UAE: Dubai

Strong fundamentals and a diversified economy are keeping concerns at bay in Dubai, despite a potential cooling of investor sentiment across the region and weakening global conditions.

The real estate sales market in Dubai has outperformed the rental market in the last year, sparking a squeeze in yields and prompting concerns that the fundamentals of the market are becoming skewed.

Expanding public transport has become a priority for Dubai as it looks to accommodate both a rapidly rising population and the millions of visitors expected to attend World Expo 2020. 

When the UAE officially transitioned from “frontier” to “emerging” on a key market index in June 2013, a new era of both greater opportunity and closer scrutiny for the financial markets in Dubai was ushered in. The results are already coming to the fore: stocks across the UAE are up 41% in 2014 and 89% over the last year as of June, while capital markets in Dubai are starting to draw more attention from foreign investors.

A new aviation district in Dubai is set to spearhead growth across the maintenance, repair and overhaul industry, while strengthening the emirate’s position as one of the world’s largest air transport hubs.

Faced with rising power consumption and a grid under pressure, Dubai is stepping up its efforts to improve energy efficiency, while boosting the role played by renewable resources in meeting demand. Long term, a broad range of initiatives, supported by a new regulatory framework announced last year, should help bring energy costs under control.