Competitive construction costs are becoming one of the UAE’s biggest advantages as the country continues to attract large-scale investment and ambitious development projects.
According to a report, both Dubai and Abu Dhabi rank among the world’s most cost competitive construction markets. Dubai placed 68th and Abu Dhabi 69th out of 100 cities, with both receiving an index score of 99.
The report compares construction costs in 100 cities worldwide, using data from 20 building types alongside an assessment of local market conditions.
Geneva was ranked as the world’s most expensive construction market, followed by London, Zurich, Munich, Copenhagen, New York City, San Francisco, Dublin, Bristol and Philadelphia.
While construction costs continue to rise globally, the UAE market has remained relatively stable. Arcadis forecasts construction cost inflation of between 3.5% and 4.5% for Abu Dhabi through the end of 2026. This compares favourably with markets such as Tokyo and Seattle, where construction cost inflation is expected to reach between 5% and 6%.
The UAE also leads the GCC in confirmed construction demand. According to the Abu Dhabi Chamber of Commerce and Industry, the country has around 700 confirmed construction projects with a combined value of approximately $138 billion.
This strong pipeline reflects continued investment across residential, commercial, industrial and infrastructure developments, supported by both government initiatives and private sector activity.
The growing demand for artificial intelligence infrastructure is creating new opportunities for the UAE’s construction sector.
In May 2025, Abu Dhabi announced the 5GW UAE-US AI Campus, set to become the world’s largest AI campus outside the United States. The project will be developed in phases, beginning with Stargate UAE, a 1GW AI computing cluster expected to bring its first 200MW online in 2026.
Developed by G42 alongside OpenAI, Oracle, Nvidia, Cisco and SoftBank, the campus will play a key role in supporting the UAE’s ambition to become a global leader in artificial intelligence.
At the same time, Khazna Data Centres continues to expand its AI-ready infrastructure both within the UAE and internationally, helping to meet rising demand for advanced digital facilities.
Looking Ahead
As more capital flows towards markets that offer certainty, efficiency and long-term growth, the country’s construction sector is well placed to support the next generation of transformative projects.
At One Investments, we see developments like this as a strong reminder of the value of forward planning. We prioritise understanding our investors objectives and identifying opportunities that match their vision, ensuring a careful balance between potential growth and security.
