Tagging onto the IMF’s forecast of 2009 as the worst economic year since 1945 and the downcast Davos summit, Dubai International Capital’s CEO described the sovereign fund as “still very nervous about making some big bets.” Boston Consulting Group found optimism for the UAE in its Global Leading Companies report, tipping its hat to four UAE companies – Dubai World, Etisalat, Emirates Airlines and Emaar – which have helped the country “hit the map in a big way”.
Dubai property prices continued to fall rapidly, currently down 23%. Shuaa Capital augured that prices continue in the same direction to 60% from the mid-2008 peak. New regulations in the emirate will require developers to tie buyer payments with construction milestones and to have completed 20% of the building before start of sales.
Despite a Deloitte study predicting UAE tourism industry growth to decline by two-thirds in 2009, the United Nations World Tourism Organization picked the Middle East as this year’s best performing region in this industry. Tatweer CEO Khalid Al Malik has reported that a revised plan for Dubailand, currently billed as the world’s largest collection of theme parks, was being reviewed in consideration of the economic slowdown.
Dubai fell from third to eighth place in the ranking of most expensive hotels. Abu Dhabi ranks fifth. Palm Jumeirah monorail inaugurated its first 5.45 km of track. Dubai’s water transport spokesperson says the city’s water transit plan will move forward with a plan to beat Sydney’s, which she considers the world’s currently most advanced water network, by 2012. Dubai announces development of 580 kilometers, more than ten times the length of Sheikh Zayed Road, of cycling and walking paths.
Property advertising in Dubai dropped by more than two thirds in the final quarter of 2008. “Master developer” Nakheel had been the biggest spender on outdoor advertising in the first three quarters, and now is no longer even among the top 12 purchasers.“
Aldar Properties announced seven hotels and twenty restaurants will be open on Yas Island in time for the inaugural F1 Grand Prix in October. Aldar, Abu Dhabi’s largest developer, saw annual profits increase by 77.5% in 2008, even after having decided in September to “basically stop selling” in the final quarter because of ominous market conditions. Earnings in the last quarter fell by 89%.
The Financial Times philosophized on Dubai’s future: “Dubai has spent three decades transforming itself into a global city; its future now depends on the world reciprocating this grand vision.” UBS estimated that half of Dubai’s population is involved in real estate-related industries, and mass redundancies in these industries will shrink the city-state’s population by 8% this year. Population decline will lead to a 27% oversupply of residential units by the end of 2010 and at least a 30% drop in average house prices. “Now it’s just wait and see.”
782 Filipinos remain trapped in Oman on visa runs, unable to return to work in the UAE. A reported 1,500 visas for Dubai are cancelled every day. As growing numbers of expats leave Dubai, some abandoning their cars in the airport parking lot, banks grip for higher numbers of personal defaults.
While construction firms in Dubai trim workforces, their counterparts in Qatar exploit the downturn as an opportunity to source staff for their projects. KEO International Consultants, a large Gulf consultancy company, needs engineers for tall tower projects in Doha. More than 2,000 jobs will be created during the construction phase of the long-awaited Qatar-Bahrain Causeway. Kuwait assures continuation of several large-scale projects, like the development of industrial zones, labor housing, low-cost housing and the new towns of Al-Mutlaa, Ayem, and Subiya.