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Land of Opportunity

Land of Opportunity

Aedas, Arab Engineering Bureau, Construction, Hilson Moran, Qatar

Any Middle East-based company that is involved in design or construction will probably have Qatar on its radar.

But what is the true condition of the market and what are the best ways for interested firms to make inroads in the country? To answer these questions, Middle East Architect caught up with three industry professionals that are active in Qatar: Ibrahim Mohammed Al Jaidah, principal of Doha-based firm Arab Engineering Bureau (AEB); Peter deVido, Qatar director, Aedas; and Tony Morris, director of UK-based engineering firm Hilson Moran.

How strong is the construction market in Qatar?
IMAJ: Qatar is very wealthy and strong and it will spend billions on construction projects. Contractors and designers have not yet felt the full impact. AEB will have to double its size to deliver all of our projects.

PDV: The market in Qatar is very strong. It is focusing on infrastructure at the moment and less on other developments. Qatar has big aspirations – if it wasn’t hosting a World Cup, then maybe it would target something like Formula One. In 2006 it hosted the Asian Games. The World Cup is one of several things to put Qatar on the map.

The potential of the market in the future is tremendous. We cannot ignore the opportunities that will arise from the World Cup, but the strength of the market and the opportunities in the future would still exist without the World Cup win.

In addition we must not forget that the country is very stable politically and economically. These are two very important factors, especially considering the unrest in other countries in the region. Like Abu Dhabi, Qatar has a 2030 development plan that considers the society and future growth.

Is there a big demand for internatioal consultancies?
PDV: Without a doubt, Qatar needs international expertise to achieve its goals. The rail network alone will require substantial international influence.

There will be so many opportunities over the next 10 years and there has to be an influx of international and professional skills. But Qatar will demand that these professionals have the right mindset and are respectful towards the local culture and heritage. Opportunities for local firms will be plentiful.

IMAJ: Local firms on the ground cannot cope with the amount of work that is needed. International firms are coming in and there are tons of opportunities for practices of all sizes. At the moment, there are only a handful of local firms that are capable of making an impact. This is a wonderful opportunity for local firms to emerge and develop.

Do Qatari developers have an appetite for good design?
IMAJ: Yes, absolutely. Qatar is looking at quality design and bringing in big international names, such as IM Pei and Jean Nouvel. The private sector is also looking at smaller firms that offer unique design.

PDV: There is a very strong appetite for good design, coming from both large and small developers. Qatari clients know that markets are slow in other areas of the Middle East and they are taking the opportunity to get the best service that is currently available.

Clients place a heavy emphasis on design quality. This is because most of the development in Qatar is not speculative. Obviously, projects must be commercially feasible, but return on investment is not the only priority – there is a focus on long-term economic and social viability.

Qatar is not just building iconic towers – there’s a lot of depth to development.

Which sectors will see the most activity?
TM: For the World Cup, hotels are needed for visitors and athletes and workers also require accommodation. Infrastructure is vital – this includes water and power as well as transport. The retail sector will also profit from the influx of visitors. I believe that all sectors will benefit from the event.

PDV: The rail network will involve a lot of contracts, as will the sport venues, stadia, fan zones and associated support facilities, such as city hotels.

Aside from the World Cup, the population is expected to triple in 10 years and this will require an influx of expatriates and an increase in housing supply.

Qatar is definitely lacking in resort facilities outside of Doha, along the lines of resorts in Fujairah, UAE. As the population grows there will be a need for theme parks and water parks to keep the local population entertained. Office supply is low priority as there is currently enough.

How is your company dealing with work in Qatar?
IMAJ: AEB is working on many projects and we will have to double our size to deliver everything. Around 20-25% of our work comes from assisting international firms on mega jobs.

TM: Hilson Moran is in the process of setting up an office in Qatar. We’re an engineering firm and, at the moment, the bids in Qatar are coming through architects. Therefore we are aligning ourselves with architecture firms. When we get established we can return the favour to architects.

PDV: Aedas is working on Dohalive, a mixed-use development in the centre of Doha, as well as a World Cup stadium in the capital and Doha Marina, which contains a hotel, spa, restaurants, and retail.

What is the best approach for architecture and engineering firms to get work in Qatar?
TM: If a business wants to work in Qatar long-term, it’s best to have an office there. This helps to understand the region and develop contacts. Unless you are there, you can’t get involved and contribute to the industry. We are looking to participate in seminars with bodies such as the Qatar Green Building Council.

We have a local office with a Qatari partner which puts us in a good position. Companies can work independently, but having a local partner offers a different dynamic. They understand the culture and already have a base.

PDV: Firms that want business here should make a commitment to Qatar. ‘Suitcase architects’ that fly in and fly out, do not work. Companies that are serious should set up an office but they should be prepared for things to take time. The first steps should be developing relationships and understanding the industry, before jumping in and trying to win work.

What kind of business relatioships are critical in Qatar?
TM: You need solid relationships with developers as well as the municipality and utilities. It’s good to have a consistent face in front of them. Communication is key.

PDV: In every country in the world, contacts and relationships are keys that open doors. It’s no different in Qatar and it’s very important to establish relationships with the municipality and planning authorities, as well as other architectural practices. There is competition between firms but it is friendly – they work together.

International firms also need the help of local practices. Qatar is a small community so it’s important to establish relationships with as many people as possible, not just potential clients. Factors like track record, experience and local presence are all important, but relationships are key.

How does the business environment compare with other markets?
TM: It’s very similar to the UAE but there are sometimes extra contractual conditions such as liquidated damages and performance bonds. This may stem from the oil and gas industry.

We are seeing these conditions more often than not, and they can present difficulties for architects. I don’t know if they will go away but they may evolve as more international consultants work in the country.

IMAJ: Those that haven’t worked in the region before may find it difficult, but those coming from Dubai will see the same kind of mentality in Qatar. Clients are getting very demanding and want a specialist in every field.

TM: Like other Middle East markets, the design and construction stages are sometimes split into separate contracts, although this is changing a little now.

The bidding process is very similar to other Middle East markets but quite different from the UK and Europe where companies usually bid directly with the client.

Here, you bid as part of a consortium – clients appoint one lead consultant to construct a team. This means it’s very important to forge relationships with other construction consultants.

PDV: You can’t compare this environment to others in the GCC. We often hear of comparisons of Doha with Dubai and Qatar with Saudi Arabia.

Arabic culture prevails in the Gulf, but from country to country the people are different, the culture is different, the aspirations are different and the developing framework of the planning department is different. Only once you start to understand how and why it doesn’t compare is when you start to become successful.

Qatar is now making history – the way the construction industry functions is very different from other parts of the world. The predominant driving factors are execution, quality and sustainability, not just cost.

In other GCC markets, cost has been the main factor, especially over the past two to three years. The majority of Qatari clients are looking for partners to find innovative solutions to challenges that have not existed anywhere else in the world in the past.

It is important to change from the traditional mentality where a client wants a consultant to sign a lengthy contract with penalty clauses.

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