Dubai inching its way into same league as China? World spenders' choice city in the ME
Dubai remains the favourite city in the Middle East of the world’s richest investors, though it has some work to do if it wants to challenge established global locations like London or New York, or hold its own in the face of stiff competition from China.
That’s the picture that emerges in a major international report into the affections of the world’s high net worth individuals (HNWIs) - that’s super-rich success stories with more than $30 million in personal wealth.
Real estate consultants Knight Frank asked the wealth advisors who help the globe’s richest people to list the cities that their clients consider the most important. And Dubai makes the Top Ten.
The emirate placed seventh - behind London, New York, Singapore, Hong Kong, Geneva and Shanghai - in the firm’s ‘Attitudes Survey’, part of The Wealth Report 2013, a broader study into the favoured locations of the world’s HNWIs that will be launched in the emirate today.
But while Dubai may be sitting relatively pretty, the same wealth advisors said they expect it to drop to ninth place in their clients affections in the next ten years as the rise of China propels Beijing and Shanghai further up the table.
The report’s authors note: “Even Dubai is knocked down the table by the anticipation of the influence that will be wielded by the Asian behemoths.”
Despite the strides made by the emirate in the last decade, it may be sobering to some to find that in another set of rankings featured in the Knight Frank report - a Global Cities list, which bases its findings on reports by top institutions including the United Nations - Dubai is ranked 29th, albeit high enough to ensure it is still the best ranked city in the Middle East.
But James Lewis, a Knight Frank director in the UAE, has said the fact the emirate trails Oslo, Boston, Seoul and Toronto as well as more traditional business hubs in the Global Cities poll is no cause for alarm.
“We don’t think Dubai is going to be going anywhere any time soon - we see it going from strength to strength,” he told 7DAYS.
“For Dubai to be holding its position, broadly, within the destinations favoured by HNWIs given the substantial growth in Asia, South America, and Africa, is quite something.”
Dubai’s villa market was the third-best performing real estate market in the world last year, according to property experts Knight Frank.
Prices grew by 20 per cent, trailing only the markets of Bali - which saw a similar rate of growth - and the Indonesian capital Jakarta, where prices shot up by 38 per cent last year.
The emirate has gone from “the epitome of the global downturn between 2008
and 2009”, according to the firm’s analysts, to rebounding in 2012 on “the back of a resurgence in demand”.
Buyers were attracted by Dubai’s strategic location and its safe haven status during unrest elsewhere.
A MILLION DON’T GO FAR
Got a spare $1 million? Then you can expect to be able to buy a luxury Dubai villa covering around 168sqm, according to The Wealth Report 2013.
But hop on a plane - or more likely a superyacht - and take that same $1 million to Monaco and you can expect a lot less luxury abode for your money. Just 16sqm to be entirely precise.
In fact, while you can get 23sqm for your million in London, 44sqm in Sydney or 73sqm in Los Angeles, very few markets can match Dubai for value - only in Cape Town do you get more bang for your buck, with 172sqm for $1 million.
A reminder, Knight Frank director James Lewis tells 7DAYS, that in Dubai: “We haven’t got it that bad.”
ROOM FOR MORE?
Dubai remains the sole Arab city ranked in the world’s Top 40 by investors, according to the Knight Frank poll. It is also the only one in the Top Ten cities wealth advisors say are favoured by their super-rich clients.
But could that change soon? Will Abu Dhabi’s ambitious development plans, or Doha’s bid for the global stage with football’s World Cup, propel either within sight of Dubai?
“I think Abu Dhabi in particular is making huge strides forward, and Doha is perhaps slightly behind them,” says Lewis. “Unquestionably, Dubai has stolen a march. It has been through some tough times... but has certainly recaptured its crown within the region.”
Dubai may struggle to match the expected growth of China in the coming years - advisors to the super-rich think three Chinese cities will be among the top six destinations for their cash by 2023 - but that will have its own compensations.
“We don’t think it will be too long before we start seeing considerably more Asian interest in Dubai,” Knight Frank director Lewis says.
“Already if you go to any of the high-profile malls or any of the high-profile restaurants these days you will see an Asian contingent there - be that expats working or indeed tourists from mainland China.
“And so that is continuing and we will see that underpinning the continued growth of Dubai in the years ahead.”