Regional Description

The Middle East has seen an unprecedented level of property development over the last 5 years. Dubai has led the way but other countries in the region are following suit.

Some of the main drivers for this growth are as follows:

 Opening of legal constraints on foreign ownership

 9/11 and repatriation of funds

 Activity of Islamic Banks/Funds

 Oil wealth / Booming economic conditions / “Trickle Down”

 Investor confidence

 International speculators

 Lack of alternative investment vehicles

 Extensive local and international marketing

Although oil prices have tripled in the last 3 years, Dubai specifically is running out of this natural resource and the diversification into other areas has been out of necessity. The success has been staggering. The UAE’s GDP grew by nearly 12 per cent from £56 billion in 2004 to £63 billion in 2005. The value of the UAE’s trade reached nearly £80 billion in 2004 – higher than its GDP. Around 24 per cent of the world’s tower cranes are in Dubai. Dubai already has some of the recent construction wonders of the world including what will be the tallest building -the Burj Dubai, the largest shopping mall, an indoor ski dome able to function with summer outside temperatures in excess of 50°C, the only 7-star hotel -The Burj Al Arab, and, of course, the Three ‘Palms’ and a replica of the ‘World’ - all massive real estate developments out in the Persian Gulf off the coast of Jumeirah. The success of Dubai has acted as a catalyst for other countries in the Middle East such as Bahrain (Bahrain Financial Harbour), Qatar (The Pearl), Oman (The Wave) and Saudi Arabia (King Abdullah Economic City) to utilise their natural wealth to develop their infrastructure to new levels.

The Dubai Property Outlook for 2006 predicts that businesses in the UAE are positive about the trends in the local markets, particularly in the retail and real estate sectors (source: Dubai Chamber of Commerce and Industry – DCCI).

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