Reflecting on the current economic landscape of the GCC, particularly in the UAE and Saudi Arabia, it’s evident to me that 2024 holds the promise of a modest economic upturn, particularly within the real estate sector.
Having embarked on my journey as a young entrepreneur in the mid-1990s, I’ve witnessed firsthand the transformative impact of visionary leadership and strategic positioning in the region. I’ve watched cities like Dubai leverage their central location and government initiatives to attract international companies and top talent, reaping the benefits of infrastructure built over the last 30 years and evolving into indispensable hubs of commerce, residence and tourism. Even amid geopolitical shifts, high-profile events like COP28 as well as the UAE’s and Saudi Arabia’s invitation to join the “BRICS” club of emerging nations have given a significant boost to the region’s rapidly evolving and diversified economies.
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Economic resilience
In addition, GCC governments’ continued ability to manage inflation rates, largely due to robust policies, has helped them develop an iron-clad resilience against global fluctuations over the years, ensuring stability and prosperity for citizens and residents.
The UAE has long been recognized for its exceptionally open economy, facilitating business, entrepreneurship and innovation well before concerns about dwindling oil reserves and sustainable resources took centre stage. As an entrepreneur deeply immersed in the region’s business landscape since 2002, I foresaw this strategic shift away from reliance on hydrocarbon revenues and toward sectors like tourism, education and healthcare technology as a precursor to the current economic stability and global competitiveness of the Middle East.
This ongoing diversification, supported by national strategies, safe-harbor status and digital transformation and social initiatives, has propelled countries like the UAE to rank 16th globally in investment attraction. It not only inspires confidence in new domestic and international investment but motivates established developers like us to expand our horizons and contribute to shaping the dynamic cityscape.
Optimism among investors
Despite recent socio-economic challenges, global investors remain optimistic about the region, particularly in the UAE. With central banks expected to ease credit facilities, lower interest rates are anticipated, which will boost purchasing power and investor confidence.
Moreover, the UAE and Saudi Arabia stand out as leading destinations for living, investing and working, boosting the region’s real estate market. This is driven by their strong economies, stable political landscapes, population growths and urbanization trends. Official data from the UAE shows a significant growth in residential transactions, with Abu Dhabi experiencing a 56 percent surge annually, reaching AED 67.8 billion. Dubai has witnessed a 37 percent annual increase, surpassing AED 500 billion in the first 10 months of 2023.
Leveraging the market
Developers like us, who place diversification at the core of our strategy, are strategically positioned to capitalize on these positive market trends. With a thorough understanding of our customers’ needs, we are well-equipped to launch innovative businesses and projects that meet local tastes and global demand.
Leveraging the thriving UAE real estate market, DAMAC, for example, has launched around 15 towers over two years, focusing on branded residences.
The success of projects like Lagoon Views, which sold out within 24 hours of its launch early this year, reflects investor confidence in the market as well as our ability as a brand to deliver real estate solutions.
Resilient regional real estate sector
A resilient regional real estate sector not only provides stability in the region but also opens doors for homegrown property developers to explore lucrative opportunities in other flourishing markets. Regions such as Europe, the U.K., Africa, and other emerging markets can reap the benefits of our established real estate track record. DAMAC’s partnerships with firms like Zaha Hadid Architects for a landmark project in Surfside, Miami, and collaborations with luxury brands such as Mandarin Oriental for a resort project in the Maldives are some projects that highlight the capability and dedication of regional developers to global expansion. Continuing our journey of global growth, we will soon be announcing investments in other new markets, as well.
The exponential expansion of the region’s real estate sector stands as a testament to its remarkable foresight. As the projections indicate that the market is on track to exceed $5 trillion by 2028, the opportunities are boundless for global investors and enterprises to participate in a thriving landscape.
The achievements of versatile region-based developers such as ourselves in 2023 reflect the Middle East’s resilience amid today’s economic environment and reaffirm our readiness for shifting dynamics. Drawing on our strengths and investing in innovative initiatives, we anticipate sustained growth, mirroring the region’s trajectory in the global economy.
Hussain Sajwani, founder and chairman of DAMAC.
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