房地产视角：第13期：情况不妙

Disclosures & DisclaimerThis report must be read with the disclosures and the analystcertifications inthe Disclosure appendix, and with the Disclaimer, which forms part of it.Contract awards across theGCC down c50%Marketshavebeen wary since2H24 that“not oils well”with regard to contract awards,particularly in Saudi Arabia, the country of super-sized giga-projects. The concern of aslowdown is borne out in the latest MEEDProjectsdata, with y-t-d contract awardsacross theGulf Cooperation Council(GCC) countriesdown c50%, if annualised. Thisconcern is underscoredif we lookat the relationship between the average price ofcrude oil per barrel, and the value of contract awards made across the GCC.By sector, it has been the industrial sector, followed by construction, transport,andpower that have seen the biggest decreasesin contract awardsy-t-d. However, ofthese the construction sector has been by far the largest in terms of contractsawarded based on absolute value. In Saudi in particular, it is the oil sector followedby power, industrial,and transport that have seen the biggest declines y-t-d.Weattended MEED’s“Saudi Giga Projects 2025”Conference in Riyadh last month(12-14May),andthe message from the giga-project operatives presenting on theirprogress was resoundingly clear–the next phase of ground-up construction is nowonly 12to 24monthsaway, andthese projects areopen to bids for what will be anaggregate annual contract pool of cUSD250bn per annum through to 2030.To date, it’s been about establishing the infrastructure for these super-sized giga-projects, and the evidence of progress provided at the conference was impressive, ifnot remarkable. With what has had its fair share of international cynicism, the extentof work put in to take the projects to their current stage was unquestionable.However,we see a newchallengeforthe next phase of ground-up construction–securing international investment at a scale that eclipses that of the infrastructurephase, andin order to do so, it needs toswing the pendulum away from a biastowards cynicism to one of belief, andprovidedemonstrable returns. As with anydevelopment, once it can be visualised it becomes easier to sell.However, that said the y-t-d pattern for giga-project contract awards is not dissimilarto the broader contract market, with a c60% y-t-d decline once annualised,accordingtoMEED Projectsdata.Hence, as the projects transition from the infrastructurephase to ground-up construction they enter a critical phase where internationalfunding, and/or monetisation is likely to bekey.This is our latest report on the Future Cities theme. If you want to subscribe toany of our nine big themes,click here.Real Estate Perspectives#13:Not oils well UAE branchView HSBC Global Research at:https://www.research.hsbc.comRegisterStephen Bramley-Jackson*Global Head of Real Estate ResearchHSBC Bank Middle East Ltd, UAE branchstephen.bramley-jackson@hsbc.com+971 4 423 6903Alok Baid*AssociateBangaloreEquitiesMENA Not oils wellA clear relationship between oil price and contract awardsMarketshavebeen wary since 2H24 that“not oils well”with regard to contract awards, and thisconcern has been heightened y-t-damid the continued decline inoil prices.Oil price changeSource: LSEG DatastreamThis concern is underscoredif we look at the relationship between the average price of crude oilper barrel, and the value of contract awards made across the GCC. It follows that should oilpricescontinue to decline, it is likely that thevalueof contract awards (which are already downsignificantly y-t-d, vs 2024) will similarly fall.Value of GCC contract awards vs annual averagecrude oil pricesSource: MEED ProjectsHence, there has been a significant slowdown in contract awards y-t-d, which according tothelatest MEED data,is downc50%across the GCC, if annualised.-35.0%-30.0%-25.0%-20.0%-15.0%-10.0%-5.0%0.0%5.0%10.0%Nov-2498.9752.32050,000100,000150,000200,000250,000300,00020142015Value of awarded contracts (USDm) Dec-24Jan-25Feb-25Mar-25Oil Price Change (y-o-y)43.6454.2571.3464.3041.9670.86201620172018201920202021Average crude oil price (USD pb) RH axis Apr-25May-25100.9382.4980.530.0020.0040.0060.0080.00100.00120.00202220232024 2It follows, that should the oilprice continue to decline, sotoo will contract awards 3All GCC countries have economic initiatives that entail sizable investment programmesAll of the GCC countries are busy with material initiatives to diversify their economies andfuture-proof the built environment and infrastructure through smart city development, all of whichentail sizable investment programmes.Smartcitiesinitiatives in the GCCGCC Member StateNational strategyNational planInitiatives & programmesBahrainEconomic Vision 2030National Development StrategyNational eGovernment StrategyOmanVision 2020; Vision 2040National Programme for EnhancingEconomic Diversification (Tanfeedh)eOmanQatarNational Vision 2030National Development StrategyQatar e-Government 2020; LusailSmart City VisionKuwaitNe