A subsidiary of France's Vinci, the world's largest construction group, is eyeing more complex projects in Abu Dhabi as it starts operations in a fiercely competitive market, an executive said.

Vinci Construction UK, which trades in the Gulf under the name Taylor Woodrow International (TWI), expects to get its contractors classification in Abu Dhabi by next month, letting it tender for work on its own or with local partners, TWI's general manager in Abu Dhabi, Melvyn Ford, said in an interview to Reuters.

TWI began operations in the Gulf Arab region in March, setting up its headquarters in the UAE capital, and was awarded its commercial license there in July.

'We have to be very selective. We can't compete with local firms so we are going to look at more complex projects which show a degree of specialism,' he said.

Ford said TWI would target government work for civil and social infrastructure including the education and healthcare sectors, administrative and cultural buildings, mass transport systems, airport development, ports and industrial works.

TWI will look at public-private partnerships or private finance initiatives and has identified facilities management work as a potential market to tap, he said.

TWI is also tendering for projects in Oman and Qatar, where it has set up new joint venture companies with existing contractors, Ford said. It is setting up a company in Riyadh and exploring opportunities in Bahrain and Kuwait.

Profit margins in Abu Dhabi, home to most of the UAE's oil, have suffered during the downturn as construction firms flocked there from neighbouring Dubai's battered real estate sector, where property prices slumped some 55 per cent from 2008 peaks.

Gross margins in Abu Dhabi are around 6-8 per cent and at best 10 per cent, whilst in Oman and Qatar they are at least around 10 per cent and as high as 15-20 per cent in Saudi Arabia depending on the work and client involved, Ford said.

'About a year ago, the construction sector in Abu Dhabi looked lively, but now it is very quiet,' Ford said. 'I think it will take six months from October before it really gets going again.'

Gulf construction firms - such as Arabtec, the UAE's largest construction firm, and Dubai contractor Drake & Scull International - are among the firms seeking work further afield in the Gulf region and beyond given the tough market conditions closer to home.

House prices in Abu Dhabi, off around 40 per cent from their peaks two years ago, are set to fall a further 13 per cent in 2010, a Reuters poll in July showed.-Reuters