework for Assessing Successful Risk Management

To improve risk management on projects
and programs, we advocate the adoption
of a scorecard (maturity) framework to
understand what factors are working well
and what areas need further attention
(FIGURE 36). This involves a review and
evaluation of key performance indicators
related to successful risk management
that allows us to focus on the key
actions required to continuously improve
performance.
48
RISK MANAGEMENT IMPLEMENTATION

FIGURE 36: RISK MANAGEMENT IMPLEMENTATION FRAMEWORK

Factors Scorecard Overall Scorecard

Framework

Framework

Templates

Policy
Risk Policy
Governance Procedure
Templates

Procedures
Governance
Sponsorship
Senior
Management

Ownership
Sponsorship KPIs
20
Risk Culture Risk Ownership 14
Decision Making

Risk Culture
20
13

Program
Input
Risk KPIs
Decision Input
Risk Modelling Assessment
Effective Risk
Mitigation
Coordination

Mitigation
Realistic
Execution Execution
planning
Cross team Execution
coordination
Execution Planning
Resource Allocation
Allocation
Common Risks

Management of
Program Common Risks
Data

Improvement Integration with

planning and
strategy
Data Management
Planning & Strategy

Some of the general findings from the use An increase in performance is

of our framework are as follows: seen when risk management is
implemented as an integral part of
Most industry players in the region the planning and decision making
have a conceptual understanding process as opposed to a process that
of the risk management framework, follows after the plan is developed
process and basic tools, and and decisions are made. In the
acknowledge its importance for traditional approach targets are set,
successful delivery. Generally the plans are developed and decisions
industry is still heavily focused on the are made following which risks are
risk identification step of the process. identified to a plan that is already in
An increase in performance is seen motion. Performance improvement
when time is more appropriately is seen when risk analysis is used as
dedicated to the analysis of the a tool to help develop the plan, set
underlying cause of the risks and targets and make decisions from the
the actions, investments and start.
accountability required to mitigate
the risks.

An increase in performance is seen
when senior managers buy into and
continuously show their sponsorship
of risk management. This can be
demonstrated by communicating how
the risk analysis conducted informs
their decision making process.
This can help build a culture of risk
management that acknowledges risk
as an inherent part of projects and
the management of risk as an integral
part of the way we work as opposed
to one of compliance.
Optimism bias relating to setting
project targets, assumptions and
forecasts is a common phenomenon.
Hypothetical Hotel Development Financial Risk Modeling
A high level financial model is required to
analyze a possible a hotel development.
The development is to be a four star
hotel, of approximately 300 keys, to be
operational in approximately three to four
years.
The financial model is developed applying
a discounted cash flow approach, using
high level forecasts for income and cost
drivers.
Income for the asset owner is
modeled based on annual net
operating income (ANOI) under a
management contract.
ANOI is calculated based on total
revenue forecasts (RevPAR, F&B
etc.), total expenses (departmental
and undistributed expenses) and
management fees. All operating
expenses are assumed to be borne
by the hotel operator and as such
no provision is made for operating
expenses for the hotel owner.
49
The inherent uncertainties around
these factors can be better
understood and accepted by decision
makers, specifically at the initial
planning phase of the project via
high level risk modeling. For example,
probabilistic models and analysis
can help demonstrate the degree
of uncertainty inherent in such
assumptions and the degree of
confidence in achieving targets.
A theoretical exercise can help
demonstrate the principles of
risk modeling and its value in
demonstrating the degree of
uncertainty inherent in a project.
Capital cost is modeled based
on forecasts for average UAE
construction benchmark cost
for a four star hotel, 10 percent
professional fees and a percentage
allocation for other costs related to
the development.
The financial model using the
deterministic inputs for income and cost
provides a project Internal Rate of Return
(IRR) of 13 percent for the owner.
A potential investor requires further insight
to the risk surrounding income forecasts.
A Monte Carlo analysis is conducted by
assigning a probability profile for the
income variable under two scenarios
(FIGURE 37). In scenario one, the developer
has a relatively high degree of confidence
with regards to the income forecast and
assumptions applied. Under scenario two
the developer believes there is a greater
degree of uncertainty about the forecasts.
By running multiple simulations for both
scenarios, a probability distribution
 50

is generated to show the likelihood of risk inherent in project variables (such as

achieving a specified project return. This income) and achieving the target project
is one way to demonstrate to decision return. Furthermore, this tool can be used
makers and stakeholders the degree of to develop mitigation actions.

FIGURE 37: MONTE CARLO ANALYSIS OF INCOME AND IRR

Scenario One

Probability Distribution

100%
Probability Density and Cumulative Probability

Probability Assumed
80% of change in change in
Income (%) Income
5.0% -7.5%
60%
10.0% -5.0%
0.5 20.0% -2.5%
40%
30.0% 0.0%
20.0% 2.5%
20%
10.0% 5.0%
5.0% 7.5%
0%
0 5 10 15 20 25

Internal Rate of Return %

Source: AECOM
There is a high degree of confidence in achieving the IRR targets under scenario one with a narrow
distribution ranging from 11% to 14% IRR

Scenario Two
Probability Distribution

100% Probability Assumed

Probability Density and Cumulative Probability

of change in change in
Income(%) Income
80%
5.0% -22.5%
10.0% -15.0%
60% 20.0% -7.5%

0.5 30.0% 0.0%

40% 20.0% 7.5%
10.0% 15.0%

20% 5.0% 22.5%

0%
0 5 10 15 20 25

Internal Rate of Return %

Source: AECOM
Under scenario two the greater uncertainly is reflected in a wider distribution ranging from an IRR of
8% IRR to 18% and lower confidence in achieving the target IRR
 51

03

REFERENCE
ARTICLES
52
1. PROCUREMENT
ROUTES
All clients expect buildings to be on
time and budget with an agreed level of
quality, with the risk rightly managed by
their professional and contracting team.
However, most clients and construction
professionals can name at least one
project that was not delivered to budget,
time or the quality levels expected. This is
why the right procurement strategy, one
that balances risk and control against the
competing project objectives of cost, time
and quality, is key to a successful project
outcome.
AECOM has developed strategies for
the delivery of buildings that we know
work, successfully delivering hundreds
of projects over our long history. New
and existing developers have the
opportunity to learn from this knowledge
AECOM Project Management
AECOM offers important early advice to
help determine the right procurement
approach, adding value throughout
the building process. This considered
understanding of our clients time, cost
and quality requirements maximises
the value we can offer. Some of the
procurement strategies followed in the
industry are listed below, but the real
challenge is mixing the right approach for
an individual clients needs:
Traditional Lump Sum: The design by
the clients consultants is completed
before contractors tender for and
then carry out the construction. The
contractor commits to a lump sum
price and a completion date prior to
and maximise the value from their time,
cost and quality mix, whilst adhering to a
process that increases the likelihood of
their building being successfully procured
by their team involved.
Studies conducted with our key clients who
regularly undertake development work,
have shown that buildings can be delivered
for 12-15 per cent less cost when procured
correctly with no impact on quality or time.
Buildings are more likely to be on time and
meet clients expectations when procured
correctly. So what is the right procurement
approach for your building? Which funding
strategy, funding partner, team behaviours,
attitudes, communication channels, budget
and programme delivers the best approach
and how can we best combine these to lead
our clients to ultimate success?
appointment. The contractor assumes
responsibility for the financial and
programme risks for the carrying out
of the building works, whilst the client
takes responsibility and accepts
the risk for the quality of the design
and the design teams performance.
The clients consultant administers
the contract and advises on aspects
associated with design, progress and
stage payments which must be paid
by the client.

Accelerated Traditional: As above,
but procured in the market place
before being fully designed (normally
80-85 percent designed), leaving
more simple elements of the building
to be procured once the contractor
has been appointed. It is important
to understand the way in which
a client procures the remaining
elements of work with a contractor
under this approach and to design
out those areas that carry inherent
risk early in the process. It may also
involve the procurement of an early
works package for enabling and/or
piling works.
Two Stage: A contractor is invited
to become part of the project team
in stage 1, usually by way of a
preconstruction fee. They design and
procure the project on behalf of the
client, until such time that a second
stage lump sum offer can be agreed,
which should be before construction
begins on site. An understanding of
the original appointment and the
subsequent framework under which
the second stage is agreed, are the
important aspects of this approach,
as well as working with transparency
53
and trust preventing an early
commitment to a full scheme that a
client cannot afford.
Design and Build: Detailed
design and construction are both
undertaken by a single contractor
in return for a lump sum price.
There are variants on this option
depending on the degree to which
initial design is included in the
clients requirements. Where a
concept design is prepared by a
design team employed directly by
the client before the contractor is
appointed (as is normally the case),
the strategy is called develop and
construct. The contractor commits
to a lump sum price, for completion
of the design and the construction
and to a completion date, prior to
his appointment. The contractor can
either use the clients design team
to complete the design or use his
own team. With design and build it
is important to design out or specify
in detail those parts of the building
the client wants to see perform
a particular function or provide a
particular visual impact.
54
Management Contract: Design by
the clients consultants generally
overlaps with the construction.
A management contractor is
appointed early to tender and let
elements of work progressively to
subcontractors and specialists in
work packages. The contracts are
between the management contractor
and the trade contractors, rather
than between the client and sub-
contractors. The management
contractor will not carry out
construction work, but is employed
to manage the process. The
management contractor in theory
assumes responsibility for the
financial (and programme) risks
for the works, but in reality this is
normally diluted by the terms of the
contract so his liability is similar to
that of a construction manager.
Design, Manage and Construct:
similar to the management contract,
with the contractor also being
responsible for the production of the
detailed design or for managing the
detailed design process.
Turnkey contract: A form of a
design and build contract, in which
a single contractor or developer is
responsible for all services, including
finance. Under a turnkey project, the
client enters into a contract with one
party to deliver the entire project.
The project is handed over once it
is completed and fully operational.
The client is normally not involved in
any of the decisions throughout the
building process. There are several
variations of turnkey contracts,
including Engineer-Procure-
Construct (EPC), Build-Own-Lease-
Transfer (BOLR), Design-Build-
Operate-Transfer (DBOT), or PFI.
Private Finance: A detailed and
complicated form of procurement
used predominantly for public
services when the private sector
feels it is advantageous to design,
build, finance and operate a
particular service or building type.
It is becoming more popular in the
Middle East as a way to limit public
sector spending whilst meeting the
demands of a growing population.
Engineer, Procure and Construct
(EPC): EPC is a form of turnkey
contract. This form of procurement
places risk in the right hands
and offers solutions to clients
engineering requirements from those
specialised to meet the performance
requirements set by a client team.
Many of the large utility companies
procure work in this way, bringing
high levels of certainty from the
supply chain which helps to achieve
business critical benefits over the
long-term.
 55

2. MIDDLE EAST FORMS

OF CONTRACT
This article considers the different forms
of contract used in construction across
the region.

Lebanon Syria

Iran
Iraq

Jordan

Kuwait

Egypt
Bahrain
KINGDOM OF
SAUDI ARABIA Qatar

UAE

Oman

Yemen
56
Bahrain
Bahrain
Government work in the Bahrain is undertaken using
a bespoke suite of contract forms that were issued in
2009.
Private developers predominantly use the current
FIDIC Conditions of Contract for Construction, the
1999 edition of the red book, which is well understood
in the local market but often heavily amended for
specific use. Most of the work completed in Bahrain is
under a traditional lump sum form of contract, where the
design is completed upfront and a price agreed with a
contractor before work begins on site. However, many of
the new developments are looking at faster procurement
routes to adapt to market difficulties that are prevalent
within the Middle East. Progress is slow as Bahrain has
a limited number of contractors with the capacity and
capability to undertake large scale projects. Historically
it has been difficult for new contractors to enter the
Bahrain market.
Design and build and two-stage procurement are in
use across the Kingdom but are not considered to
be the industry norm. As more international private
developers have started working in Bahrain with
time constraints as their main driver, the market
has adjusted to accommodate this demand. Design
and build contracts, however, are not routine. This
is largely due to the Committee for Organising
Engineering Professional Practice (COEPP) restrictions
on contractors undertaking in-house design that
necessitates the novation of the clients architect or a
sub consultant appointment.
Kingdom of
Saudi Arabia
Kingdom of Saudi Arabia
Construction contracts in the private sector are
generally based on FIDIC forms of contract and
are amended to suit the particular conditions for
each project. Employers prefer lump sum versus
remeasured contracts and normally exercise great
control in the administration of the construction
process by imposing various restrictions on the
engineers (consultant) authorities under the contract.
All contracts are subject to Saudi laws where Islamic
Sharia is the prime source of legislation. Litigation and
arbitration are both available for resolution of disputes
in the private sector.
Within the public sector, however, construction
contracts are based on the Standard Conditions for
Public Works, which are amended to suit particular
projects. These conditions are generally based on
those given in the 4th edition of the FIDIC Conditions
of Contract for Works of Civil Engineering Construction,
the FIDIC 4 red book, but with greater control given to
the employer for the administration of the contract.
All public work contracts are let on remeasured basis
and subject to the Saudi Government Tendering and
Procurement Regulations, as issued by Royal Decree
M/58 dated 4.7.1427 AH. Disputes are referred to the
Grievance Board and will not be dealt with under
arbitration, unless a Special Council of Ministers
Resolution is issued.

Lebanon
Lebanon
Construction contracts in Lebanon are generally
based upon the FIDIC forms of contract. Some large
scale developers in Lebanon, as well as the Lebanese
government, have promoted the development and use
of bespoke forms of contract, tailored to each client.
Such contracts generally use the FIDIC 4 red book
form as a basis, amended to a greater or lesser degree
depending upon the risk profile of each client.
In the public sector, all works are procured on a
remeasurement basis. The private sector, however,
uses either fixed-price lump-sum or remeasured
contracts.
It is worth noting that there is no standard method of
measurement of building works for Lebanon and the
RICS Principles of Measurement (International) for
Works of Construction (POMI) is widely used.
Design and build contracts are not yet popular in
Lebanon.
Both arbitration and litigation methods are available
for dispute resolutions in the private and public
sectors.
57
Oman
Oman
Public works in Oman are undertaken using a
bespoke government contract known as the Standard
Documents for Building and Civil Engineering Works,
4th edition, 1999. The document is based on early
FIDIC contracts with the 4th edition containing only
minor changes from the previous 3rd edition, 1981.
The most important change is that the contract is now
printed in Arabic. The Ministry of Legal Affairs is in the
process of preparing a new edition but its launch date
is yet to be published.
The Standard Document facilitates both a
remeasurement and lump-sum contract dependent
on a choice of clauses, and is based upon a fully
completed design, specification and bill of quantities.
The RICS Principles of Measurement (International)
are the most widely used method of measurement.
Infrastructure projects have their own method of
measurement, as detailed within the Ministry of
Transport and Communications document, Highway
Design Standards. Oman Tender Board laws require
all government projects to utilise the Standard
Documents on every project, without amendment. In
addition, the Tender Board facilitates all government
tenders, centrally, through the tender board process.
Only Royal Office and Royal Court of Affairs projects
are exempt from this process although they do go
through a similar internal tender process.
Standard Documents are commonly used by private
sector clients in the local market, particularly for
small-to-medium sized contracts. Private clients tend
to prefer the 3rd edition as this is written in English,
but varies only in a minor way from the Arabic 4th
edition preferred by the government ministries.
International and private sector clients with large
project contracts, US$150 million-plus, commonly
use an amended version of the FIDIC red book. Whilst
some of the larger integrated tourism developments
have used a design build form of contract, design and
build as a procurement route is not routinely used.
58
Qatar
Qatar
In Qatar the most common forms for building works
are those issued by the Public Works departments
through the Ministry of Municipal Affairs and
Agriculture (MMAA) and the Qatar Petroleum Company
(QP). These are lump sum contracts, generally using
bills of quantities or specifications and drawings.
These contracts are onerous and slanted towards the
client, but are usually administered in a reasonable
manner.
In the private sector, similar contractual arrangements
are adopted. However, there are now some
construction projects being let using cost plus or
design and build arrangements, although these are
usually for smaller scale fitting out or highly specialist
works.
The market has seen an increase in the number of
FIDIC based contracts being implemented for both
private and key public sector clients. In addition, in
some very long duration contracts, the government is
beginning to introduce a price adjustment mechanism
to allow compensation for fluctuations in market
prices.
Before any contract is awarded, there are commonly
a number of rounds of negotiation, during which the
price and other contractual terms can be modified to
respond to a reduction in contract price.
UAE
UAE
Construction contracts in the UAE are predominantly
based upon the FIDIC forms of contract. The growing
number of large scale developers and major repeat
clients in the region has led to the development of
bespoke forms of contract, tailored to each individual
client. Such contracts generally use the FIDIC 4
red book form as a basis, amended to a greater or
lesser degree depending upon the risk profile of each
client. This also applies to works procured by Dubai
Municipality. Abu Dhabi Municipality, however, bases
its contract on a modified FIDIC 3 form, taken from
the 3rd edition of the FIDIC Conditions of Contract for
Works of Civil Engineering Construction.
Contracts based on the 1999 red book are now
starting to be used in the UAE, but in general the
market remains firmly rooted in the FIDIC 4 form.
Civil works contracts within the UAE are mostly
procured on a remeasurable basis, whereas building
works will generally be based on a fixed-price lump
sum.
However, there are exceptions. More and more clients
are procuring projects using a fast track approach
and will therefore incorporate a remeasurable
element, reflecting those parts of the design which are
incomplete at tender stage.
Design and build contracts are used on some major
projects, but this procurement route is not yet
commonplace. The increasing tendency for clients to
demand a fast track approach to projects does require
a greater design input from the contractor, but this
requirement is not always formalised in the contract
wording itself.

