UAE Construction Market Drives Economy With $772B Pipeline Amid Supply Constraints

The UAE's real estate and construction markets are demonstrating strong resilience and growth in 2025, supported by robust economic performance, rising foreign investment, and government initiatives. Despite supply constraints, Dubai and Abu Dhabi office markets are experiencing high occupancy and rent increases, driven by demand in key freezone areas and strategic economic hubs like ADGM. The construction sector is optimistic, with 71% of industry professionals noting a warming market, particularly in real estate, tourism, infrastructure, and transport projects, bolstered by a $772 billion project pipeline and significant contract awards surpassing regional competitors. Growth is underpinned by diversified economic drivers including increased oil output, tourism, finance, and real estate, with the UAE poised to achieve an overall economic growth rate of approximately 4.8 to 4.9 percent in 2025. Sustainability and digitalization are becoming central to new projects, with strong commitments towards net zero targets and innovation in delivery methods despite challenges like rising costs and talent shortages. Furthermore, the Northern Emirates and transport infrastructure sectors are expected to lead future growth, with major projects such as the hyperloop link and AI-driven urban developments signaling continued momentum through 2029.