GULF STATES| ECONOMICS & FINANCE
Sheikh’s China visit to focus on oil, energy and tech
The UAE has pledged to make the nation into a global hub of trade and investments and with preparations of Expo 2020 Dubai in full swing, investors are closely watching developments.
The nation’s world-class infrastructure and ease of doing business facilitates are making the UAE the much-sought and preferred investment destination in the region.
The UAE has already consolidated its ties with India and now the much-talked about China trip scheduled next week led by His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, will further boost the UAE’s presence on the global map.
The high-level UAE delegation is expected to have talks on boosting ties with focus on key economic sectors like oil, energy and technology.
|United Arab Emirates – Economic Indicators|
|GDP Annual Growth Rate (%)||2.2||Mar/19||1.7|
|Unemployment Rate (%)||2.57||Dec/18||2.46|
|Inflation Rate (%)||-1.1||May/19||-2.1|
|Interest Rate (%)||2.75||Jun/19||2.75|
|Balance of Trade (AED Million)||299400||Dec/18||246900|
|Current Account (AED Million)||139000||Dec/18||971000|
|Current Account to GDP (%)||6.6||Dec/18||7.3|
|Government Debt to GDP (%)||18.6||Dec/18||19.7|
|Government Budget (% of GDP)||-1.8||Dec/18||-2.6|
|Consumer Confidence (Index Points)||113||Mar/19||110|
Emaar to build first 3d-printed home
Emaar Properties announced plans to build its first 3D printed home in Dubai, the first step towards Emaar’s ambition to be a leading adopter of advanced construction technologies.
Following a global competition in which the world’s leading 3D printing technology providers participated, Emaar has awarded the contract to 3D-print a model home in Arabian Ranches III. The construction will be facilitated using a local contractor with the goal of building in-country competencies in 3D printing for the realty sector.
Building the first 3D-printed model home underlines Emaar’s commitment to adopt innovative construction methods to build faster and at a lower cost while achieving higher design and architectural flexibility. Emaar’s use of 3D printing technology will also promote the sustainable use of resources by reducing waste of construction materials and noise pollution.
Upon completion, the 3D-printed model home will serve as a reference point for investors to further understand the concept and appreciate the value add that advanced technology brings to the real estate sector.
Mohamed Alabbar, chairman of Emaar Properties, said: “Our plans to embrace 3D printing of homes is an integral part of our digital-first and customer-first strategy. Through this, we are not only positioning ourselves as an early adopter of advanced technology but also creating long-term value for our customers as 3D printing brings numerous advantages, such as reduced cost of construction, more efficient use of materials and higher levels of sustainability.”
“With 3D printing technology, to be implemented locally using international expertise, we are also supporting the vision of the leadership to build ‘Smart and Sustainable Cities’ that are tech-driven and meet the aspirations of the new generation of customers. It will also help accelerate the innovation ecosystem in Dubai, inspiring start-ups to contribute towards advanced construction technology.”
Dubai tourism has strong growth potential for next decade
Dubai has balanced dynamics for the growth of its tourism sector over the next decade, thanks to its readiness, tourism infrastructure and additional avenues for visitor growth without straining its urban landscape.
The emirate has been ranked at par with Beijing, Hong Kong, Munich, Osaka, Shanghai, Singapore, Tokyo and Washington DC for balanced dynamics of tourism growth by JLL and the World Travel and Tourism Council’s (WTTC) latest report, Destination 2030.
Balanced dynamics cities are often business centres with a lower share of leisure compared to business travel, but they also have an established tourism infrastructure and potential for travel and tourism growth.
Citing an example, the study highlighted that Dubai’s tourism department has developed a sustainability strategy to ensure the continual development of sustainable tourism, along with a Dubai Green Tourism Awards scheme.
The study rated the emirate highly for supportiveness of policies in terms of fostering a sustainable tourism growth, scale of travel and tourism market and concentration and density of tourists and visitor activity. Ross Veitch, CEO of Wego, said the travel and tourism industry in Dubai continues to expand with more focus on leisure and entertainment.
“As the number of millennials and Generation Z travelling for business increases, we see ‘bleisure’ as a growing trend where more people are looking at combining their business trips with leisure. Dubai’s vibrant leisure market is attracting more business travellers who are following this trend. Researches show that more than 60 per cent of business trips are extended for leisure. A key measure that cities need to take is to balance between leisure and business travelers to address the demand,” he said.
Me’s largest solar energy system at Dubai Airports
Dubai Airports on Monday said a solar energy system comprising 15,000 photovoltaic panels at Dubai International’s Terminal 2 has been installed.
Installed by Etihad Energy Services Company (Etihad Esco), it is the largest such system at any airport in the Middle East.
With a capacity of 5MWp, the solar project will generate 7,483,500 kWh energy annually for Dubai Airports, resulting in savings worth Dh3.3 million.