BUILDING REGULATIONS
AND COMPLIANCE
This sections outlines the procedures for
obtaining building permission across the
region.
The AECOM Project Management team
is experienced in the procedures for
obtaining Building Permits across the
region and is able to oversee this process.
Bahrain
Procuring a Municipal Building Permit in
Bahrain is done through a three-stage
process:
Stage 1: Seeking the Preliminary Building
Permit
This is preliminary permission sought from
the Municipality of Bahrain. To complete
the application it is generally sufficient
to include simple outline plans, cross-
sections to indicate overall heights and
an area statement. The main authorities
involved at this stage are the Municipality,
the Physical Planning Directorate and the
Roads Directorate.
Stage 2: Informing the various
Directorates
This should be done in writing to the
Town & Village Planning Directorate,
Roads Directorate, the Civil Defence and
Fire Services Directorate, the Electricity
Distribution Directorate (EDD), EDD
Damage Protection and Control Unit,
the Sanitary Engineering Operations
and Maintenance Directorate, the Water
Distribution Directorate and Batelco. The
initial contact should be made through
the Central Planning Office (CPO) of the
Ministry of Works.
59
Copies of the Title Deeds must be
submitted at this stage. All relevant
information and documentation is given
to each of the above Directorates, until the
final Building Permit is in hand.
Stage 3: Obtaining the Final Municipal
Building Permit
This is the third and last stage and is
processed through each of the Directorates
in specific sequence. The initial contact
should be made through the Municipality
One Stop Shop. All documents, drawings
and Municipality forms must be filled
in and submitted together with the
appropriate fees for each Directorate.
Municipal charges must be paid for the
following elements:
1. Site sign board.
2. Insurance on the site sign board.
3. Insurance for Construction Contract
(refundable).
4. Fee for occupying road.
If the Environmental Affairs Department
are involved in the process, they will
charge a reviewing fee.
Kingdom of Saudi Arabia
Obtaining a Building Permit in the
Kingdom of Saudi Arabia varies from
region to region, however they tend
to follow the same basic principles.
The various procedures and approvals
from the Main Municipality, the Branch
Municipality and the Fire Department
need to be obtained. Obtaining these
approvals typically takes between three to
four months depending on the nature and
size of the building/project.
60
The following is a general outline of the
steps needed to obtain a Building Permit:
Stage 1: Obtaining letter from the Main
Municipality
A letter from the owner is submitted to
the main Riyadh Municipality, along with
a copy of the land deed. The Municipality
checks the masterplan of the area to
ensure the suitability of the plot for
the construction of a building. The
Municipality then writes a letter to the
Branch Municipality of the area where
the plot is located. This process takes five
days and does not incur a charge.
Stage 2: Obtaining Preliminary Location
Permit from Branch Municipality
The owner submits a copy of the letter
obtained previously from the Main
Municipality to the Branch Municipality,
requesting an inspection of the plot to
ensure that the plot length, width and
total area are as indicated on the deed.
The Branch Municipality then issues an
approval to use the land. This process
takes five days and does not incur a
charge.
Stage 3: Obtaining approval from the Fire
Department
The Branch Municipality writes to the Fire
Department, or Civil Defence, to obtain
its approval of the plan submitted by the
owner for the fire-alarm and fire-fighting
systems. The Fire Department approves
these plans and sends them back to the
Municipality. This process takes ten days
and does not incur a charge.
Stage 4: Obtaining a Final Building Permit
The Branch Municipality issues a
Building Permit and sends it to the Main
Municipality for approval, which is given
dependent on the nature of the building.
The owner can collect the Permit from
the Main Municipality after one to three
months. The cost of this Permit is SAR
1,200.
Lebanon
Obtaining a Building Permit in Lebanon
requires various procedures and
approvals from the Order of Engineers
and Architects, the Urban Planning
(Development) Department, statutory
authorities and the Local Municipality. The
time needed to obtain these approvals is
typically between six and twelve months.
In general, the procedures and documents
required for obtaining a Building Permit
are the same throughout Lebanon, except
for the cities of Beirut and Tripoli where
the Urban Development Department is
located within the individual Municipality.
The following is a general outline of the
steps needed to obtain a Building Permit:
Stage 1: Obtaining Ifadat Takhteet Wa
Tasneef
To obtain this the following documents
must be submitted to the Urban Planning
(Development) Department:
1. Real Estate Registry (Ifedeh Ikarieh)
from the Real Estate Department in
each Mohafaza.
2. Official Land Survey (Kharitet Masaha)
from the Cadastre Department.
3. Receipt Wasel Takhteet Wa Irtifak
from the Municipality.
Stage 2: Appointing a registered civil
engineer or an architect from the Order
of Engineers and Architects to finish the
Permit file
The engineer must submit the following
documents:
1. Three copies of the Contract
Agreement between the owner and the
appointed engineer.
2. Four copies of the preliminary design
drawings.
3. A written undertaking from the
appointed engineer to submit the
execution drawings.
4. A contract with other engineers
involved in the project.

