The price of progress
By
Through innovation, collaboration, and a commitment to long-term value, the Middle East is set to redefine what's possible in construction says AESG's Daniel King
The GCC construction sector continues to experience a remarkable boom, with iconic projects redefining skylines and ambitious visions transforming urban landscapes. From its impressive US $177bn value in 2025, it is projected to growth at a remarkably healthy CAGR of 5% over the next five years, exceeding $226bn by the end of the decade.
Yet, even in this era of growth, budgets are not infinite. In fact, the need for disciplined cost control is more critical than ever to ensure that the sector's exuberance translates into tangible, sustainable outcomes.
Therefore, at this, the start of 2025, cost management is poised to play a pivotal role in shaping the success of construction projects across the Middle East. Here are five trends that will significantly impact this domain:
Digital Transformation and Automation
Digitalisation is already revolutionising how projects are planned, managed, and executed in the region. Building Information Modelling (BIM), for instance, has seen widespread adoption, enabling stakeholders to visualise projects in their entirety before a single brick is laid.
As BIM technology evolves, the integration of artificial intelligence (AI) could soon allow teams to predict cost overruns by analysing historical data and real-time conditions. Cloud-based BIM platforms are further enhancing collaboration among architects, contractors, and project managers by providing instant updates on the cost implications of design decisions.
Beyond BIM, digital twins are steadily gaining traction, offering real-time monitoring of construction projects. These virtual replicas allow stakeholders to track performance metrics and costs, enabling timely interventions to prevent budget overruns. Machine learning is also poised to modernise budgeting, with algorithms forecasting requirements based on historical data. Automated reconciliation tools, in turn, could seamlessly track expenditures against planned budgets, reducing manual errors and saving valuable time.
Sustainability and Green Building
Equally transformative is the region's increasing focus on sustainability. Yes, incorporating green building practices often involves higher upfront costs, as seen in the use of low-carbon concrete or the installation of renewable energy systems. However, as demand for eco-friendly materials grows, economies of scale and technological advancements are starting to drive prices down.
Additionally, in hosting two of the last three COP editions, the MENA region has signaled its strong commitment to sustainability. Governments are increasingly offering incentives such as tax breaks and renewable energy subsidies to offset the initial costs of sustainable construction.
Simultaneously, investments in green certifications like LEED and BREEAM are also becoming more common. These certifications not only enhance a building's market value but also reduce operational costs, making them an attractive proposition for developers. For example, Dubai's push toward Net Zero buildings by 2050 reflects a broader regional shift towards sustainability, and cost management strategies will have to evolve to align with these goals.
Modular and Prefabricated Construction
Modular methods are rapidly coming of age in the Middle East. These techniques shift much of the construction process to controlled factory environments, significantly reducing on-site labour costs and inefficiencies. Faster project completion times also mean lower indirect costs, such as reduced site overheads and financing expenses.
However, modular construction isn't without its challenges. To fully realise its cost benefits, meticulous planning is required to manage logistics and upfront investments effectively. In fact, if the sprawling factories required to effectively build modular units hope to get the green light, teams of cost management professionals would first have to conduct comprehensive feasibility studies, evaluate long-term return on investment, and ensure alignment with both project budgets and regulatory requirements. These analyses would need to account for site selection, transportation logistics, supply chain reliability, and environmental compliance to justify the substantial initial capital outlay.
Collaborative Contracting and Risk Sharing
While in the region, contracts have traditionally been characterised by rigid, hierarchical structures, we are starting to see this rapidly change, replaced instead by collaborative contracting models. Of these, approaches such as Integrated Project Delivery (IPD) are helping align the interests of all stakeholders by linking incentives to performance metrics such as budget, schedule, and quality.
The transition, however, requires more than just updated contract terms- it demands a cultural shift. The adoption of digital tools like BIM, cloud-based project management platforms, and real-time data-sharing systems is helping to facilitate this change. Contracts are increasingly focusing on outcomes, distributing risks based on measurable results such as project milestones or quality benchmarks.
Blockchain technology could further revolutionise this space. Smart contracts offer a level of transparency and automation that reduces disputes and ensures accountability. With the UAE having launched its Blockchain Strategy as far back as 2018, there is already talent available in the market to develop the blockchain-based based solutions that could offer effective risk-sharing mechanisms, creating a more equitable framework for all parties involved.
Enhanced Focus on Lifecycle Costing
Traditionally, cost management has focused primarily on initial construction expenses. But as the function matures, there is growing recognition of the need to consider the total cost of ownership, including operating, maintenance, and end-of-life expenses. It helps of course that policies and certifications increasingly mandate Life Cycle Cost Analysis (LCCA) to ensure that projects align with sustainability and efficiency goals. Here too, BIM has a role to play as the effective implementation of LCCA relies on advanced digital tools, such as BIM and simulation software, to model and predict lifecycle performance accurately.
But software alone isn't sufficient – a mindset shift is also crucial. Developers and clients must move beyond prioritising immediate cost savings to embrace the long-term benefits of higher upfront investments.
With careful planning and strategic adoption of these trends, organisations can not only manage costs effectively, but also position themselves as leaders in one of the world's most vibrant construction markets.
Through innovation, collaboration, and a commitment to long-term value, the Middle East is set to redefine what's possible in construction. And in this transformative journey, cost management will remain at the heart of turning ambitious visions into enduring realities.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Khaleej Times
2 hours ago
- Khaleej Times
UAE: India's Titan to open 75 Tanishq, Damas stores across GCC, create 675 jobs
Titan Company, the parent firm of renowned jewellery brand Tanishq and the new majority stakeholder in Dubai-based luxury retailer Damas, plans to open up to 75 additional outlets across the Gulf Cooperation Council (GCC) over the next five years. This expansion is expected to generate approximately 675 new jobs in the region. Currently, Titan owns and operates over 100 Damas outlets and 15 Tanishq stores throughout the GCC. 'We foresee opening 40-50 more Damas stores over the next five years, with significant focus on Saudi Arabia, which is underrepresented,' said CK Venkataraman, managing director of Titan Company. "For Tanishq, we have 15 stores in the GCC and plan to scale up to 40. Until now, our focus has primarily been on the UAE, so there's a limited presence outside the Emirates. Our next targets are Kuwait, Bahrain, Qatar, and Saudi Arabia." Venkataraman emphasised the importance of understanding the unique staffing requirements in Saudi Arabia, where only nationals can be employed in retail roles. 'With Damas' local expertise, we'll be better positioned to recruit skilled staff familiar with the jewellery sector,' he noted. 'Saudi Arabia is an exciting market. Cities like Jeddah have a strong Arab consumer base, while places like Dammam are more Indian-oriented – allowing room for both Tanishq and Damas to grow.' Job creation by Titan This announcement marks Titan's first media briefing in the UAE since acquiring a 67 per cent stake in the century-old Damas brand from Mannai Corporation for Dh1 billion on July 21. The Indian conglomerate, Tata Group, owns Titan. The acquisition is expected to be finalised by January 31, 2026. Titan will also have the option to purchase the remaining 33 per cent stake after December 31, 2029. Damas currently employs just over 1,000 people. In contrast, Tanishq operates on a franchise model. 'If we open 25 new Tanishq outlets, and each employs around 15 people, that would result in about 375 jobs. Damas stores, which operate on a smaller format with 5–6 employees each, could add another 300 jobs if we open 50 more locations,' he said. This brings the total estimated job creation across both brands to 675 positions over five years. Venkataraman also confirmed that no job cuts are planned at Damas following the merger. 'We're here to grow the business. This is not a distressed acquisition. Layoffs are not part of the strategy,' he stated, adding that Damas will continue operating under its existing brand identity. 'With Titan's support, we gain access to global retail expertise and a forward-looking vision,' said Alekh Grewal, Group CEO of Mannai Corporation. 'This partnership allows us to invest in our people, innovate our offerings, and enhance customer experience across the board.'
The National
2 hours ago
- The National
How data centres could help the Gulf meet its climate targets
Data centres that power the Gulf region's burgeoning cloud and AI systems are accounting for an ever-increasing proportion of electricity consumption. If managed well, this nominal increase in the need for power generation can be transformed into a tool for the greater use of renewable energy, helping the GCC countries to realise their ambitious climate goals. Saudi Arabia, the UAE and other Gulf countries are aggressively investing in AI as they seek to maintain their competitiveness in a rapidly evolving global economy. One of the key issues that policymakers must grapple with is how to supply AI infrastructure with the power it needs to operate. Despite the recency of these novel technologies, they already account for almost 2 per cent of global electricity consumption; this figure is set to grow exponentially over the coming decades as AI is integrated into every walk of life. A parallel and ostensibly independent challenge that governments are contending with is the need to decrease carbon emissions as part of the global fight against climate change. The Gulf states have committed to realising carbon neutrality within the next four decades, driving heavy investments in renewable energies such as solar and wind. They also see this as an opportunity to develop a comparative advantage in the probable successor to fossil fuels, as reflected in Abu Dhabi's Masdar becoming a global supplier of cutting-edge clean energies. Although the technological advancements in renewable energy have been breath-taking, two key challenges persist. The first is intermittent generation combined with a lack of battery infrastructure. The Sun does not shine all day, nor does the wind blow throughout it, and so electricity demand is invariably out of sync with the unpredictable supply profile that these technologies provide. This leads to significant waste and to the need to invest in backup, fossil fuel-powered generators to avoid supply disruptions. The second problem is that renewable energies cause voltage and frequency fluctuations, which in turn lead to instability in the electricity grid. The resulting blackouts can be damaging economically, and also constitute a national security threat given the power-intensive and integrated nature of most modern defence systems. As a result of these two difficulties, renewables' installed capacity has not kept pace with the advancement in generation technology. However, a new paper published by Massachusetts Institute of Technology economists Christopher Knittel, Juan Ramon Senga and Shen Wang offers policymakers a way of killing