In a bid to turbo-charge a property boom and maximize cash flow, Dubai developers are taking the building process into their own hands. A growing number of major UAE developers, including Emaar Properties, Samana Developers, Ellington, and Azizi, are setting up in-house contracting firms. This move aims to increase control over construction timelines, costs, and quality standards, ultimately securing a larger share of profits.
Emaar Properties, which developed the Burj Khalifa, has established Rukn Mirage under its subsidiary Mirage. Other developers, such as Arada, have also acquired contractors to integrate into their UAE operations. This trend comes as Dubai’s real estate surges, with prices up 70% over four years to December 2024 and a government plan to double the population to 7.8 million by 2040.
Developers say owning the full pipeline provides greater certainty in an unpredictable market and aligns with the UAE’s push for self-reliance in strategic sectors. However, bringing construction in-house may also carry risks, such as splitting focus and idle construction capacity in a downturn. Gordon Rodger, founder and managing partner at construction consultancy Stonehaven, cautions that developers could be left with significant idle resources if they cannot sell real estate.
The shift may lead to independent contractors seeking more work outside real estate in sectors such as government infrastructure, manufacturing, or oil and gas. As Dubai’s property market continues to boom, developers are looking to maximize profits and minimize risks. With billions of dirhams in buyer payments remaining in escrow until handover, developers are keen to complete projects on time to unlock cash needed for shareholder distributions and expansion.
Image Courtesy: Kaizen Asset Managment Services