Following no objection from the Order of
Engineers and Architects, the appointed
engineer or the owner must pay them
the Building Permit fees to enable them
to present the Building Permit file to
the Urban Planning (Development)
Department.
Stage 3: Appointing a chartered land
surveyor to prepare a topographic
drawing of the land
The appointed chartered land surveyor
must prepare a topographic drawing of
the land illustrating the different levels of
the plot and register this at the Syndicate
of Land Surveyors.
Stage 4: Submitting the Building Permit
file to the Order of Engineers and
Architects for their approval
The appointed engineer must submit an
application which includes a copy of the
Building Permit file for power connection
to Electricit du Liban (EDL) and for other
statutory authorities depending on the
region in which the building is located.
Stage 5: Study of Building Permit file
1. Submit and register the full Building
Permit file to the Urban Planning
(Development) Department. They will
inspect the property and plans to
ensure they conform to construction
laws and regulations and then issue
clearance for the Building Permit.
2. The Urban Planning Department
calculates the Building Permit taxes
depending on the area of the building
and the region in which this building is
located.
3. On approval by the Urban Planning
(Development) Department, part of
the calculated building taxes need to
be paid to the Order of Engineers. The
Building Permit file is withdrawn from
the Urban Planning Department and
registered at the Municipality.
4. On approval of the Building Permit
by the Mayor, the owner shall pay
61
the Building Permit taxes to the
Municipality and the Ministry of
Finance.
Stage 6: Obtaining the Building Permit
The applicant collects the Building Permit
from the Municipality. The appointed
engineer is allowed to apply at the Order
of Engineers and Architects for a letter of
commencement of works following the
submission of the execution file.
Oman
The following is a general outline of the
procedure for obtaining a building permit
in the Sultanate of Oman but there are
many further obligations and procedures
to be completed within each of the stages.
It is generally the responsibility of the lead
consultant to obtain the building permit,
although all applications must be signed
off and submitted by locally registered
consultants.
Stage 1: Submitting concept design/
master plan stage application
The applicant submits a Concept Design/
Master Plan application to the Ministry of
Housing - Directorate General of Planning
for approval of the proposed usage. At
the same time utility requirements are
identified and indicated to the relevant
utility providers. If the project is tourism
related, further approvals are required
from the Ministry of Tourism and the
Supreme Committee for Town Planning.
Stage 2: Obtaining No Objection
Certificates (NOCs)
No Objection Certificates are obtained
from various governmental and municipal
departments, including, Royal Oman
Police, Security Department, Traffic
Department and Civil Defence, Ministry
of Environment, Municipality Road
Department, Ministry of Transport &
Communications, Civil Aviation, and
62
many more project-specific ministry
departments, e.g. Ministry of Education if
the project is a school or university.
Stage 3: Submitting a building permit
application
The full building permit application,
including all NOCs, is submitted to
the relevant municipality or statutory
authority.
Stage 4: Obtaining building occupancy
certificate
Upon completion of the building works, it
is the responsibility of the construction
contractor or lead consultant to obtain
the occupancy permit. This is achieved
by having the building permit signed
off, effectively closing it out. To obtain
this closure, the contractor must obtain
certificates and signatures from various
government departments, including Civil
Defence, Food and Hygiene, etc, prior to
presenting these to the municipality or
statutory authority for final approval.
Qatar
Compared with many countries, the
planning and building approval process in
Qatar is relatively clear and structured.
Land ownership, other than by Qatari
nationals and the state, is still extremely
limited. The key process in securing
development rights is obtaining a land
title or pin number; since without it all
other permits and applications cannot
be commenced. Once the land is secured,
the project masterplan is submitted for
approval to the Planning Department and
local Municipality offices.
Stage 1: DC1 Approval
General overviews and strategies for
the utilities and primary infrastructure
are submitted to the relevant utility
companies for comment. During this
process each department generally issues
a series of reference numbers which are
then used as the file number for all future
submissions. The culmination of this
round of submissions is the DC1 approval.
Stage 2: DC2 Approval
As the design develops, a second round
of submissions is made to the same
utility departments for final approval. In
addition, a submission is made to the Civil
Defence department who review the fire
and life safety aspects of the project.
Depending upon the scale and nature of
the project, separate traffic studies may
be required and these would be submitted
to the Road Affairs Department for
approval.
Stage 3: Building Permit
Once the DC2 approval is secured
a further set of standard forms are
circulated with a consolidated set of
documents for final signing and approval.
These documents constitute the Building
Permit.
As a general guide the whole process
usually takes at least 80 days, depending
upon the quality of the submission,
although in practice if often takes much
longer due to comments from different
departments and progressive design
revisions.
During the whole of this process, it is
generally not advisable to revise or modify
any submission as it may delay the
approval process.
All submissions have to be either in
Arabic or bilingual and endorsed by
locally registered and approved design
companies. International companies
cannot make these submissions by
themselves.

There are some parts of Qatar that are
exempt from the Building Permit approval
process, but these are generally related to
the oil and gas production facilities.
Recently a number of revisions have been
made to the design standards of buildings,
in particular high rise structures. These
address issues such as fire safety, refuge
areas, the use of lifts in the event of fire,
and the nature and extent of faade
glazing.
All fit-out projects are being brought
under the control of the regulatory
departments, in particular Civil Defence,
and all such works are now required
to be submitted for approval prior to
commencement. This submission must be
made by a registered local consultant and
failure to do this can significantly delay
the approval and permitting process.
UAE
The following is a general outline of
the procedure for obtaining a Building
Permit in the UAE, but there are many
further obligations and procedures to
be completed within each of the stages.
Building Permit application Stage 3,
for example, requires no less than 15
different forms, documents and separate
approvals to be submitted as part of the
application.
It is the responsibility of the construction
contractor or lead consultant to obtain the
Building Permit, although all applications
must be signed by locally registered
consultants.
Stage 1: Submitting Preliminary
Application
The applicant submits a preliminary
application to the relevant Municipality or
statutory authority and pays a deposit.
63
Stage 2: Obtaining No Objection
Certificates
No Objection Certificates (NOCs) are
obtained from various governmental and
municipal departments including Civil
Defence, Fire Department, Drainage,
Communication, Water and Electricity,
Civil Aviation, Oil and Gas, Coastal and
Military.
Stage 3: Submitting Building Permit
Application
The full Building Permit application,
including all NOCs, is submitted to
the relevant Municipality or statutory
authority.
Stage 4: Obtaining Building Permit
On approval, the applicant collects
the Building Permit and applies for a
Demarcation Certificate.
Stage 5: Obtaining Building Occupancy
Certificate
Upon completion of the building works, it
is the responsibility of the construction
contractor or lead consultant to obtain
the Occupancy Permit. This is achieved
by having the Building Permit signed
off, effectively closing it out. To obtain
this closure the contractor must obtain
certificates and signatures from various
government and quasi-government
departments, including Civil Defence, Food
and Hygiene and CID, prior to presenting
these to the Municipality or statutory
authority for final approval.
It should be noted that although process
requirements are fairly similar for free
zones in Dubai, certain entities replace
others e.g. Dubai Municipality will be
replaced with Tarakhees and Civil Defence
will be replaced with EHS.
64

04

REFERENCE
DATA
 65

market forces
GLOBAL UNITE
Delivering evidence-based,
data-backed and real-time insights
Global Unite is AECOMs own international
benchmarking and project performance
knowledge system. This system equips our
project teams with the ability to capture,
store and analyze data from all cost plans,
giving teams the knowledge to deliver
better project outcomes and minimise
project budget risks. This gives our clients
unparalleled access to quality global and
local knowledge that adds value to their
project.
Insights gathered by accessing the Global
Unite tool have the capacity not only to
improve project outcomes for our clients
but also to build knowledge and support
the advancement of our industry.
AECOM Global Unite ensures that
construction cost information is captured
in a way that is specific to Middle East
projects, and the other regions in the
AECOM network, while at the same time
it allows the extraction and analysis of
design benchmarks for international
comparison.

Collect and share

project
performance data
to improve project
delivery

instantly engage with client, generate reports and do parametric modeling to create construction cost models.
 66 Measurement
01
Global Unite is available as a web and The latest measurement software allows direct
measurement from the design teams electronic
tablet app for both iOS and Android. drawings (2D or 3D).
Using GUIDE (Global Unite Indicative Accurate cost advice can be provided faster than
before and by collaborating with the design team,
Design Estimator), our project teams can parameters can be set to maximise the potential cost
instantly engage with client, generate savings.
reports and do parametric modeling to
6 create construction cost models. 6

Measurement
Global Data Warehouse
01
03 Cost
02
Quantities and costs are measured and compared
The latest
Design andmeasurement software
cost data from allows
over 10,000 direct
benchmarked against the Global Unite benchmark system. When the
measurement fromstored
projects centrally the design teams electronic
and globally accessible*. design is incomplete, Global Unite provides confidence
drawings (2D or 3D). through an extensive evidence-base.
Automated process that captures all projects by cost
Accurate
managementcost advice
stage. can be provided faster than
before and by collaborating with the design team,
parameters can beadjusted
All historic costs set to maximise theand
by location potential
time tocost
suit
savings.
your project.
*Increasing daily with every completed cost plan globally.
6
110

02 03
2.5
Cost Plan Best Fit

2.0
External Wall : Floor Ratio

01
1.5

04
1.0 University, NSW, 0.98

0.5
Global Data Warehouse
Cost
0 Design and cost data from over 10,000 benchmarked
Quantities andFloor
costs
0 5.000 10,000 15,000 20,000 projects centrally stored and globally accessible*.
Area (m are
) measured and compared 2

against the Global Unite benchmark system. When the Automated process that captures all projects by cost
design is incomplete, Global Unite provides confidence
Benchmarking and Analytics management stage.
through an extensive evidence-base.
All historic costs adjusted by location and time to suit
Compare cost and design attributes against local your project.
or worlds best practice to better inform project
decisions. *Increasing daily with every completed cost plan globally.

