The recession hit the Dubai interiors industry quite badly, but a thriving sector of refurbishment and fit-out companies has emerged from the ashes. The cost of interiors accounts for up to 30% for GCC projects, and with the UAE remaining the largest market in the sector, Dubai is set to grow in the next year.
A report by Ventures Middle East reveals UAE’s increase in spending compliments the expected total interior design and fit-out spending of USD $8.6 billion for the GCC, reflecting a 69% increase from 2010’s recorded spending. The UAE leads GCC countries with a market share of 54% and is followed by Saudi Arabia with 28%.
The increased spending demonstrates the growing demand for interior design products and services across major infrastructure and construction projects in the region. The increase in spending will include key products like walling, doors, cladding, canopy and skylights, signage, lighting and furniture across major projects underway or already in completion stages in the UAE. Aside from the surge in spending, the region will see an increase in interior design services, with over USD $14.6 billion in new contracts.
In addition, between 2010 and 2012, 19 million m2 of office space will have become available for interiors and fit-outs in the UAE, according to figures by Ventures Middle East.
Worldwide, the retail industry is emerging from a difficult time, according to Amyas Wade, associate director, Kinnersley Kent Design. Wade, who runs the firm’s Dubai studio, said it has witnessed an increase in refurbishments whilst new commissions are decreasing.
“As a result, developers, mall owners and retailers are increasingly looking to refurbish and revamp their existing sites or parts thereof, instead of investing in new constructions.”
A positive sign can be seen with Depa interior contracting announcing its trading results for the third quarter, which ended September 30, 2011.Mohannad Sweid, CEO, said Depa has seen a significant pick-up in business with projects which had been delayed, especially in the MENA region, now being signed into a backlog.
The company signed AED 1.6 billion of new contracts boosting its backlog by 70% to a record high of AED 3.9 billion from AED 2.3 billion, as of June 30, 2011.
Whilst this stream of business vindicates Depa’s diversification strategy in recent years, it will take time to flow through to revenue and profits. This means that its 2011 financials will remain close to forecast, which was revised at the half year stage, with increased income coming through in 2012’s numbers.
The AED 929 million contract – Depa’s largest contract ever signed – is for the complete fit-out of 27 lounges at Doha’s new international airport.
Lindner Depa, the company’s joint-venture, which specialises in infrastructure projects, will undertake the one year contract with immediate effect.
“We are encouraged by the amount and diversity of new business signed during the quarter, a direct reward for pursuing our core strategy of diversification combined with more stringent project selection,” said Sweid.
“Despite European economic concerns and political uncertainty across many Arab countries, government spending, especially in the Gulf, continues to drive our backlog to its highest level ever and favourably positions the company for the coming months giving us strong visibility on future revenue.”
The company has also entered into the Qatar hospitality market through a major contract for both the interior fit-out and supply of furniture, fixtures and equipment (FF&E) of all 324 guest rooms and public areas of the Ramada Plaza, in Doha.
The contract is worth AED 52 million and is set to be completed by October 2012. With the fit-out market playing such an important part in the region and emerging as a thriving sector of the industry, Commercial Interior Design Middle East speaks to the fit-out companies you should know.