two birds with one stone. The scholars begin by noting that one of the key advantages of data centres is the inherent flexibility of their electricity demand profile. While some baseline processes must occur on a continuous basis throughout the day, a lot of the computationally intensive – and hence electricity-hungry – operations can easily be delayed by a few hours or more without disrupting overall performance. An example would be a large language model such as ChatGPT reading and understanding a voluminous new tranche of material, such as all of the manuscripts in a collection that has recently been digitised. As more renewable energy is integrated into the generation profile, AI data centres can be instructed to synchronise their flexible operations – and hence their electricity demand – with the renewable energy output As long as AI data centres continue to account for a small proportion of electricity consumption, this flexibility will remain inconsequential. However, if – as expected – they transition into being among the biggest sources of energy demand, the flexibility can be exploited to mitigate the intermittency and grid instability problems caused by renewable energy. More specifically, as more renewable energy is integrated into the generation profile, AI data centres can be instructed to synchronise their flexible operations – and hence their electricity demand – with the renewable energy output. This diminishes the likelihood of unconsumed electricity being wasted and decreases the need to invest in expensive battery technologies. Moreover, the voltage and frequency surges that destabilise the grid are likely to decline in incidence. As a result, renewable energies become much more reliable components of the energy mix, and governments can more confidently invest in them without fearing the fragility that has so far limited the transition away from fossil fuels. This solution is by no means a silver bullet. A key weakness is that it depends on a large growth in electricity demand occurring and being matched by a comparable expansion in electricity generation as a prerequisite to shifting the balance towards renewables. However, this challenge will almost certainly be mitigated by complementary technological advancements in other areas, such as battery technology and smart grid management. As a result, Gulf countries can exploit this mechanism as part of a multi-pronged approach to greening their energy mix. In short, the rise of AI and the accompanying expansion of data centres need not be a burden on the GCC's climate ambitions. On the contrary, as policymakers embrace a strategic view of electricity demand management, flexible data centres can become powerful enablers of a greener grid. By aligning the region's digital and environmental transformations, the Gulf can turn a looming challenge into a unique opportunity – advancing both its technological leadership and its commitment to climate responsibility.
Zawya
5 hours ago
- Zawya
Tanishq with Damas to redefine GCC Jewellery retail market
Dubai: Titan Company Limited, part of the Tata Group and parent company of Tanishq, is prepared to lead the retail jewellery market in the GCC with its recent acquisition of a 67 percent stake in Damas Jewellery, the century-old Dubai-headquartered luxury jewellery retailer. Through this acquisition, Titan Company Limited is making a bold move to deepen its footprint in the Gulf region. In a statement, Titan emphasised that this partnership brings together two of the most trusted names in jewellery retail, Tanishq and Damas, under one umbrella, marking a pivotal moment in the company's international expansion strategy and setting the stage for a redefined jewellery experience in the GCC's organised retail landscape. 'This is more than just a transaction, it's the coming together of two iconic names built on trust, design, and a deep understanding of what jewellery means to people,' This acquisition significantly strengthens Tanishq's regional footprint and unlocks new potential in one of the world's fastest-growing jewellery markets. Yet beyond scale, it's the consumer-facing transformation that makes this move remarkable," said Mr. CK Venkataraman, Managing Director of Titan Company Limited.' Titan aims to serve the two largest customer groups in the region - Indians (and other South Asians) through Tanishq and the Arabs through Damas. This dual-brand presence is designed to offer customers the best of jewellery designs, fantastic shopping experience with the trust and assurance of Tata's Titan. The acquisition was executed earlier through Titan's wholly owned subsidiary, Titan Holdings International FZCO, with 146 Damas stores across the UAE, Qatar, Kuwait, Bahrain, and Oman, it firmly positions Titan at the forefront in the GCC jewellery market. 'While Damas will continue to operate under its brand identity, the collaboration will introduce enhanced collections, operational synergies, and a seamless retail experience for our consumers', he added. Mr. Alekh Grewal. Group Chief Executive Officer of Mannai Corporation, 'Damas has always stood for elegance, tradition, and craftsmanship. With Titan's backing, we gain access to global retail expertise and a future-ready vision. This partnership will allow us to invest further in our people, innovate across our portfolio, and serve our customers with even greater depth and distinction.' 'This acquisition is a bold step in our global growth journey. It enables us to expand Tanishq's footprint across the Gulf and introduce our expertise in jewellery retail to a broader audience. With Damas, we see a powerful opportunity to serve both the large Indian and South Asian diaspora, as well as the established Arab and global clientele that Damas has long catered to. Together, we aim to set new benchmarks in quality, trust, and customer experience across the region," Mr. Venkataraman concluded. This move underscores Tanishq by Titan's unwavering commitment to the Middle East and its ambition to shape the region's jewellery narrative with a blend of heritage, innovation, and trust.
