Heavy home and foreign investment in real estate and strong exports to other member countries has – amongst other factors – seen the UAE remain the top investment destination amongst the six countries comprising the Gulf Cooperation Council (GCC).
Dubai, Abu Dhabi and Sharjah were the most popular investment destinations out of the seven emirates for high-net-worth individuals according to property consultant Cluttons’ 2016 Middle East Private Capital Survey.
Where are the top investments?
As it happens, they are to be found in the most significant categories:
UAE imports from other GCC states amounted to AED 12.4 billion from January to the end of September 2015, but this figure was dwarfed by the UAE’s exports to fellow GCC states of AED 32.16 billion in the same period.
GCC nationals invested heavily in the UAE property market – with Dubai especially emerging as a favourite option during 2015 – a trend also continuing through 2016 according to Cluttons’ latest figures.
Dubai is also proving highly popular amongst foreign property investors, currently being described as a ‘haven for UK commercial property investors’. A combination of reasonable property prices, high rental returns and the tax-free advantages are stimulating demand.
The investment appeal of Dubai is also helped by the variety of residential property types. Good commercial property opportunities exist with a range of office accommodation providing reasonable rental yields of between 6 to 9%.
Gulf industrial investment in the UAE amounted to just over AED 4.3 billion in 2015, distributed across various industry sectors including; non-metallic mining, food and beverage, chemicals, machinery and equipment and the paper and related products industry.
The number of listed companies allowing GCC citizens to trade reached 86 in the Securities and Commodities Authorities (SCA). The amount of capital generated by these companies rose from AED 149 billion in 2014 to AED 167 billion the following year.
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Other Gulf state banks operating in the UAE amounted to ten branches with four being Kuwaiti-owned.
Some 4,185,000 tourists from the GCC visited the UAE in 2015, which represented a formidable compound growth of just over 66% between 2010 and 2015. Saudi tourists alone represent just over 45% of the total amount.
Reasons for the UAE’s strong performance
The Minister of State for Financial Affairs, Obeid Humaid Al Tayer, attributed the UAE’s impressive showing to clear and effective directives from the state’s wise leadership in achieving GCC economic integration.
A key city?
Another key reason might be Dubai itself; there are many reasons why it’s an investment magnet.
The mammoth Expo 2020 is getting nearer with the huge prospects for business and the economy that this will entail, a tax-free economy gives businesses and foreign investors plenty of motivation to invest there, large-scale construction creates business opportunities and options for investors, the city has a very strong water and land transport infrastructure along with a high-capacity port, and the city’s strategic location on the southeast coast of the Arabian Gulf means good links to the rest of the world.
It’s easy to see, then, how this city is acting as a driving force behind the UAE success story.