The UAE Fit-out Market

Shyam Visavadia
The UAE fit-out sector is forecast to reach USD973.4m (AED 3.4bn) by 2022. Despite recent challenges in the market due to fiscal pressure from falling oil prices, there doesn’t seem to be any slowdown in project awards, with investment rising by USD2bn from 2016.

Current Market Conditions

The commercial sector is diversifying with more emphasis on offices, hospitals, hospitality & leisure, and retail across the GCC. The UAE is leading the way and is expected to register 15 to 20 per cent growth. Hospitality & leisure will remain a key growth area, particularly in the run up to Expo 2020. There is increased focus on refurbishments as clients look at reinventing space rather than building new structures. In 2017, there were several awards for hotel refurbishment projects to cater for the growing demand from both international and regional tourism.

Fit-out Projects

A fit-out aims to make an internal space suitable for occupation. Landlords provide tenants with different levels of fit-out typically categorised as:

Shell & Core - this is the bare bones of a building’s interior space and is often how the building is provided by the developers. This fit-out generally comprises only the structure, cladding, base plant, completed common areas and external works.

Category A - a habitable space, but a blank canvas. Usually includes basic MEP works, raised floors and suspended ceilings, and other technical surface finishes.

Category B – this follows on from a Category A fit-out, to provide a space that the occupier can simply move into and start working. Includes installation of all bespoke design elements based on the tenant’s requirements, e.g. installation of IT equipment, soft and hard furnishing, lighting, internal woodworks and partitions etc.

UAE Fit-out Challenges

The end-to-end fit-out process is a challenging one. Issues include lack of clarity on design and budget, finding a suitable procurement route, identifying a competent contractor to deliver the brief, lack of understanding of local and statutory approvals, and the complexity of overall management of programme, cost and quality objectives.

Projects typically fail when a pragmatic and systematic approach has not been adopted - this is often due to time constraints.

Projects typically fail when a pragmatic and systematic approach has not been adopted - this is often due to time constraints. Clients and stakeholders may not have agreed on clear objectives, thus exposing themselves to risk during the delivery stage. Important aspects may have been overlooked, including third party, landlord and authority approvals. Project forecasting and budgets are frequently inaccurate and do not include all necessary costs. There may be an emphasis on the capital cost, rather than the operational costs which may increase during the life of the asset. All the above advertently impact both programme and cost objectives.

Project Management of Fit-out Projects

With budgetary constraints and timescale pressures, clients may overlook the opportunity to appoint an external project manager to help deliver a project. However, a competent project manager leads the client through the project journey, ensuring that the right level of information is available at each stage, and enabling informed decisions to be made. The project manager acts as a trusted advisor, providing expert independent advice throughout the process.

The project manager acts as a trusted advisor, providing expert independent advice throughout the process.

Faithful+Gould’s project management team creates value by formulating a clear strategy that achieves our client’s objectives. This includes implementation of a project execution plan, clearly demonstrating the end-to-end process of how the project will be delivered. A clear sign-off process is executed through stage-gate review procedure. Dissemination of weekly flash reports ensures wider stakeholders remain an integral part of the project. The procurement process is expertly managed to enable the best contractor to be sourced, interviewed and awarded. Cost validation and value engineering exercises are undertaken where necessary, to align costs and to realise additional savings. Our team subsequently provides post-contract risk management, variation control and overall management of the project during construction.

With over 20 years in the region, Faithful+Gould is a leading project and programme management consultancy with a strong track record of delivering successful fit-outs. We have a vast project portfolio including; King’s College Hospital Clinics (Jumeirah, Dubai) Prime Minister's Office (Emirates Towers), Cleveland Clinic (Abu Dhabi), Dai Pai Dong (Rosewood Abu Dhabi), Executive Council (Emirates Towers), Abu Dhabi Tourism Authority Head Office, Dubai Airport Public Areas, Tiffany Regional roll-out, Chevron & Roche Pharmaceuticals (Riyadh & Dubai) and multiple Clifford Chance offices.

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