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Thursday, February 09, 2023
The new investment destination behemoth in the making
The year 2022 ushered in a new era for Dubai. It is likely to be remembered for the new milestones the emirate has crossed. Dubai consolidated its status as the world’s leading FDI hub, retaining its first rank globally for attracting FDI projects during H1 2022. At 11.4 million overnight international visitors during the first ten months of 2022, Dubai has shown more than 100 percent growth over 2021. By attracting property investors and hedge funds, Dubai has broken out of the league of other Middle Eastern nations.
Dubai: Top FDI destination
As per the latest numbers from Dubai’s Department of Economy and Tourism, the emirate attracted 492 FDI projects, registering an 80.20 percent increase over last year’s numbers. Dubai also ranked first globally in terms of attracting greenfield FDI projects. These projects accounted for around 56 percent of Dubai’s FDI projects.
In absolute terms, Dubai witnessed FDI inflows of AED13.72bn ($3.73bn) during H1 2022. These projects generated 15,000-plus jobs as investor confidence in the emirate remained high. Economic stability, liberal and inclusive growth laws and bright prospects are some factors that have contributed to the emirate’s success. In addition, not just the traditional real estate and trade sectors but the emirate has received sizeable inflows in other sectors, like data processing, financial services, and industrial equipment.
Dubai: The hub of travel and tourism
With more than 11 million visitors last year, Dubai aims to host 40 million hotel guests by 2031 and astronomically push the tourism sector’s contribution to GDP. It seeks to achieve this by increasing annually by AED27bn. Comparing the overall numbers with the pre-pandemic era, the YTD average occupancy till October 2022 was only 2.4 percent less than pre pandemic base. This is again reflected in revenue per room which reached AED362, above AED245 seen from January to October 2021 and AED295 number seen from January to October 2019.
As ranked by Euromonitor International’s Top 100 City Destinations Index 2022, Dubai is the world’s second most attractive destination for tourism. Dubai scores well on the six critical pillars of the survey ranking – economic and business performance, tourism performance, tourism infrastructure, tourism policy and attractiveness, health and safety and sustainability. For Dubai, the icing on the cake is another projection suggesting that the emirate will record the highest tourist spending among all the cities reaching $29.5bn.
Dubai also emerged in the top five places amongst the top 10 busiest air travel routes last year. The MICE segment (Meetings, Incentives, Conferences and Exhibitions) has been the prime stimulus factor for Dubai’s tourism growth.
Dubai: The newest fad amongst hedge funds
Prominent names such as Millennium Management and Blue Create Capital are now part of a growing clutch of firms choosing to expand their operations base over here. For Dubai, the Brexit debacle and Hong Kong’s Covid-19 restrictions have been a blessing in disguise. Brexit has spurred many funds to seek new offices outside London.
Dubai’s tax-free welcome mat makes it more lucrative for such firms to set up a new base. Global consultancy firm Henley Global Citizen has projected that the UAE will attract more than 4,000 millionaires this year. In addition, the UAE’s digital nomad visa and several investor programmes offer an attractive incentive to those willing to make this country their home.
In the financial services industry, too, Dubai is trying to grow by leaps and bounds. For example, in DIFC, one of the significant financial service’s free zones in Dubai, 537 new companies joined the free zone. With this 15 percent growth, DIFC is now home to 1,252 financial and innovative related companies.
Capitalising on global reopening theme
The Dubai economy has been growing at around 6.3 percent since mid-2021 since the domestic Covid-19 restrictions were lifted. The services segment, which was the worst hit, is leading the gains amongst the other sectors. The increased regional liquidity will also help sustain the business opportunities and investments here. Should the ongoing global reopening theme stay intact, the entire narrative of Dubai and UAE as the top investment destination will only grow louder. With China yet to reopen completely, UAE, led by Dubai, will surely benefit from this low-hanging fruit.Source:
CEO Middle East