We Will Rock You!                                                                             31 May 2024

Data from the Dubai Land Department indicates that, in the twelve months to 31 March, there was a 5.8% rise in the number of rental registrations to over 159.9k, split between a 12.3% growth in renewed rental registrations, compared to a 4.1% decline in new contracts. A CBRE report noted many residents are not prepared, or are able, to pay higher rates on new leases, with one of the main factors being the lack of available stock, particularly in prime and core residential areas. In March, average residential rents reported an annual increase of 21.2%, 0.8% higher than a month earlier; over the period, average apartment and villa rents grew by 22.1% and 14.5%, with median rents of US$ 33.6k and US$ 93.9k. In line with other analysts, CBRE expects “residential rents will continue to increase; however, not at the same rate that we have been seeing to date, and we expect that the rate of change will diminish in the second half of the year.” Cushman & Wakefield reported that 2023 and 2022 rents had risen by 19% and 27% – an indicator that they were slowing. The RERA rent calculator was recalibrated on 01 March to become more representative of open-market pricing; it uses criteria such as location, property type, current rent and number of rooms and works by comparing properties with similar ones nearby. Previously, many tenants opted to stay because rental increases during renewals tended to be much lower, compared to signing new leases, but several renewing this year will face higher rent due to the adjustment in RERA’s calculator. Q1 price increases were up 20.7% – villas and apartments by 22.1% and 20.4%. As of March, mean apartment prices stood at US$ 405 per sq ft, and average villa prices reached US$ 484 per sq ft, with standard villa sales rates currently 22.9% above their 2014 baseline. In Q1, of the 6.5k residential units delivered, 59.7% were located in Meydan One, Jumeirah Village Circle and Al Furjan, with a further 46.1k expected by the end of 2024, of which 31.4% will be delivered in three areas – District Seven, Damac Lagoons and Business Bay. CBRE estimated that only a limited portion of this upcoming stock will come online as planned.

This week, Danube Properties announced the handover of its Pearlz project some six months ahead of schedule. Located in Al Furjan, with a built-up area of 480.2k sq ft, the project has three hundred units — studios, one-, two-, and three-bedroom apartments — and retail outlets. The Dubai-based developer has already delivered numerous projects in the emirate, including Jewelz, Wavez, Elz, Lawnz, Bayz, Miraclz, Glamz, Starz, Glitz 1, Glitz 2, Glitz 3, and Dreamz. Danube Properties also offers homeowners a ten-year Golden Visa – especially those who qualify as per the investment criteria – subject to government approval. Founder and Chairman, Rizwan Sajan, noted that “the Dubai property market has a long way to go. It is highly affordable and, at the same, it offers one of the best returns on investment also both in terms of rentals and capital appreciation. With population outpacing supply in the market, the property outlook for Dubai is highly optimistic and promising.” It is difficult to disagree with him.

Local property brand Binghatti has launched its latest project, One by Binghatti, located in Dubai’s Business Bay district. The latest mega waterfront development, with views of Burj Khalifa and the Dubai Water Canal, is located in Business Bay near other Binghatti branded residences including Binghatti, Mercedes Benz Places, as well as Binghatti, and Burj Binghatti Jacob & Co Residences. The project features adult and children swimming pools and a variety of athletic facilities including basketball, paddle, tennis and street football. Amongst the project’s rejuvenation facilities are a jacuzzi, sauna, steam room and a state-of-the-art health club. The project amenities also extend to outdoor facilities, including sunken seating, a running lane, and viewing deck.

This week, Acube Developments launched its second project Electra, a thirty-eight-storey residential tower in Jumeirah Village Circle, including two hundred and seventy-eight studio, 1 B/R, 2 B/R and 3 B/R apartments, all equipped with Bosch appliances and Roca sanitary items. All units are installed with the latest smart home solutions and come with the option of three fully furnished options. Anyone buying 2 B/R apartments will also be offered large terrace pools, (4.6 mt by 1.8 mt). Studio apartment prices start at US$ 205k, with construction starting in June and handover slated within three years. The facilities include a beach themed pool, private pools, a mini-water park with slides, a mini golf area, a bowling alley, an indoor and outdoor play area, an indoor and outdoor Jacuzzi, an indoor children’s cinema, and picnic areas. The 37th and 38th floors cater to adults and include a gym, yoga and aerobics rooms, cinema, sauna, and steam rooms, while the 38th floor hosts a large, 18 mt long sky pool. It will also have commercial spaces for shops and other services.