The project will reduce existing Terminal 2 load by approximately 29 per cent, while also slashing annual carbon dioxide emissions by 3,243 metric tonnes, which is equivalent to 53,617 tree seedlings grown for 10 years or 688 passenger vehicles driven for one year.
“Dubai Airports has undertaken a variety of green initiatives over the past several years to limit our carbon footprint and support Dubai’s goal for a 30 per cent reduction in the city’s energy consumption by 2030,” said Michael Ibbitson, executive vice-president for infrastructure and technology at Dubai Airports.
Ali Al Jassim, CEO of Etihad Esco, said the firm aims to retrofit 30,000 buildings by 2030.
Aldar offers post-handover payment plans
Abu Dhabi-based developer Aldar is offering post-handover payment plan to property buyers for the first time on its latest projects, reflecting the market trend where developers are resorting to new incentives to prospective buyers amidst falling sales.
The largest property in Abu Dhabi will offer up to 60 per cent post-handover payment plan on its six latest projects – Mamsha, Jawaher, Yas Acres, Mayan, Alghadeer and Reflection. The payment plan, however, excludes the period of construction works.
Maan Al Awlaqi, executive director for commercial at Aldar, said this is first time company is offering post-handover payment plan, which is spread over four to five years.
“Meeting customer demands is a top priority for us, and this promotion is designed to create convenience and flexibility. Under the terms of the new post-handover payment plans, customers will be able to buy dream homes on beneficial terms at a choice of six prime developments in Abu Dhabi,” he said.
The developer also offers to charge no registration fee on the purchase of villas, townhouses and apartments.
Property developers across the UAE have been introducing new incentives to the buyers amidst decline in sales. Dubai-based Emaar Properties earlier this year offered three-year renewable business licence from the DMCC and renewable residency visa to customers on the payment of only 20 per cent of the apartment price.
Prices for apartments and villas in Abu Dhabi declined 5 per cent and 3 per cent, respectively, in the second quarter of 2019.
Nick Witty, managing director of Chestertons Mena, said downward price corrections are expected to continue throughout the rest of this year as over 11,000 units are scheduled to be delivered, which is creating a highly competitive market in favour of both tenants and home-buyers, to the detriment of property prices and rents.
“There is, however, reason to be optimistic. The recently announced freehold law is expected to generate a marked improvement in the capital’s real estate sector, the UAE ministry has also recently cut work permit fees by between 50 per cent and 94 per cent, while the 10-year residency visa should enable people to put down roots in the country and encourage them to invest in property for the long term,” he said.
Aldar shares closed unchanged at Dh2.13 on Monday. Over 9.51 million shares changed hands worth Dh20.15 million in 284 transactions.
Startup sets example of successful exit stories
The UAE’s startup industry has set an example of successful exit stories and founders reaping rich returns on investments, ever since the Souq-Amazon deal was inked for $580 million, followed by Uber’s acquisition of Careem for $3.1 billion. The industry is now poised for record year in startup exits and young entrepreneurs are encouraged and strongly supported by the government, investors, accelerators and mentors.
The UAE is, in fact, offering a multicultural and vibrant ambience to budding entrepreneurs with the sole objective of boosting skills and development, which harnesses innovation and growth. The first half of 2019 remained very buoyant as the UAE remained the largest recipient of startup funding by number of deals, followed by Saudi Arabia, Bahrain and Tunisia, which have also emerged as a stronger ecosystem, according to the ‘H1 2019 MENA Venture Investment Summary Research – Scaling beyond borders’ study issued by Magnitt on Monday.
The first half of the year saw $471 million in total funding and 238 deals, indicating an increase of 66 per cent compared to the first half of 2018, as well as a 28 per cent increase in the number of deals – this is the highest number of deals in the first half of a year on record. The UAE accounted for the lion’s share of total investment amount at 66 per cent, as well as 26 per cent of all deals in the first half.
The top sectors of the Mena startup industry include fintech, e-commerce, delivery and transport, food and beverage, IT solutions, education, consumer services and healthcare. The first half witnessed fintech recording maximum business and received the largest number of investments, accounting for 17 per cent of all deals – indicating an increase of 9 per cent compared to the same period last year. E-commerce was at 12 per cent, followed by delivery and transport and food and beverage.
The Mena Fintech Association – an inclusive, not-for-profit body that fosters an open, cross border dialogue for the region’s fintech community – plays a vital role in promoting the regional innovators by bringing to light their solutions to global platforms, paving the way for new revenue streams for all stakeholders.
Dubai-based Nihal Abughattas, founding board member of the Mena Fintech Association, said: “Fintech, accounting for 17 per cent of all deals in the first half of 2019 and retaining its top spot as the most active industry, is evident enough to see the growth it has registered. The increase largely comes from early-stage venture investments and accelerator programmes. The region offers tremendous potential that redefines the fintech industry constantly. Innovation has paved way for 250 fintech ventures to be set up by 2020 in Middle East region.”