QATAR and the UAE are among the top five most attractive markets for infrastructure investment in the world, according to a new report.
The second Arcadis Global Infrastructure Investment Index said the Middle East is the most dynamic infrastructure investment market for investors.
Singapore topped the index, while Qatar came in second. The UAE was placed third, Canada fourth and Sweden fifth on the list. Saudi Arabia took the 12th spot.
The Global Infrastructure Investment Index ranks the world’s 41 most dynamic countries with the greatest potential for growth and investment in their economic infrastructure.
Economic infrastructure consists of the infrastructure that makes business activity possible such as transportation, communication, distribution and energy assets.
The report said Qatar, the UAE and Saudi Arabia were on the top third of the index due to the countries’ strong business environment, healthy pipeline of development work and growing economies.
“The Middle East has some of the highest investment profiles of anywhere in the globe with average growth in the construction industry reaching double digits. Good infrastructure is critical for the long-term economic development of a country, and the region is currently in a strong position in this regard,” said Tim Risbridger, partner and head of infrastructure – Middle East at EC Harris, an Arcadis company.
“National vision strategies are driving a phenomenal peak spend in these key markets over the next four to five years, increasing investment opportunities for the private sector. Currently, almost half of the investment planned across the region’s major cities relate to transportation.”
The study looked at various issues including the ease of doing business in each market, tax rates, GDP (gross domestic product) per capita, government policy, the quality of the existing infrastructure and the availability of debt finance. Combining all of these factors provided a strong overview of the risk profile for each market and how attractive each one is likely to be to potential investors.
The report also underlined the key risk will be inflation in construction resources from manpower and specialist skills to construction commodities.
Despite the potential for rising inflation, the Gulf countries’ strong credit ratings and enviable taxation regimes will continue to appeal to investors, it said.