According to Knight Frank, The Islands registered more than 10% of all the deals valued at over US$ 2.72 million, (AED 10 million), over the past three years. Last December witnessed the sale of the most expensive home, at US$ 7.63 million, to sell in the man-made island cluster; the four-bedroom 5.5k sq ft home equates to a value of US$ 1.39k per sq ft. Over the past twelve months, ninety-seven homes were sold with a cumulative value of over US$ 272 million. The consultancy’s regional partner commented that “the growing list of prime residential neighbourhoods is yet another sign of maturity bedding in and it is only a matter of time before other areas such as Tilal Al Ghaf, Jumeirah Golf Estates, Al Barari and/or Blue Waters also make the transition to prime status.”  Because of the current high demand for residential units on Jumeirah Islands, the number of homes available for sale has declined by 28%, over the last twelve months, to 279 homes, adding to the 44% decline in prime home listings in the emirate to around 4.9k properties.

According to reports from the UN Tourism 50th Regional Commission Meeting for the Middle East in Muscat, the UAE expects that by 2031 to attract US$ 27.25 billion in new investment to the tourism sector, accounting for 12.0% of UAE’s GDP, and welcome forty million guests to the country’s hotels. Last year, the tourism sector contributed US$ 60.0 billion, equating to 11.7%, to the country’s GDP, expected to rise to US$ 64.30 billion.  This year, the sector expects employment to reach 833k, (equating to one in nine of all jobs in the country), operating in 1,235 hotels in the UAE, with a total of 210k rooms. With domestic visitor spending fully recovered in 2022, 2023 witnessed further growth in 2023 to reach more than US$ 15.12 billon – almost 40% higher than 2019. International visitor spending surged by almost 40% last year to top US$ 47.68 billion – 12% above 2019 levels. This year and 2025 will see thirty-one and sixteen new hotels opening in the emirate, bringing the number of establishments, by 31 December 2025, to eight hundred and sixty-seven. Currently, Dubai has 150.3k rooms.

In Q1, Dubai attracted 5.18 million international visitors, after welcoming 17.15 million overnight visitors in 2023, compared to 14.36 million a year earlier and the previous record year of 16.73 million in pre-pandemic 2019. The World Economic Forum’s Travel & Tourism Development Index ranked the UAE first in Mena and eighteenth globally in 2024 – seven places higher than the previous 2021 report. The report ranks one hundred and nineteen economies based on a set of factors, and the index consists of five sub-indices, including the enabling environment, travel/tourism policy and infrastructure, infrastructure/services, travel/tourism resources such as nature and culture, and the sustainability of the travel and tourism sector. Industry experts said the upcoming unified GCC visa would allow member nations to present the region as a connected destination, boosting accessibility and driving KPIs such as length of stay, average spend and employment. Accessibility, within and between the Gulf nations, will also benefit from huge capex in the region’s infrastructure in roads, airports, cruise terminals and ‘the new kid on the block’ – the upcoming GCC Railway.

Latest figures from the Ministry of Economy noted that last year, the country’s GDP rose by 3.6%, on the year, to US$ 457.8 billion at constant prices, with the non-oil GDP 6.2% higher at US$ 340.6 billion. The Minister, Abdullah bin Touq Al Marri, commented that “these figures solidify the UAE’s position as the fifth-largest economy globally in terms of real GDP growth index. Moreover, the UAE ranks among the top ten economies globally across various competitiveness indicators tied to GDP.” He added that “the accomplished indicators and notable outcomes underscore UAE’s progress in achieving the objectives outlined by the ‘We the UAE 2031’ vision, which aims to elevate the country’s GDP to AED3 trillion, (US$ 817.4 billion) within the next decade and foster a shift towards a new economic model centred around diversity and innovation.” Interestingly, the UAE’s contribution of non-oil sectors came in 2.5% higher on the year to reach a record 74.3% Last year, various economic sectors registered double digit growth on the year including financial activities/insurance, up 14.3%, and transport/storage activities at 11.5% higher, (attributable to a significant increase in airport passengers, with the total number of international visitors surging 25.0% on the year to 31.5 million), and hotel guests rising 11.0% to twenty-eight million.  Meanwhile, construction/building and real estate activities grew by 8.9% and 5.9%, whilst the residency/food services sector witnessed a 5.5% hike. At current prices, the GDP was up 2.3% to US$ 512 billion last year, with non-oil GDP, 9.9% higher, reaching US$ 390 billion. The country also performed well in various GDP-related global competitiveness indicators, being ranked fifth worldwide in the Real Economic Growth Rate Index, sixth in GDP (PPP) per capita in the IMD World Competitiveness Yearbook 2023, and sixth in the GNI Index, in the UNDP Human Development Index Report 2024.

