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In a special report published today, Fitch says the outlook for construction in general in the GCC region is more positive than in western Europe. Supportive factors - such as strong GDP growth, rising income, healthy liquidity, rapid population expansion and increasing mortgage availability - continue to underpin robust growth in Abu Dhabi, Dubai and Doha.
"However, many challenges have begun to surface, mainly the prospect of oversupply - if current delivery plans are met - and the risk of being unable to stimulate demand in view of massive development projects in the pipeline,"
says Bashar Al Natoor, Director in Fitch's Corporate team.
"Nevertheless, there is a high probability of late delivery, and even project cancellation, due to logistical constraints, which could ultimately result in a better match between supply and demand," he added.
Fitch expects ratings to remain stable for Dubai Holding Commercial Operations Group LLC (DHCOG, 'AA-' (AA minus)/Stable) and Gulf General Investment Company P.S.C. (GGICO, 'BBB'/Stable). The agency's assessment of Dubai's creditworthiness, and the sovereign linkage, support the individual credit profile of DHCOG.
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Posted by Siba Sami Ammari
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