Just when the doomsayers were predicting the implosion of local real estate, it has been reported that over US$ 15 billion worth of construction contracts are to be awarded in the UAE in 2012 bringing the country’s total construction work-in-progress to a staggering US$1.25 trillion.
Also work on the stalled US$ 675 million Al Sufouh Tram project is to be resumed and the first phase will be a ten-kilometre link between Dubai Marina and Knowledge Village.
It was encouraging to see that Nakheel has announced its return to the market by launching several new projects including a destination mall on the Palm Jumeirah and expansion of the Dragon Mart. Following on from its restructuring – in both debt and ownership – latest figures show that its Revenue was over US$ 400 million in the six months to December.
Earlier in the week, the Dubai/Australian company, Habtoor Leighton Group was awarded a US$ 130 million contract for work on the Jewel of The Creek, part of a US$1 billion development, aimed at reinvigorating the Deira side of the iconic Dubai Creek.
The Nakheel / Australian link was in further evidence with news that their former CEO, Ozzie Chris O’Donnell, has been awarded US$ 3.7 million in severance pay, following his departure from the company in June 2011. A pity for him to see the strength of the Australian dollar, currently trading at almost AED 4 if he wants to convert.
DP World, the global marine terminal operator, continues the Dubai good news story by announcing another record year. In 2011, it handled a staggering 54.7 million TEU (20 foot equivalent container units), more than 10% up on the 2010 results. UAE growth was an even more impressive 12% year on year increase handling 13 million TEU.
Then from sea to air even better news from Dubai International Airport. January witnessed a 14% rise in passenger numbers up to 4.85 million from 4.25 million a year earlier.
No wonder then that Dubai hotels continue with their impressive growth pattern into 2012. GCC demand continues unabated along with larger number of visitors also arriving from India and China.
HSBC announced its 2011 results showing that it made a profit of US$ 21.8 billion. The relative strength of the local economy can be seen from the fact that its profits were 15% up on last year whereas its Middle East Unit reported a massive 67% hike in its profits to US$ 1.4 billion.
Every cloud has a silver lining and there are indications that over 20% of deposit funds (about US$ 1.8 billion) have left Syrian banks. No doubt some of this money is now lodged here in Dubai.
The local Central Bank is to report this May and may recommend a major overhaul in retail banking. Don’t be surprised to see some much needed changes in regulations to credit cards, personal loans and mortgages – which could be in favour of the consumer. (If only they could do something about the woeful customer service found in many of the financial institutions!)
The Dubai Financial Market General Index continues to defy gravity and is now trading at 1698 –almost 25% up since the start of the calendar year when it stood at 1353. It must be time to reflect before the inevitable happens.
According to an IMF estimate, the country had a per capita income of US$48,597 in 2011, making its residents the sixth-richest in the world.
So when we make comparisons with other parts of the world, maybe life here is not as bad as some overseas media try to have us believe.