With the UAE intensifying its efforts to expand its domestic manufacturing capabilities and boost self-sufficiency, Dr Sultan Al Jaber, Minister of Industry and Advanced Technology, speaking at the third Make it in the Emirates forum, advised that the country’s industrial sector will receive an additional US$ 6.27 billion in funding, backed by two of its major companies. Adnoc announced that it will contribute US$ 5.45 billion, with Pure Health, the country’s largest healthcare group, chipping in with US$ 820 million. This latest development sees the total funding, for the sector, to date, now totals US$ 38.96 billion, being utilised to support the domestic manufacturing of more than 2k products. In co-ordination with Emirates Development Bank, and other commercial banks, a new lending programme, worth US$ 300 million to support SMEs, was introduced. EDB will also provide financing worth US$ 100 million to support AI start-ups, in a boost to the fast-growing technology. The Minister commented that “AI has become the backbone of next-gen industrial innovation. AI doesn’t just automate tasks; it redefines them, paving the way for smarter, safer and more sustainable operations.”

At the 121st meeting of the GCC Financial and Economic Cooperation Committee in Doha, the UAE and Qatar signed an agreement to avoid double taxation and prevent fiscal evasion of income taxes. According to Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs, the deal will not only enhance financial, economic and investment partnerships, between the UAE and Qatar, but also bolster coordination and cooperation in tax matters, open up new investment opportunities, and stimulate trade. He also pointed out that the agreement contributes to strengthening economic and trade relations between the two countries and provides full protection for companies and individuals from direct and indirect double taxation. To date, the UAE has signed one hundred and forty-six double taxation avoidance agreements to date, as well as having signed one hundred and fourteen pacts to protect and promote investments.

Seven months after talks had started last October, the UAE and South Korea, (Asia’s fourth biggest economy), formally signed a Comprehensive Economic Partnership Agreement (CEPA) on Wednesday, aiming to expand trade and enhance cooperation in a wide array of areas from energy to supply chains. The event came in line with UAE President Mohamed bin Zayed Al Nahyan’s two-day visit to South Korea, which started the previous day, for a summit with President Yoon Suk Yeol. Under the agreement, the two countries will lift tariffs on more than 90% of goods traded over the next ten years. The CEPA will gradually eliminate the 3% tariffs on crude imports from the UAE, which currently accounts for 11% of South Korea’s total crude imports, over the next decade. The two countries are anticipated to bolster exchanges in energy, supply chain, digital and biotechnology sectors to seek future-oriented economic cooperation through the CEPA. It marks the first time South Korea has clinched a free trade agreement with a ME nation; the UAE is South Korea’s fourteenth-largest trade partner – and second in the ME, after Saudi Arabia. South Korea becomes the latest nation to sign a ‘UAE CEPA’, following Cambodia, Colombia, Congo-Brazzaville, Costa Rica, Georgia, India, Indonesia, Israel, Kenya, Mauritius, Turkey and Ukraine.