110
111

2.5
Cost Plan Best Fit

2.0
External Wall : Floor Ratio

01
1.5

04
1.0 University, NSW, 0.98

0.5

0
0 5.000 10,000 15,000 20,000
Floor Area (m2)

Benchmarking and Analytics

 67

International Building Cost Comparison

RESIDENTIAL
Average Standard High Rise Residential Average Luxury
High Rise High Rise
New York 4,320 5,290
San Francisco 4,300 5,200
Los Angeles 4,100 5,020
Toronto 3,510 4,240
Paris 3,190 4,440
London 2,903 3,900
Singapore 2,660 3,570
Sydney 2,530 2,910
Hong Kong 2,360 3,060
Auckland 2,320 2,630
Doha 1,580 2,150
Riyadh 1,580 1,890
Moscow 1,500 2,000
Dubai 1,360 1,800
Bahrain 1,300 1,600
Beijing 1,210 1,530
Johannesburg 895 1,550
Istanbul 850 1,680
Bangkok 795 1,065
Ho Chi Minh 715 860
Mumbai 325 430

USD per square metre

Note: Relative building costs based on Q2 2014, foreign exchanges rates as of 1 March 2014.
Cities ordered by residential average standard high rise.
68

Average
COMMERCIAL Standard Prestige Major
Average Standard Office High Rise Office Office High Shopping
High Rise Rise Centre

New York 4,590 5,180 3,620

San Francisco 4,550 5,150 3,600

Los Angeles 4,160 4,860 3,130

Toronto 3,710 4,200 2,940

Paris 3,330 4,440 4,860

London 3,090 3,900 5,530

Sydney 2,810 3,190 2,250

Auckland 2,720 3,180 2,400

Hong Kong 2,440 3,140 3,550

Singapore 2,420 3,130 3,330

Moscow 2,000 2,500 1,500

Doha 1,850 2,100 1,250

Dubai 1,600 1,850 1,400

Riyadh 1,580 2,100 1,370

Johannesburg 1,180 1,510 1,170

Bahrain 1,170 1,280 1,230

Istanbul 1,150 1,760 1,350

Beijing 1,120 1,560 1,510

Ho Chi Minh 855 1,270 820

Bangkok 805 1,035 920
Mumbai 370 410 485

USD per square metre

Note: Relative building costs based on Q2 2014, foreign exchanges rates as of 1 March 2014.
Cities ordered by average standard office high rise.
 69

INDUSTRIAL
Light Duty Factory Light Duty Heavy Duty
Factory Factory
Singapore 1,790 N/A

Hong Kong 1,670 N/A

Paris 1,670 2,500

New York 1,650 2,160

San Francisco 1,620 2,130

London 1,580 2,610

Los Angeles 1,350 1,840

Toronto 1,320 1,740

Moscow 1,000 1,900

Doha 990 1,150

Istanbul 750 1,900

Riyadh 740 950

Dubai 630 930

Bahrain 620 700

Sydney 610 770
Auckland 600 760
Beijing 570 N/A
Mumbai 535 N/A
Bangkok 460 N/A
Johannesburg 405 565
Ho Chi Minh 390 N/A

USD per square metre

Note: Relative building costs based on Q2 2014, foreign exchanges rates as of 1 March 2014.
Cities ordered by light duty factory.
70

5 Star 3 Star Resort

TOURISM
5 Star Luxury Hotel Luxury Budget Style Hotel
Hotel Hotel

Paris 6,530 3,060 3,470

New York 5,430 2,590 5,400

San Francisco 5,290 2,540 5,400

London 5,220 2,610 2,970

Los Angeles 5,180 2,430 5,290

Hong Kong 4,540 3,340 N/A

Singapore 4,440 2,900 4,210

Toronto 4,310 2,070 4,400

Auckland 4,110 2,990 3,750

Sydney 4,030 2,910 3,660

Istanbul 3,800 1,870 1,750

Moscow 3,500 2,200 2,700

Doha 3,500 2,100 3,950

Dubai 3,000 2,150 3,600

Riyadh 2,780 1,790 3,360

Bahrain 2,620 1,800 3,200

Johannesburg 2,370 1,795 2,840

Beijing 2,360 1,150 2,960

Bangkok 1,615 860 1,555

Ho Chi Minh 1,375 775 1,300

Mumbai 1,035 625 1,190

USD per square metre

Note: Relative building costs based on Q2 2014, foreign exchanges rates as of 1 March 2014.
Cities ordered by 5 star luxury hotel.
 71

International Building Cost Comparison

Hong
Building Type (USD / m) Sydney Auckland Bahrain Dubai Doha Riyadh Kong
Residential
Average Multi Unit High Rise 2,530 2,320 1,300 1,360 1,580 1,580 2,360
Luxury Unit High Rise 2,910 2,630 1,600 1,800 2,150 1,890 3,060
Commercial
Average Standard Offices 2,810 2,720 1,170 1,600 1,850 1,580 2,440
High Rise
Prestige Offices High Rise 3,190 3,180 1,280 1,850 2,100 2,100 3,140
Major Shopping Centre 2,250 2,400 1,230 1,400 1,250 1,370 3,550
Industrial
Light Duty Factory 610 600 620 630 990 740 1,670
Heavy Duty Factory 770 760 700 930 1,150 950 N/A
Hotel
3 Star Budget 2,910 2,990 1,800 2,150 2,100 1,790 3,340
5 Star Luxury 4,030 4,110 2,620 3,000 3,500 2,780 4,540
Resort Style 3,660 3,750 3,200 3,600 3,950 3,360 N/A
Other
Multi Storey Car Park 800 810 620 700 850 630 1,110
District Hospital 3,610 3,350 2,450 3,050 3,800 2,100 N/A
Primary & Secondary Schools 1,640 2,070 1,510 1,500 1,300 1,160 2,440
Ex. Rate at 1 March 2014 AUD NZD BHD AED QAR SAR HKD
1 USD = 1.11 1.19 0.37 3.67 3.63 3.75 7.76

Costs based on Q2 2014. Exchange rates based on 1 March 2014

Prices exclude land, site works, professional fees, tenant fitout and equipment
Hotel rate includes FF&E
Excl. GST/VAT
Moscow residential and commerical rates includes FF&E
Exchange rate based on 1 March 2014
72

Ho Chi Johan- Los

Building Type (USD / m) Beijing Singapore Minh Mumbai Bangkok nesburg Angeles
Residential
Average Multi Unit High Rise 1,210 2,660 715 325 795 895 4,100
Luxury Unit High Rise 1,530 3,570 860 430 1,065 1,550 5,020
Commercial
Average Standard Offices 1,120 2,420 855 370 805 1,180 4,160
High Rise
Prestige Offices High Rise 1,560 3,130 1,270 410 1,035 1,510 4,860
Major Shopping Centre 1,510 3,330 820 485 920 1,170 3,130
Industrial
Light Duty Factory 570 1,790 390 535 460 405 1,350
Heavy Duty Factory N/A N/A N/A N/A N/A 565 1,840
Hotel
3 Star Budget 1,150 2,900 775 625 860 1,795 2,430
5 Star Luxury 2,360 4,440 1,375 1,035 1,615 2,370 5,180
Resort Style 2,960 4,210 1,300 1,190 1,555 2,840 5,290
Other
Multi Storey Car Park N/A 750 345 175 340 435 1,510
District Hospital N/A N/A N/A N/A N/A 1,180 7,880
Primary & Secondary Schools N/A 1,590 N/A 290 N/A 810 3,580
Ex. Rate at 1 March 2014 RMB SGD VND INR THB ZAR USD
1 USD = 6.14 1.26 21080 61.84 32.50 10.73 1.00
 73

San
Building Type (USD / m) Francisco New York London Paris Moscow Istanbul Toronto
Residential
Average Multi Unit High Rise 4,300 4,320 2,903 3,190 1,500 850 3,510
Luxury Unit High Rise 5,200 5,290 3,900 4,440 2,000 1,680 4,240
Commercial
Average Standard Offices 4,550 4,590 3,090 3,330 2,000 1,150 3,710
High Rise
Prestige Offices High Rise 5,150 5,180 3,900 4,440 2,500 1,760 4,200
Major Shopping Centre 3,600 3,620 5,530 4,860 1,500 1,350 2,940
Industrial
Light Duty Factory 1,620 1,650 1,580 1,670 1,000 750 1,320
Heavy Duty Factory 2,130 2,160 2,610 2,500 1,900 1,900 1,740
Hotel
3 Star Budget 2,540 2,590 2,610 3,060 2,200 1,870 2,070
5 Star Luxury 5,290 5,430 5,220 6,530 3,500 3,800 4,310
Resort Style 5,400 5,400 2,970 3,470 2,700 1,750 4,400
Other
Multi Storey Car Park 1,800 1,800 730 830 650 550 1,470
District Hospital 8,100 7,340 3,130 3,750 2,250 1,640 6,600
Primary & Secondary Schools 4,270 4,270 2,610 3,060 1,400 1,100 3,480
Ex. Rate at 1 March 2014 USD USD GBP EUR RUB TRY CAD
1 USD = 1.00 1.00 0.59 0.72 35.87 2.20 1.11
74

