The UAE recorded USD 39.7 bn in construction contract values in 1H 2025, with the sector on track to hit USD 130.8 bn in output value by 2029, according to Knight Frank’s 1H 2025 Construction Landscape report (pdf). Output growth, set to rise 4% annually through 2029, is underpinned by government diversification agendas and population growth, the firm said in a separate press release.

Pipeline swells: The construction pipeline now stands at USD 478.7 bn, accounting for 62% of all planned projects nationwide, far ahead of transport (12%) and power (7%). Mixed-use projects account for the majority of future projects at 42%, followed by residential real estate (28%), data centers (9%), and hospitality (4%).

Dubai in the lead: In Dubai, three-quarters of contract awards are in the construction sector, compared to 23% in Abu Dhabi, where oil and gas dominate. Dubai’s pipeline includes Palm Jebel Ali, The Oasis by Emaar, Marsa Al Arab, and the 15-km Blue Line metro expansion. The emirate also has 8.2 mn sq ft of office space under construction, due for delivery by 2028.

Abu Dhabi builds transport + housing: Major construction projects in the capital include a 150-km, high-speed rail to Dubai and a 131-km metro network, both slated for completion by 2030. Around 33k residential units are under construction for delivery by 2029, 71% of which are apartments. Office supply is also set to surge in 2027, with nearly 175k sqm scheduled to come online.

Costs: As of mid-2025, residential construction costs range from AED 4.2k per sqm for standard villas to AED 11k for high-end, while commercial builds average AED 5.5k-7.3k per sqm. In 1Q 2025, Dubai’s Construction Cost Index rose 0.8% y-o-y on higher equipment hire and wages, while Abu Dhabi saw a 0.8% q-o-q increase, driven mainly by labor costs.

Following on from previous momentum: The UAE awarded USD 121 bn in contracts in 2024, led by real estate (USD 66 bn) and oil and gas (USD 33.3 bn), according to BNC Network. The country also held a 31.6% share of GCC project awards in 2Q 2024, with USD 856.9 bn in ongoing or upcoming projects. Since 2020, contracts have totaled USD 328.7 bn, 85% of which were in Dubai (USD 129.9 bn) and Abu Dhabi (USD 151 bn), according to Knight Frank.

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