The Federal Tax Authority (FTA) has issued a guide outlining the application of Corporate Tax to Free Zone Persons, in line with the Free Zone Corporate Tax regime, which enables Qualifying Free Zone Persons to benefit from a 0% Corporate Tax rate on Qualifying Income. It provides an overview of the conditions required to be met for a Free Zone Person to be a Qualifying Free Zone Person and benefit from the 0% Corporate Tax rate, and the activities that are considered Qualifying Activities and Excluded Activities for a Qualifying Free Zone Person. The guide also includes an explanation of the calculation of Corporate Tax for Free Zone Persons, determination of Qualifying Income, and determination of taxable income that is subject to the 9% rate of Corporate Tax. In addition, the guide outlines the conditions for maintaining adequate substance for Qualifying Free Zone Persons and the criteria for determining a Foreign Permanent Establishment or a Domestic Permanent Establishment. Furthermore, the guide clarifies the treatment of income derived from immovable property, as well as the treatment of income derived from Qualifying Intellectual Property. The Guide also included a detailed explanation of Qualifying Activities, Excluded Activities and compliance requirements. The FTA added that where a Qualifying Free Zone Person operates through a Permanent Establishment in the UAE (outside the Free Zones), or in a foreign country, the profits attributable to such Permanent Establishment will be subject to the 9% Corporate Tax rate.

DP World and Saudi Ports Authority (Mawani) have commenced construction of a new US$ 250 million logistics park, encompassing 415k sq mt, at the two-year old Jeddah Islamic Port, set to provide state-of-the-art storage and distribution facilities, as well as boost trade in the Kingdom of Saudi Arabia and the wider region. The greenfield facility, set to become the country’s largest integrated logistics park, will feature 185k sq mt of warehousing space and a multipurpose storage yard, with a capacity for more than 390k pallet positions. Development will be in two phases. Established in 2022, as part of a 30-year concession, Jeddah Logistics Park will be developed in two phases, with a planned opening in Q2 2025. Another collaboration between the two parties includes the management of South Container Terminal, through a separate thirty-year concession signed in 2020; the final phase of a comprehensive modernisation project is scheduled for completion by year-end, at which time the handling capacity will have been ramped up to five million twenty-foot equivalent units. These two DP World projects represent a combined investment of almost US$ 1.0 billion. The groundbreaking follows on the heels of the opening of freight forwarding offices in Dammam, Jeddah and Riyadh, expanding the logistics footprint of DP World and strengthening end-to-end supply chains in the Kingdom of Saudi Arabia and beyond.

Eight years ago, the federal government liberalised fuel prices so that they could be aligned with market rates until the onset of the pandemic which saw prices frozen by the Fuel Price Committee. In March 2021, prices were amended to reflect the movement of the market once again. With prices having risen for the previous four months to 31 May, June finally sees a decline across the board. The breakdown in fuel price per litre for June is as follows:

• Super 98: US$ 0.856, from US$ 0.910 in June (down by 6.0%)         YTD from US$ 0.768 – 11.5%

• Special 95: US$ 0.823, from US$ 0.877 in June (down by 6.2%)       YTD from US$ 0.738 – 11.5%

• Diesel: US$ 0.785, from US$ 0.842 in June (down by 6.2%)               YTD from US$ 0.817 – 4.1%

• E-plus 91: US$ 0.804, from US$ 0.858 in June (down by 6.3%)            YTD from US$ 0.719 – 11.8%

Drake & Scull fell on hard times during the three-year oil price slump from 2014, which heavily affected the property and construction sector in the region, resulting in its shares being suspended in November 2018 after the company reported heavy financial losses. In 2022, it finally completed its restructuring plan, after the company achieved the required voting percentage from its six hundred-plus creditors for a consensual agreement. It posted losses of US$ 61 million and US$ 96 million in 2022 and 2023; at the end of 2023, it posted a 16.0% rise in revenue to US$ 26 million and had assets totalling US$ 97 million. In a filing this week, the company said accumulated losses stood at US$ 1.50 billion, as of 31 March. It expects the benefits of restructuring to materialise in Q2, leading to an overall equity improvement of about US$ 1.25 billion, and posted a capital gain of US$ 926 million by writing off 90% of creditor claims. Accrued interest expenses and provisions for legal cases, totalling about US$ 113 million, were reversed, and mandatory convertible securities amounting to US$ 100 million were issued.