Regional Building Cost Comparison

Beirut, Riyadh, Doha, Manama, Muscat, Dubai,

Building Type (USD / m) Lebanon KSA Qatar Bahrain Oman UAE
Residential
Average Multi Unit High Rise 1,500 1,580 1,580 1,300 N/A 1,360
Luxury Unit High Rise 1,800 1,890 2,150 1,600 N/A 1,800
Individual Prestige Houses 2,200 1,680 2,000 1,700 2,050 1,600
Commercial/Retail
Average Standard Offices High 1,200 1,580 1,850 1,170 N/A 1,600
Rise
Prestige Offices High Rise 2,590 2,100 2,100 1,280 N/A 1,850
Major Shopping Centre 1,250 1,370 1,250 1,230 1,010 1,400
Industrial
Light Duty Factory 825 740 990 620 780 630
Heavy Duty Factory 1,100 950 1,150 700 990 930
Hotel
3 Star Budget 1,850 1,790 2,100 1,800 1,650 2,150
5 Star Luxury 3,300 2,780 3,500 2,620 2,690 3,000
Resort Style N/A 3,360 3,950 3,200 3,410 3,600
Other
Multi Storey Car Park 550 630 850 620 780 700
District Hospital 3,000 2,100 3,800 2,450 2,310 3,050
Primary & Secondary Schools N/A 1,160 1,300 1,510 1,300 1,500
LBP SAR QAR BHD OMR AED
US$ 1= 1,484 3.75 3.63 0.37 0.38 3.67

Middle East
Relative Cost of Construction
115

104
100

96
93

86
Manama, Muscat, Riyadh, Dubai, Beirut, Doha,
Bahrain Oman KSA UAE Lebanon Qatar

Note: Relative cost of construction are based on typical build costs in USD. Influence of foreign exchange
fluctuations, unique site conditions, design attributes and applicalbe tariffs must be considered when
comparing actual projects. Relative costs are based on an average across all sectors.
 75

Mechanical & Electrical Cost Comparison

Beirut, Riyadh, Doha, Manama, Muscat, Dubai,

Building Type (USD / m) Lebanon KSA Qatar Bahrain Oman UAE
Q2 2014 Q2 2014 Q2 2014 Q2 2014 Q2 2014 Q2 2014
Residential
Average Multi Unit High Rise 350 380 445 440 N/A 420
Luxury Unit High Rise 450 560 550 730 N/A 560
Individual Prestige Houses N/A N/A N/A N/A 780 N/A
Commercial/Retail
Average Standard Offices High Rise 350 505 555 N/A N/A 460
Prestige Offices High Rise 435 760 630 670 N/A 600
Major Shopping Centre 560 340 350 420 450 540
Industrial
Light Duty Factory 250 305 315 350 320 370
Heavy Duty Factory 325 350 420 400 435 495
Hotel
3 Star Budget 285 520 70 580 650 420
5 Star Luxury 690 1,100 900 870 1,430 845
Resort Style N/A 1,210 945 1,000 1,690 910
Other
Multi Storey Car Park 150 240 145 120 140 135
District Hospital 1,030 1,010 1,480 1,065 1,102 1,280
Primary & Secondary Schools N/A N/A 400 N/A 365 N/A
LBP SAR QAR BHD OMR AED
US$ 1= 1,484 3.75 3.63 0.37 0.38 3.67
76

Major Measured Unit Rates

Beirut, Riyadh, Doha, Manama, Muscat, Dubai,

Description Unit Lebanon KSA Qatar Bahrain Oman UAE
Unit Rates in US$ Q2 2014 Q2 2014 Q2 2014 Q2 2014 Q2 2014 Q2 2014
Basement Excavation m 15 12 14 7 5 4
Foundation Excavation m 16 14 15 8 7 14
Imported Structural Fill m 35 14 32 18 13 22
Concrete in Pad Footings
m 125 131 150 117 93 95
(25mpa)
Concrete in Walls (32mpa) m 135 137 160 122 101 112
Concrete in Slabs (32mpa) m 125 137 160 117 96 109
Formwork to Slab Soffits
m 20 34 44 20 23 31
(under 5m high)
Formwork to Side and
m 23 42 44 21 18 33
Soffits of Beams
Precast Wall Panel
Architectural with Sand m 200 210 185 205 246 182
Blast Finish
Reinforcement in Beams kg 1.1 1 1.4 1 1 1
Structural Steel in Beams kg 3.5 4 4 3 3 3
Structural Steel in Trusses kg 3.5 4 4 3 3 3
Hollow Concrete Block
m 30 32 44 27 22 54
Partition (200mm thick)
Aluminium Framed
Window (6.5mm clear glass m 250 462 260 220 263 272
commercial quality)
Aluminium Curtain
Wall System (including m 700 646 600 583 513 540
structural system)
Average Quality Steel Stud
Partition (with single layer m 50 54 95 52 54 40
plasterboard each side)
Suspended Mineral Fibre
m 32 37 36 40 33 45
Ceiling
Paint on Plasterboard Walls m 10 8 5 5 5 5
Ceramic Tiles to Walls m 35 37 70 53 33 45
Average Quality Marble
m 130 168 200 160 109 163
Paving on Screed
Anti Static Carpet Tiles to
m 65 63 74 50 71 55
Office and Admin Areas
LBP SAR QAR BHD OMR AED
US$ 1= 1,484 3.75 3.63 0.37 0.38 3.67
 77

Major Material Prices

Beirut, Riyadh, Doha, Manama, Muscat, Dubai,

Description Unit Lebanon KSA Qatar Bahrain Oman UAE
Prices in US$ Q2 2014 Q2 2014 Q2 2014 Q2 2014 Q2 2014 Q2 2014

ORDINARY PORTLAND CEMENT

In Bags Tn 100 91 87 87 86 90
In Bulk Tn 93 81 85 80 76 83
SAND
Sand for concreting m 22 17 27 20 12 25

AGGREGATE

19mm Aggregate m 17 22 36 25 12 18

READY MIXED CONCRETE

Grade 50 (OPC) m 95 75 110 90 85 100

Grade 40 (OPC) m 86 70 105 80 74 87
Grade 20 (OPC) m 76 60 97 69 62 72

REINFORCING STEEL

High tensile Tn 590 750 945 800 737 890

Mild Steel Tn 605 750 890 800 740 969

HOLLOW CONCRETE BLOCKWORK

100mm thick m 5 9 10 18 6 10
200mm thick m 9 11 11 20 7 13

STRUCTURAL STEELWORK

Mild steel grade 50 to BS Tn 1,500 1,500 1,575 1,300 1,311 817

4360

TIMBER

Hardwood Meranti m 1,600 765 1,185 790 819 584

Softwood m 550 450 790 395 403 379

FUEL

Diesel Litre 0.86 0.07 0.27 0 0.39 0.94

Petrol Premium 95 Litre 1.12 0.16 0.25 0 0.33 0.50
LBP SAR QAR BHD OMR AED
US$ 1= 1,484 3.75 3.63 0.37 0.38 3.67

These cost rates (US$) are indicative and represent supply only costs of the materials listed. Location factors should be applied to
address geographic variations in each country. The rates are exclusive of VAT (Value Added Tax) or similar, where applicable.
78

Labor Costs

Beirut, Riyadh, Doha, Manama, Muscat, Dubai,

Description Unit Lebanon KSA Qatar Bahrain Oman UAE

Q2 2014 Q2 2014 Q2 2014 Q2 2014 Q2 2014 Q2 2014

Concreter Day 28 60 40 29 28 31
Steel Bender Day 28 65 40 58 28 45
Carpenter Day 38 65 44 58 29 42
Mason Day 35 65 44 50 29 41
General Labourer Day 23 33 30 40 32 37
Crane Operator Day 60 33 66 84 50 63
Heavy Machinery Day 55 80 66 75 49 63
Operator
Dump Truck Driver Day 35 70 50 59 45 51
Plumber Day 38 85 60 75 40 47
Electrician Day 35 80 60 87 40 48
Foreman Day 95 110 95 132 77 52
Site Engineer Month 5,000 5,000 7,250 5,250 3,404 6,160
Construction Manager Month 10,000 13,000 14,500 11,130 6,029 12,320
LBP SAR QAR BHD OMR AED
US$ 1= 1,484 3.75 3.63 0.37 0.38 3.67

These rates (US$) are indicative and represent an all-in unit cost for each of the disciplines listed; and are
- inclusive of: wages, salaries and other remunerations prescribed by local labour legislation; average allowances for costs of
employment; recruitment; visas/permits; paid leave; travel; accommodation; health and welfare; but
- exclusive of: overtime working; contractor mark-up for overheads and profit; VAT (Value Added Tax) or similar where applicable.

These rates should not be misinterpreted as contractors daywork rates.

 79

Middle East Indices

The UAE Tender Price Index is AECOMs
assessment of construction tender prices
in the UAE. It is compiled by AECOMs
Middle East Business Intelligence team
based on actual returns of projects.
It is based on new build and
refurbishment projects across a variety
of construction sectors and covers all
emirates of the UAE.
The Index is therefore a measure of
average price increases across differing
project types and locations. It should be
regarded as a guide only when looking
at any specific project, as the pricing of
individual projects will vary depending on
such factors as their complexity, location,
timescale, etc.

Construction Materials &

Unit Rates Commodities
Index Index
2009 103.5 89.6
2010 104.9 108.1
2011 100.1 125.8
2012 95.1 120.6
2013 96.5 114.4
2014e 99.6 112.3

UAE Tender Price Index and Material Index

Q4 2009=100
UAE Tender Price Index and Forecasts
160
Annual Percentage Change (%)
150
2012 2013 2014 2015f 2016f
140
-5 1.4 3-4 4.6 4-6
130

120

110

100

90

80

70

60
Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016

TPI Baseline TPI Lower Range Forecast

TPI Higher Range Forecast Material Price Index

Source: AECOM, IMF, ME Steel

*TPI Forecast is indicative only and is based on AECOM view as at July 2014
**Material Price Index Forecast is inidcative and based on IMF Forecasts as at July 2014
***Forecasts are subject to chance without prior notice once new information is available
 80

TYPICAL BUILDING SERVICES STANDARDS FOR OFFICES

Subject BCO (UK) Bahrain UAE Specification* Qatar Specification Oman Lebanon
Specification 2009 Specification Specification Specification
Net : Gross Ratio (Typical) 80 - 85% 70 - 80% 75 - 80% 70 - 80% 70 - 80% 80 - 85%
Occupancy Standards -
1:8 - 1:13/m 1:10 - 1:14/m 1:10 - 1:15/m 1:10 - 1:14/m 1:10 - 1:15/m 1:12 - 1:14/m
Typical
Occupancy Standards -
none stated 1:7 - 1:12/m 1:7/m2 1:7 - 1:12/m 1:7/m2 1:7/m
Dealer
Occupancy Standards - Single sex 1 person Single sex 1 person Single sex 1 person Single sex 1 person Single sex 1 person Single sex 1 person
Toilets to 12m using to 12m using to 12m using to 12m using to 12m using to 14m using
60/60 male/female 70/30 male/female 70/30 male/female 70/30 male/female 70/30 male/female 60/60 male/female
ratio based on ratio based on ratio based on ratio based on ratio based on ratio based on
120% population. 120% population. 120% population. 120% population. 120% population. 120% population.
Form of Air Conditioning Fan Coil Units, Fan Coil Units, Fan Coil Units, VAV, Fan Coil Units, VAV, Fan Coil Units, VAV, Fan Coil Units, VAV,
VRV/ VRF, VAV, VAV, DX, Constant Downflow Units VAV with Re-Heat, Downflow Units Displacement,
Displacement, Volume DX, Constant Chilled Ceiling/
Chilled Ceiling/ Volume, plate heat Beam
Beam, Natural exchangers
or mixed mode
ventilation.
Heating and Air 24oC, +/- 2oC 22oC, +/- 1oC 22oC, +/- 2oC 22oC, +/- 2oC 22oC, +/- 2oC 22oC, +/- 2oC
Conditioning Internal (Summer)
Criteria 22oC, +/- 2oC
(Winter)
Fresh Air Supplies 12 - 16 Liters per 10 Liters per 12 - 16 Liters per 12 - 16 Liters per 12 - 16 Liters per 12 - 16 Liters per
second per person second per person second per person second per person second per person second per person
Ventilation - WCs (Extract) none stated 12 Air Changes per 3 - 10 Air Changes 10 Air Changes per 10 Air Changes per None Stated
Hour per Hour Hour Hour
Internal Heat Gains - 12 w/m 15 w/m 12 W/m 12 - 15 W/m 12 w/m 12 w/m
Lighting load
Internal Heat Gains - none stated 25 w/m 15 W/m 15 W/m 15 w/m 12 w/m
Equipment load (Typical)
Subject BCO (UK) Bahrain UAE Specification* Qatar Specification Oman Lebanon
Specification 2009 Specification Specification Specification
Internal Heat Gains - none stated 60 - 215 w/m 45 W/m None none stated None
Equipment load (Dealer)
Supplementary cooling 25w/m, 25%area) None 25 W/m to None none stated 25w/m, 25%area)
allowance (e.o./% area) 25%area
Acoustics - Offices NR 35 - 40 NR 35 NR 30 - 35 NR 30 - 35 NR 30 - 35 NR 35 - 38
Acoustics - Common Areas NR 40 - 45 NR 40 NR 40 - 45 NR 40 NR 40 NR 40 - 45
Primary Power - Lighting 12 w/m 15 w/m 12 W/m 12 - 15 W/m 12 - 15 W/m 12 w/m
Primary Power - Typical 15 - 25 w/m 35 w/m 25 W/m 30 - 40 W/m 25 - 30 W/m 15 - 25 w/m
Primary Power - Dealer none 400, 800 or 1,500 w 800 or 1,600 W / None none stated none
per desk person
Primary Power Upgrade (e/o 20 - 25w/m, 20 - None 25 W/m to None none stated 20 - 25w/m, 20 -
power/ % area) 25% area. 25%area 25% area.
Lighting - Office 300 - 500lux, 400 - 500lux 350 - 500lux, 500lux 400 - 500lux, 300 - 500lux,
Uniformity Ratio 0.7 Uniformity Ratio Uniformity Ratio Uniformity Ratio
0.8 0.8 0.8
Lighting - Stairs/Circulation 200 - 270lux 250lux 200 - 270lux
Lighting - WC's 215lux 200lux 215lux
Lighting - Plantrooms 215lux 150lux 215lux
Passenger lifts - Capacity 80% Loading with 80% Loading with 80% Loading with 80% Loading with 80% Loading with 80% Loading with
and waiting times 25 Second waiting 35 Second waiting 35 Second waiting 30 Second waiting 30 Second waiting 30 Second waiting
interval, handling interval, handling interval, handling interval, handling interval, handling interval, handling
15% in 5 minutes. capacity of 11% to 15% in 5 minutes. 15% in 5 minutes. 15% in 5 minutes. 15% in 5 minutes.
Population density 17% in 5 minutes. Population density Population density Population density Population density
1:12 Population density 1:14 1:14 1:14 1:14
1:12

* Specific to the Emirate of Abu Dhabi (differing standards in the seven

Emirates). Excludes implications of new building code regulations for the
Emirate due to be come into effect at the beginning of the 2011.
81
82

Exchange Rates
US$ 1.00 to local currency

2013
July 2014
Average Low High
Lebanese Pound 1,497 1,488 1,483 1,498
Egyptian Pound 7.13 6.87 6.50 7.06
Jordanian Dinar 0.709 Fixed
Saudi Riyal 3.75 Fixed
Kuwait Dinar 0.282 0.283 0.281 0.285
Qatari Riyal 3.64 Fixed
Bahraini Dinar 0.376 Fixed
UAE Dirham 3.67 Fixed
Omani Rial 0.384 Fixed
Iraqi Dinar 1,153 1,150 1,144 1,158
Source: Oanda.com
 83

