Dubai’s exhibition season has started with both the 11th Cityscape Global 2012 and GITEX Shopper (with the main GITEX Technology Week being still two weeks away). HH Sheikh Mohammed bin Rashid Al Maktoum opened the popular consumer and IT electronics event and was so impressed with its positive impact on the local economy, he ordered that it become a bi-annual event.

Meanwhile Cityscape began with announcements of several major projects – the largest of which was the on-going Falconcity, with a capital cost in excess of US$ 10 billion. Its Chairman, Salem Al Moosa, has estimated that, within ten years, the development will be home to 35,000 residents who will be housed in areas adjacent to global landmarks such as the Taj Mahal, the Giza Pyramids and the Eiffel Tower.

Not to be outdone, Meydan – having already spent over US$ 2.7 billion on the iconic racecourse – detailed three new projects. Two of these will be within the original location including the US$ 3.0 billion Sobha City, in conjunction with the Indian company of the same name. This development will cover 8 million sq ft and will encompass 280 villas, 13 high rise apartment blocks, retail space and schools with a ten year completion schedule. The other will be the Meydan Tower, on Sheikh Zayed Road, a mixed used area including a 100-room boutique hotel, 250 serviced apartments, 300 units and 20,000 sq ft for retail use.

Surpassing all expectations, Cityscape reflects further confirmation that the Dubai realty sector is well and truly on the way up. If further proof were required, then one just has to look at the way villa prices have climbed 14% in the past twelve months whilst rents have climbed 10%. As a result of these price escalations, Dubai is placed 12^th in the ranking of 27 global markets. This comes despite the fact that the inventory supply continues to climb to a level of an estimated 350,000 which shows that more people are making Dubai their home base. There is confidence that prices will continue to move in the right direction for at least the next two years moreso when the active population is set to expand at an annual rate of 6.1% compared to residential supply growth of 4.9% over the same period.

Even the badly bruised Nakheel has got in on the act and seeing brisk demand for its public launch of 360 Jumeirah Park Legacy villas selling in the region of US$ 1.3 million. To try and avoid flipping of properties – that was so prevalent in the industry five years ago – the developer requires a 15% down payment with instalments over the ensuing three years prior to completion.

However, one sector still suffering from the manic building boom of days gone by is commercial, where there is a worrying 45% vacancy rate. Q3 saw US$ 550 million in transactions and any movement southwards, towards say the 40% level, will be a major achievement – unfortunately this will have to be a longer term target.

Hotels are a different story with the first half of the year witnessing a 10.0% hike to 5 million guests for Dubai’s hospitality sector with an additional 18% more nights to 19.2 million. The important factor was that Revenue rose a welcome 22% to US$ 2.67 billion. The number of rooms has jumped 4% to just over 54,000 so that any further positive movements in visitor numbers will be easily accommodated.

Away from their home base, local companies are faring well overseas with the biggest recent development being the US$ 820 million Cairo Gate project – a JV between the two Dubai heavyweights, Emaar and the Al Futtaim Group. This will be a major retail and lifestyle development, covering 160 acres.

Arabtec continues to dabble abroad and has won a US$ 120 million contract to build Europe’s tallest residential tower in St Petersburg. No wonder their share value has doubled in a year – almost six times better than the Dubai Financial Market Index which has gone up 17.49% over the same period. This week, the market has risen over 3% from Sunday’s start of 1570 points to the closing Thursday bell at 1627.

Another positive indicator for the Dubai economy is the latest HSBC Purchasing Managers’ Index which has shown a monthly increase from August’s 53.3 to 53.8 at the end of Q3. This is noteworthy since any figure over 50 is positive news whilst most of the other global economies are on the south-side of this figure.

Although intimated in a recent blog that more banks will be cutting back, it still comes as a shock to see that HSBC will be closing down its Islamic banking operations in Dubai and moving them to Qatar and Malaysia. This is part of the bank’s strategy to improve its bottom line but its bottom may well be bitten because of this risky exercise.

Violent scenes reverberated around the streets of Athens as Greeks protested against proposed pension cuts, increasing consumer costs and higher taxes. Prime Minister, Antonis Samaras, has warned that the country will run out of money within weeks if the next tranche from the bailout loan of US$ 170 billion is not forthcoming. Currently delegates from the troika – the EU, ECB and IMF – are in the country assessing whether Greece has fulfilled the terms for receiving further funds totalling US$ 43 billion.

Luis de Guinda, Spain’s Economy Minister, has reiterated that his country does not require a bailout. Passionate protests met his latest budget that cut US$ 17 billion whilst an independent audit estimated that Spanish banks would need US$ 77 billion to survive a serious downturn. With its head in the clouds, Mariaono Rajoy and  his government still consider that the country is in no need of a bailout despite an ever shrinking economy and 1 in 4 of the populace  unemployed.

Compared to these two struggling countries – as well as most other countries – it can be seen that at least for Dubai, Happy Days Are Here Again!