photo credit: danibelle2906
A number of real estate development projects across the gulf area face delays and smaller profits due to a management skills gap, a specialist firm has warned.
ESI International said the prices of raw materials are a concern, and were combining with a lack of trained project managers.
The management consultancy even warned some firms could face negative profits because of the crisis.
Raed Haddad is senior vice president for corporate programmes at ESI International. He said:
“Developers are already being squeezed by higher concrete and steel prices, but with escalating salaries on top, many projects are already being delayed with profit margins eroding considerably.”
He added ETA Star Group recently revealed its Dubai Lifestyle City project, Dubailand, had rocketed from a cost of $2.4 billion to $4 billion.
He also said much of this increase was due to consultancy fees for the project, which had soared 40 to 70 per cent.
The company said more expertise was needed in the sector, which would lead to more competition and lower rates.
Arabian Business recently reported the value of Gulf projects under construction had gone past the $2 trillion mark.
The site has previously noted investment in the area’s major business sectors went up in value by 40 per cent from March 2007 to March 2008, according to the Middle East Economic Digest.
Related posts:
