GCC projects spent $7.2bn on interiors and fit-outs in 2012 and expects spends to increase by more than a quarter (28 per cent) to $9.2bn in 2013 according to a report.
The report included an analysis on the four pillars of the real estate sector – commercial, hospitality, residential and retail – and stated that that interior spends now account for 10 to 20 per cent of total costs of GCC projects.
The Saudi demand for interiors and fit outs surpassed the UAE's in the last quarter of 2012 and now has a share of 38 per cent on the back of heavy government spending nudging ahead of the UAE's 36 per cent. Kuwait and Qatar each have a market share of 16 per cent while Oman doubled spend to four per cent. Bahrain showed a decline in interiors and fit out spends with a negative growth rate of 10 per cent.
"As demand for interiors and fit outs mirrors project completions, refurbishments and tighter budgets were the trend during 2011 and 2012. Ideas such as better space management, flexibility and environmental sustainability in design and open plan layouts gained ground. The GCC interiors and fit outs market is now moving towards a more personality driven design trend as the market is coming back," said the report.
"The other commercial trend is that global suppliers are increasing their presence in the GCC as clients here spent more on interiors and fit outs than those in Europe and Asia. This remains true even as average spends on interiors and fit outs have dropped from about 30 per cent in 2011 to between 10 and 20 per cent at present."
As of March 2013, the residential sector was the largest spender on interiors and fit outs in the GCC with spends estimated at $3.3bn or 41 per cent of the market. UAE is expected to continue to spend most on residential interiors and fit outs at $1.53bn in 2013 followed by Saudi Arabia with $1.13bn and Qatar with $300m.
The expanding supply of commercial real estate in the GCC provided opportunities of $1.15bn worth of interiors development in 2012 which is likely to grow to $1.43bn in 2013. The UAE was the largest commercial interiors and fit outs market with spends of $504m in 2012 but Saudi Arabia will surpass its $498m spend in 2013 with $563m. Kuwait spends are expected to jump to $135m in 2013 from $103m in 2012. Oman and Bahrain, though smaller, with 2013 interiors and fit outs spends expected to be $46m and $30m respectively, represent fast growth markets.
The hospitality sector, at 19 per cent of total interiors and fit outs spends in the GCC will be worth $1.62bn in 2013, up from $1.33bn in 2012. The GCC healthcare sector's interior and fit outs spends will be worth $598m in 2013 with Qatar spending the most at $180m; UAE and Saudi Arabia will spend $150m and $145m respectively followed by Kuwait at $88m.
The GCC retail sector spent $507m on interiors and fit outs in 2012 and UAE is expected to be the largest retail interior and fit out spender in 2013 with an outlay of $266m. Of the total $749m education sector interior and fit out investment in 2013 in the GCC, Saudi Arabia will spend the lion's share of 68 per cent at $506m while Qatar with $80m, UAE with $47m and Kuwait with $38m will follow.