The next chapter in the history of the QE2 has been written with news that it is currently being converted into a luxury floating hotel at Drydocks World. In October, it will set sail for Singapore and from there to Hong Kong, before berthing in an unnamed Chinese shipyard for final renovations prior to beginning its new life in the Far East.

The warning bells are already ringing as a recent report indicated that Dubai rents jumped a frightening 18.3% in Q1 – even more staggering when the likes of London, New York and Hong Kong actually slumped by 3.1%, 2.6% and 2.3% over the same time-frame. Yet another report showed year on year growth to June for apartments up by 38% and villas 24% with rental returns climbing 20% and 17% for these two categories.  There is no way that this trend can continue without an asset bubble eventually becoming a reality.

However, it appears that the two major local property developers are both confident that the upturn shows no sign of waning and is sustainable. Emaar has announced that over 95% of all units, launched in the past eighteen months, have been sold with total sales this year reaching US$ 1.23 billion, compared to just US$ 327 million in the corresponding 2012 period. In total, the company unveiled 1,050 units last year and a further 2,120 so far in 2013. It is interesting to note that forecast deliveries for the next three years are 749, 539 and 533 – a total of just 1,821!

Nakheel has announced H1 profits of US$ 327 million (up 57% on the corresponding period last year) on a 36% increase in Revenue to US$ 1.15 billion. This year, it hopes to place a total of 3,000 units, having already delivered 1,600 residences in H1.

It is surprising to note that JLT now houses 65,000 people – in their 65 tower blocks – who either live or work in the mushrooming complex. By the end of Q3, the DMCC should become Dubai’s largest free zone with registered companies reaching 7,000. What is good news for the Dubai economy is that 95% of the 1,200 companies registered this year were new to the emirate. On the flip side, office rentals have risen 75% over the past twelve months to US$ 306 per sq mt.

With the prospect of Dubai hosting the 2020 World Expo, Damac Properties have plans for a further 8,000 luxury serviced hotel apartments over the next six years. Their first foray into this sector was the 355-apartment, The Signature, which began handover last month.

The conundrum facing the realty sector is that despite all this activity, local banks’ mortgage books actually fell in Q1 by 2.9% from US$ 43.5 billion to US$ 42.5 billion. One of the side effects of the regional turmoil is that Dubai has become a safe haven resulting in money flooding in so that an estimated 80% of purchases are cash buyers. It has taken the local market some years to recover from the 2008 property crash and it can only be hoped that we are not watching history repeating itself.

On the retail front, it seems that Dubai is responsible for US$ 2.32 billion of luxury good purchases with a double digit increase slated for 2013. The emirate has an estimated 30% of the regional market, with up to 50% of the merchandise being sold in the Dubai Mall.

One project that has now been scrapped is the proposed Tiger Woods Dubai golf course, in partnership with Dubai Properties Group. There is no need to shed any tears for the now ebullient golfer since his company – ETW (Eldrick Tiger Woods) – had already banked US$ 55.4 million in 2008 for design and promotion work.  The world’s number one golfer will be in Dubai in February 2014 to participate in the Omega Dubai Desert Classic.

With its recent rights issue being 30% oversubscribed, Arabtec has seen 1.46 billion new shares (at US$ 0.41 per share) issued with a total value of US$ 654 million. At the end of the week, the company’s shares were trading at US$ 0.57, giving a market capitalisation of almost US$ 1.91 billion. In H1, the company booked projects valued at US$ 3.53 billion.

The Dubai Financial Market Index saw a Q2 4.5% rise in its market capitalisation to US$ 58.14 billion and a massive 82.4% hike in shares traded to US$ 10.4 billion, Meanwhile trade remains robust with the Index continuing to defy gravity and logic by posting a weekly gain of 7.6% from a Sunday opening of 2222 points to a Thursday close of 2392. In Q2, it had a 21.5% jump and so far this year, it has surged 53.64%. It may not be too long before this market runs out of steam.

Following HH Sheikh Mohammed bin Rashid’s recent directives in relation to setting up Dubai Smart Government, an agreement has been signed with the Department for Economic Development to provide support in upgrading shared IT services. The ruler’s vision of government excellence will ensure that all authorities and departments will work to best practices and that shared infrastructure and systems will benefit the whole community.

In their latest report, the IMF was effusive in their praise for the economic progress made by the UAE. It has highlighted the growth in tourism, the stability in real estate and the large amount of money pouring into the country as indicators of the growing local confidence.

Unemployment in the eurozone continues to rise with levels at 12.2% compared to the likes of Japan, Canada and USA at 4.1%, 7.1% and 7.6%. More alarming is the number of under-25s out of work with over 66% in Greece and Spain and 33% in Portugal, Italy and the Slovak Republic.

There was a sharp fall in German exports with its May trade surplus of US$ 16.7 billion well down on analysts’ estimates of US$ 22.6 billion. The country’s exports fell 6.5% to US$ 113.1 billion with imports lower by 1.6% to US$ 96.4 billion.

The Indian rupee continues to drop to historic lows of over 61 to the US$. Overseas fund managers are getting spooked by a combination of a domestic economy on the skids and expectations of Ben Bernanke scaling down economic stimulus measures in the US. A fall of almost 12% has marked the rupee as Asia’s worst performing currency this year – and there may be worse to come!

Two of the largest UK security companies, G4S and Serco, have been accused of overcharging the  government of tens of millions of dollars for tagging criminals – some of whom were dead or back in prison or out of the country. The former, still reeling from its 2012 Olympic debacle where it could not provide enough staff as part of its US$ 426 million contract, is being investigated further by the Serious Fraud Office. Last year, the company saw its government-related contracts surge 19.8% to US$ 550 million. Meanwhile Serco has agreed to an independent forensic audit and has, rather magnanimously, agreed to repay if it is found to have received too much!

Unfortunately, this sort of corrupt practice – whether it be governments, financial institutions or big business – is becoming increasingly common Here, There and Everywhere.