Details

Dubai Maintains Competitive Edge and Investment Quotas Despite Challenges

The Emirate’s economy is robust enough to accommodate all business demands and pressures

All fields are expected to experience a rapid economic boom

The Emirate of Dubai continues to show growing levels of buoyance in the real estate and tourism sectors, boasting growing demand and increasing financial returns in all business platforms, thanks to its highly sophisticated industrial base and acquisition of good market quotas. This impressive economic success is attributed to a number of factors – primarily well-thought planning that carefully takes into consideration recovery and deceleration circumstances, a sound learning methodology, application of best practices, optimum utilization of resources and seizing feasible investment opportunities.

In its weekly real estate report, Al Mazaya Holding stated that the property sector in Dubai is enjoying high demand thanks to the sound, well-founded plans devised by the government to cope with and accommodate demands of the fast-faced developments taking place regionally and worldwide.

The report also highlighted the positive impact of the current competition running between GCC markets, where efforts are tirelessly being made to improve the investment environment by launching mega infrastructure projects worth billions of Dirhams and developing business-friendly legislations to attract feasible local and international investments. This is in addition to the current endeavors to privatize state-run companies and assets.

The report underlined the positive impact of privatization on the region’s economy in terms of mitigating financial burdens and risks, and offsetting budget deficits in some sectors. All economies of the region are set to benefit from the business incentives provided by privatization, as the economies will enjoy a higher level of preparedness and readiness potential to secure a better position in terms of investment incentives and opportunities.

The economic boom witnessed by Dubai is attributed to its ability to attract and adopt innovative business concepts that certainly generate positive returns under all circumstances, thanks to its modern infrastructure and sound approach toward different economic circumstances and pressures.

The Dubai economy managed to attract AED 403 billion worth of direct and indirect foreign investments during 2016, which accounts for 67% of the country’s and region’s total foreign investments. Wholesale and retail trade transactions account for the largest part of these investments, followed by the financial sector in the second position and the real estate sector in the third position with AED 58 billion worth of direct foreign investments.

A strong recovery was recorded in the trade, tourism and construction platforms by the emirate’s private sector, as revealed by Dubai markets data by end of December 2016. This is attributed to growing production, business and employment activities and exceptional performance in the construction sector, which has played a major role in propelling the economy to a very reasonable level. On this score, the report cited growing cash levels and the large number of transactions implemented in Dubai that amounted to AED 295 billion worth of property deals in 2016, with sales accounting for AED 103 billion thereof. The private sector also launched 134 new projects estimated at around AED 100 billion.

The report attributed the pressures and challenges experienced by the UAE realty market last year to the weak oil prices and the geopolitical developments in the region. Large-scale infrastructure, road and transport projects estimated at AED 20 billion will be executed over the coming years, including those associated with EXPO 2020. This economic boom is likely to boost economic competitiveness and enhance the emirate’s ability to draw global companies specializing in high-end smart technologies.

Dubai has managed to strengthen its position as a global business center thanks to the government’s economic diversification plans and efforts to streamline export regulations, the report stated. The emirate thrives with developmental projects in addition to innovation-based enterprises that are likely to generate a plenty of investment, development opportunities and prospects over the coming years, with available data estimating the total value of 2017’s real estate projects at more than AED 100 billion. These projects include EXPO 2020 enterprises, Dubai South, and Al Maktoum International – Dubai World Central (DWC), in addition to several tourism enterprises, the latest of which is the launch of Dubai Harbour Project, the Middle East region’s largest marina that is planned to feature a cruise ship port with a terminal fit for 6,000 passengers.

Highlighting the knowledge-based economy projects launched by the emirate, the report cited the Museum of the Future, a unique initiative by the government of Dubai that explores the future of science, technology and innovation, and is therefore expected to turn Dubai into a regional and global hub for the development of sciences. The Mall of the World is a project to build the largest shopping center of its kind in the world, which envisions a fully air-conditioned city, comprising more than 4,500,000 square meters and capable of receiving around 180 million visitors annually. Dubai Water Canal is another major enterprise to create unlimited tourist investment opportunities, including hotels, restaurants and entertainment facilities. Remarkable progress is being achieved by the emirate as well in terms of implementing power and water generating projects that are likely to produce high-yield financial savings amounting to AED 60 billion by the year 2030.

Conclusion

Dubai is required to forge ahead with its efforts and ambitious plans in order to maintain its competitive edge and powerful economic position – a difficult task to emulate at present or in the future. As a result, Dubai will be able to continue to benefit from the investment opportunities available.