Special Features
Dubai Bouncing Back
Dubai’s economy posted its best performance in 2012 since five years ago, growing 4.4%. By comparison, its GDP grew 3.6% in 2011 and 3.5% in 2010. The twin pillars of Dubai’s growth were the hospitality industry and the manufacturing sector, which grew 17% and 13% respectively in 2012. In response, Dubai’s benchmark index has rallied over 45% so far this year. Meanwhile, the emirate’s credit default swaps, a measure of the riskiness of the economy, have dropped by over 50% in the last year.The optimism has spurred a run up in real estate prices, which dropped 50% after the financial crisis. According to a Knight Frank report, property prices increased 21.1% in the first quarter of 2013 compared to the same period last year. Studies conducted by Jones Lang LaSalle show that vacancy rates in the first quarter fell 400 basis points, while rents increased 4.6% year-on-year.
Recent mega-projects include the Mohammed Bin Rashid City, slated to become the world’s largest shopping mall, more than 100 hotels, 1,500 luxury villas and an enormous public park. The City project will be part of the retail district announced last November by Dubai’s ruler, Sheikh Mohammed Bin Rashid Al Maktoum. Another example of overzealous investing: plans for a $1.6 billion luxury resort to be built on a man-made island, including plans to build the world’s tallest ferris wheel, Dubai Eye.
