The UAE is in a constant state of development and change. This can make it difficult for those outside the industry to understand who does the actual building. Potential buyers, both UAE-based and international, need to look past brochures when assessing the risk of projects, especially high-rise developments. This includes understanding the key players involved in the project from a structural and civil engineering perspective.

Recognizing the intrinsic relationship between building developers in Dubai and contractors can help buyers understand a project's risk and the potential long-term value of their investment.

1. Contractor vs Developer Dubai: What is the Difference?

In general, the development of a project in Dubai happens when a contract is awarded to a contracting company by a developer.

  • The Developer: Plays the role of the land consolidator. This involves subdividing and arranging the sale of the land, securing government approvals, and setting up escrow accounts with the local real estate regulatory agency. The developer manages the project's marketing and unit sales.
  • The Contractor: Upon award of the contract by the developer, the contracting company becomes the civil engineer for the project. The contracting company then hires subcontractors for the MEP work and other services, and manages project site safety.

2. Construction Quality by Builder and Developer Models

The builder and developer can play an integral role in ensuring the long-term value of a real estate project. Variability of both build quality and developer oversight can impact the investment landscape of a region.

The Fully Integrated (In-House) Construction Model

Few developers fully integrate their businesses to construct the properties they develop. For example,  manages the full integration (design, build, and development) of properties. Using an integrated construction model enables developers to maintain control over the quality of construction works, resulting in a better relationship with tenants and reduced maintenance costs.

The Third-Party Contracting Model

Most developers award construction contracts to external (tier-1) contractors. In such a model, a developer’s ability to enforce adequate construction quality standards is of great importance. Generally, international first-tier contractors impose and enforce the highest construction standards. However, a contractor working under tight margins may use inferior materials, bringing about adverse outcomes in construction works.

3. Assessing a Builder Delivery Record

An institutional investor evaluates a builder’s construction works and compares them with the representations made by the developer to determine the level of risk associated with an off-plan development. Evaluating a builder delivery record is the most important consideration when assessing a development’s potential to be completed as represented.

Evaluation MetricDeveloper AssessmentBuilder/Contractor AssessmentHistorical TimelinesPast project hand-over delays vs. promised completion dates.Speed of concrete frame completion and site progress reliability.Financial SecurityEscrow account compliance and sovereign or corporate backing.Financial liquidity to prevent supply chain disruptions or labor shortages.Post-Handover MaintenanceLong-term community management and service fee structure.Warranty response rates for structural defect liability periods.

4. The Role of Tier-1 Dubai Builders

International first-tier contractors partner and work with leading architectural and engineering firms to give shape and form to some of the most complex constructions in the built environment.

Leading Dubai builders in civil engineering, like Arabtec, CSCEC, Al Habtoor Group, and Multiplex, have the experience to manage large-scale construction projects and build diverse and sophisticated structures. Because they specialize in the use of heavy machinery and engineering to complete large construction projects, they are frequently contracted to build large residential towers and other large structures, including coastal structures and integrated community projects.

5. Quality Control and Site Inspections

Buyers’ capital is at risk if the construction process is not properly controlled and managed. To protect buyer capital, stringent controls are enforced across various stages of construction:

  • Dubai Municipality Audits: Inspection of construction sites by Dubai Municipality is compulsory at critical stages, including foundation pouring, floor slab placement, and building facade installation.
  • Third-Party Consultant Audits: At various stages of construction, an engineering consultant employed by the developer is mandated by law to audit the construction process before releasing funds from the escrow account controlled by RERA.
  • Defect Liability Period: By law, construction firms must remedy all defects found in building fittings and equipment within a period not exceeding one year from completion. Furthermore, the construction firm is obligated to warrant the building against structural failure for a period of at least 10 years.

Conclusion: Evaluating Dubai Builders and Developers

In summary, it is important that the construction firms appointed by developers be thoroughly reviewed to assess their ability to safely and properly construct buildings that endure over time. Researching a construction firm’s handover history and reviewing RERA’s records is vital to safeguarding your equity interest when partnering with Dubai builders and developers.