The trend towards construction “internalisation” is emerging in the industry. But is it poised for success?

In Dubai, some of the largest property developers have stopped hiring general contractors. Instead, they are setting up their own construction arms and running the build themselves. It is a sharp move away from how the industry has worked for decades, and the pressures driving it are not confined to the Gulf.

Developers who once chose from a crowded field of contractors are finding that field has thinned. In Dubai, tenders that once attracted 25 bidders are now drawing only two or three. The pressure is broader than the Gulf: by mid-2024, 40% of UK developers reported difficulty securing enough tenderers, with similar trends across Europe. With fewer options, the ability to challenge costs or renegotiate timelines from a position of competition disappears.

The deeper frustration is with the traditional model itself. Developers commit the capital, but the day-to-day picture of how the build is actually going lives with the contractor. By the time problems reach the developer, in the form of a slipping programme or a cost overrun, the window to do something about them has usually closed. Global construction inefficiencies, including delays and rework, are estimated to cost $1.6 trillion annually, with cost overruns on major projects commonly ranging between 20% and 45%. Internalisation is the developer’s attempt to get ahead of that cycle. But does it deliver on what it promises, or just move the problem closer to home?

What internalisation really changes

A general contractor’s measure of success is completing the build to scope, on time and within contract. A developer’s measure of success is an asset that generates returns and holds its value. Those goals overlap, but they are not identical, and small daily decisions made under one logic can quietly cost the other.

When delivery sits in-house, the people running the site share the developer’s commercial outcome. Risk gets escalated earlier, because the team spotting the issue is the team that will absorb its consequences. Decisions move faster, because the people making them no longer have to negotiate across the contract.

How expectations of general contractors are changing

If the underlying problem is information rather than ownership, the implication for general contractors is direct. Periodic reports the developer has to take on trust are no longer enough. The new expectation is operational visibility built into how the work is run, not as a feature offered on request, but as the way the work is actually delivered.

One platform that connects developer and contractor, site and office, in one place is one answer. The developer and contractor work side by side in the same system, with project documentation accessible to everyone involved. The contractor raises every RFI, change order and variation request directly to the developer, with the impact on timeline and budget visible at the point of submission. The developer can sign off then and there, before the work happens. Every decision is documented as it is made. That is what turns visibility into control.

360-degree reality capture is another. A site walk with a helmet-mounted camera records the build daily or weekly and maps the imagery to the plans in the same platform. This brings the developer onto the site without being physically there. The record lets both sides compare progress over time and explore behind the walls, reducing rework during the build and giving the developer a permanent reference for the future. If an issue surfaces in operations, they can go back to any stage of the build and see how it was made.

General contractors who offer this kind of visibility remove the underlying reason developers reach for internalisation. That is a commercial position, and the ones who recognise it early will hold the relationship.

The bottom line

The developers in Dubai are reaching for control, and they are not wrong to want it. But control over a build does not come from ownership alone. It comes from knowing what is happening on the project, in time to act on it. Internalisation is one way to get there. Working with general contractors who run their projects with that visibility built in is another. Neither works without the discipline of seeing what is happening on the build in time to influence it, with every change documented as it is made.

Developers considering this path need to go in with a plan for the full scope of what a general contractor manages, from site logistics to subcontractor management and safety. General contractors who want to retain developer relationships need to demonstrate that transparency is already built into how they work, as a standard part of their offer.

Ultimately, the debate around internalisation is less about who owns delivery and more about who has timely access to the truth of the project. Developers want earlier visibility into risk, progress and cost impact. Contractors who can provide that visibility, supported by structured documentation and a reliable record of site activity, will be better positioned to remain trusted delivery partners as the market evolves.