Weights And Measures

Metric Measures and Equivalents Imperial Measures and Equivalents

Length
1 millimeter (mm) = 1 mm = 0.0394 in
1 centimeter (cm) = 10 mm = 0.3937 in
1 meter (m) = 100 cm = 1.0936 yd
1 kilometer (km) = 1000 m = 0.6214 mile
Area
1 square centimeter (cm2) = 100 mm2 = 0.1550 in2
1 square meter (m2) = 10 000 cm2 = 1.1960 yd2
1 hectare (ha) = 10 000 m2 = 2.4711 acres
1 square kilometer (km )
2
= 100 ha = 0.3861 mile
Capacity/Volume
1 cubic centimeter (cm3) = 1 cm3 = 0.0610 in3
1 cubic decimeter (dm3) = 1000 cm3 = 0.0353 ft3
1 cubic meter (m3) = 1000 dm3 = 1.3080 yd3
1 liter (liter) = 1 dm3 = 1.76 pt
1 hectoliter (hl) = 100 liter = 21.997 gal
Mass (Weight)
1 milligram (mg) = 0.0154 grain
1 gram (g) = 1000 mg = 0.0353 oz
1 kilogram (kg) = 1000 g = 2.2046 lb
1 tonne (t) = 1000 kg = 0.9842 ton
USA Measures and Equivalents
USA Dry Measure Equivalents
1 pint = 0.9689 UK pint = 0.5506 liter
Length
1 inch (in) = 2.54 cm
1 foot (ft) = 12 in = 0.3048 m
1 yard (yd) = 3 ft = 0.9144 m
1 mile = 1760 yd = 1.6093 km
1 int. nautical mile = 2025.4 yd = 1.853 km
Area
1 square inch (in2) = 6.4516 cm2
1 square foot (ft2) = 144 in2 = 0.0929 m2
2
1 square yard (yd2) = 9 ft2 = 0.8361 m2
1 acre = 4840 yd2 = 4046.9 m2
1 sq mile (mile2) = 640 acres = 2.59 km2
Capacity/Volume
1 cubic inch (in3) = 16.387 cm3
1 cubic foot (ft3) = 1728 in3 = 0.0283 m3
1 fluid ounce (fl oz) = 28.413 ml
1 pint (pt) = 20 fl oz = 0.5683 litre
1 gallon (gal) = 8 pt = 4.5461 litre
Mass (Weight)
1 ounce (oz) = 437.5 grains = 28.35 g
1 pound (lb) = 16 oz = 0.4536 kg
1 stone = 14 lb = 6.3503 kg
1 hundredweight (cwt) = 112 lb = 50.802 kg
1 ton = 20 cwt = 1.016 tonne
Temperature Conversion
C = 5/9 (F 32) F = (9/5 C) + 32

USA Liquid Measure Equivalents

1 fluid ounce = 1.0408 UK fl oz = 29.574 ml
1 pint (16 fl oz) = 0.8327 UK pt = 0.4723 liter
1 gallon = 0.8327 UK gal = 3.7854 liter
84

05

AECOM
MIDDLE EAST
CONSTRUCTION
SURVEY
 85

ABOUT AECOMS MIDDLE

EAST CONSTRUCTION SURVEY
At the beginning of 2014, AECOM surveyed The questions we ask of the industry fall
key decision makers from government, into the following categories:
developers, engineering and construction
companies operating in the Middle East. All Industry prospects
survey responses were gathered through -- Workload trends and expectations
online questionnaires. Company-specific -- Growth markets and sectors
responses to the survey are kept strictly -- Industry growth drivers and
confidential by AECOM and only aggregate obstacles to growth
data is published. -- Confidence in market outlook and
key risks
The Middle East Construction Sentiment
Survey assesses the state of construction Investments
industry, examines the drivers and barriers -- Organizational prospects
currently at play and reflects on concerns -- Workload trends and expectations
expressed by industry stakeholders. -- Opportunities for growth
Respondents represent a cross-section of -- Investment priorities
organization sizes, locations and markets, -- Target markets and sector focus
including energy, transport, real estate, -- Growth strategies and tools for
industrial, healthcare, education and growth
government.
Project planning and delivery
2014 MIDDLE EAST CONSTRUCTION SURVEY -- Project Finance
Survey composition -Respondents operating sectors -- Success factors and obstacles to
project delivery
-- Opportunities and risks
-- Competition and Costs

Encouraged by the results of this years

survey we will continue to engage with
our clients to discuss industry trends and
prospects and how we can respond to
challenges and opportunities posed to us
by our clients.

Real Estate Transport

Hospitality + Culture Industrial

Social Infrastructure, Civic, Defense Energy + Utilities

Other
86

06

DIRECTORY
OF OFFICES
 87

MIDDLE EAST

Kingdom of Bahrain Riyadh Office

4th Floor, Tower 4
Manama Office
Tatweer Tower
Al Saffar House
King Fahad Road
Unit 22B, Building No 1042
PO Box 58729
Block 436, Road 3621
Riyadh 11515
Seef District
Manama, Bahrain
T: 966 11 200 8160
PO Box 640
F: 966 11 200 8787
T: 973 17 588 769
saudiarabia.middleeast@aecom.com
F: 973 17 581 288

aecombahrain@aecom.com
Kuwait
Kuwait City Office
Kingdom of Saudi Arabia Office 5311, 2nd Floor
Dar Al Awadi
Al Khobar Office (Regional Head Office)
Ahmed Jaber Street
AECOM Arabia Ltd.
Sharq, Kuwait
Al Khereji Business Centre, Level 1
PO Box 29927
King Faisal Road, Bandariyah District
Al Khobar, KSA
T: 965 2 23 22 999
PO Box 1272
F: 965 2 23 22 990
T: 966 13 8494400
F: 966 13 8494411
Lebanon
AAL.MiddleEast@aecom.com Beirut Office
1st Floor, Chatilla Building
Australia Street
Jeddah Office Rawche, Shouran
7th Floor, Bin Sulaiman Center Beirut, Lebanon
Al Rawdah Street PO Box 13-5422
PO Box 15362, Jeddah 21491
Saudi Arabia T: 961 1 780 111
F: 961 1 809 045
T: 966 2 606 9170
F: 966.2.606 9205

saudiarabia.middleeast@aecom.com
88

Oman United Arab Emirates

Muscat Office Abu Dhabi Region
PO Box 434, Al Khuwair,
Postal Code 133
Way No. 3933 Abu Dhabi Office (Regional Head Office)
Building No. 2910 International Tower
Muscat, Oman Capital Center, Abu Dhabi
PO Box 53
T 968 2 448 1664
F 968 2 448 9491 T: 971 2 613 4000
F: 971 2 613 4001
muscat.middleeast@aecom.com
abudhabi@aecom.com

Qatar Al Ain Office

Burj Doha Office Level 1, Liwa Center Building
Level 25 PO Box 1419
PO Box 6650 Al Ain
Burj Doha, West Bay
Doha, State of Qatar T: 971 3 702 6600
F: 971 3 755 4727
T: 974 4 001 9150
F: 974 4 001 9151 alain@aecom.com

Jaidah Square (Qatar Head Office) Dubai and Northern

4th Floor, Jaidah Square Emirates Region
Umm Ghuwalina, Al Matar Street
PO Box 6650
Dubai Office
Doha, State of Qatar
UBora Tower, Levels 43 & 44
PO Box 51028
T: 974 4 407 9000
Business Bay
F: 974 4 437 6782
Dubai

T 971 4 439 1000

F 971 4 439 1001

dubai@aecom.com
89
90

About AECOM

Ranked as the #1 engineering design firm by revenue

in Engineering News-Record magazines annual
industry rankings, AECOM is a premier, fully integrated
infrastructure and support services firm, with a broad
range of markets, including transportation, facilities,
environmental, energy, water and government. With
approximately 45,000 employees including architects,
engineers, designers, planners, scientists and
management and construction services professionals
serving clients in more than 150 countries around
the world, AECOM is a leader in all of the key markets
that it serves. AECOM provides a blend of global reach,
local knowledge, innovation and technical excellence in
delivering solutions that create, enhance and sustain
the worlds built, natural and social environments. A
Fortune 500 company, AECOM has annual revenue of
approximately $8.0 billion.

More information on AECOM and its services can be

found at www.aecom.com.

Follow us on Twitter: @aecom

Authors
Maren Baldauf-Cunnington
Hamed Madani
Margreet Papamichael

We appreciate your feedback and

comments. Please contact us at
bi_middleeast@aecom.com