The DFM opened the week on Monday 27 May, 148 points (3.9%) lower the previous fortnight shed 35 points (0.9%) to close the trading week on 3,978 by Friday 31 May 2024. Emaar Properties, US$ 0.07 higher the previous four weeks, shed US$ 0.04, closing on US$ 2.09 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.63, US$ 4.28, US$ 1.50, and US$ 0.35 and closed on US$ 0.62, US$ 4.24, US$ 1.50 and US$ 0.35. On 31 May, trading was at two hundred and thirty-four million shares, with a value of US$ 175 million, compared to two hundred and forty-five million shares, with a value of US$ 101 million, on 24 May 2024.  The bourse had opened the year on 4,063 and, having closed on 31 May at 3,978 was 93 points (2.1%) lower. Emaar started the year with a 01 January 2024 opening figure of US$ 2.16, to close YTD at US$ 2.09. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started the year on US$ 0.67, US$ 4.70, US$ 1.56 and US$ 0.38 and closed YTD at US$ 0.62, US$ 4.28, US$ 1.50 and US$ 0.35. 

By Friday, 31 May 2024, Brent, US$ 3.08 higher (0.1%) the previous week, shed US$ 0.27 (0.3%) to close on US$ 81.59. Gold, US$ 80 (3.3%) lower the previous week, gained US$ 12 (0.5%) to end the week’s trading at US$ 2,346 on 31 May 2024.

Brent started the year on US$ 77.23 and gained US$ 4.36 (5.6%), to close 31 May 2024 on US$ 81.59. Meanwhile, the yellow metal opened 2024 trading at US$ 2,074 and gained US$ 272 (13.1%) to close YTD on US$ 2,346.

April data from the International Air Transport Association (IATA) indicated that global Q2 air cargo markets demonstrated strong 11.1% annual growth in demand, measured in cargo tonne-kilometres – the fifth consecutive month of double-digit year-on-year growth. Capacity, measured in available cargo tonne-kilometres, rose by 7.1% on the year, (10.2% for international operations). IATA’s Director-General, Willie Walsh, noted that “while many economic uncertainties remain, it appears that the roots of air cargo’s strong performance are deepening. In recent months, air cargo demand grew even when the Purchasing Managers Index (PMI) was indicating the potential for contraction. With the PMI now indicating growth, the prospects for continued strong demand are even more robust.”

Mining giant BHP has pulled out of its planned takeover of rival Anglo-American, having been attracted by Anglo’s copper assets, with the metal rising in value because of its role in the green energy transition; discussions had been going on for about six weeks before the deal finally collapsed on Wednesday , as Anglo rejected BHP’s calls to extend talks as it was “unable to reach agreement with Anglo American on our specific views in respect of South African regulatory risk and cost”; it seems that Anglo American rejected the extension plea, arguing that the deal terms were still not good enough – the initial offer made by BHP, at the end of April was US$ 39.58 billon, then US$ 43.28 billion and finally US$ 49.13 billion. Anglo American rejected the extension plea, arguing that the deal terms were still not good enough. LSE will be breathing a sigh of relief as it was in danger of losing one of its finest assets at a time when several listed companies have left for foreign shores.

The Federal Aviation Administration has extended a ban, initially initiated in February, for the “next few months”, restricting Boeing on the number of 737 Max planes.  This came after the US watchdog met with outgoing chief executive Dave Calhoun and other senior figures at the company where the plane maker continues to be subject to “enhanced oversight” by regulators, after part of An Alaskan Airlines’ fuselage blew out in January, followed by a series of other incidents. It also noted that the regulator did not expect Boeing to win approval to increase production “in the next few months” and said it faced a “long road” to address safety issues. The FAA said it would continue with weekly meetings and other scrutiny of the company, adding that “regardless of how many planes Boeing builds, we need to see a strong and unwavering commitment to safety and quality that endures over time. This is about systemic change, and there’s a lot of work to be done.” It is reported that the plane maker is currently producing significantly fewer than the thirty-eight 737 MAXs per month it is permitted to by the FAA.

After a rather chequered recent history, Abercrombie & Fitch, founded in 1892, is once again making headlines for the right reasons. One century after the retailer’s founding, Mike Jeffries took over as CEO in 1992 and, within a decade, he had transformed A&F from a “fashion backwater”, losing US$ 25 million yearly, to a lifestyle brand grossing over US$ 2 billion by the early 2000s. Known in the 90s for appealing to teens, and infamous for its shirtless models,  and since Jeffries left in 2014, the company is now going after grown-ups with wedding-wear, work appropriate offerings and wide leg, baggy jeans. Last year, Abercrombie & Fitch saw revenue surging over 16.0%, with another double-digit jump expected this year. This complete turnaround has seen its shares rocket from US$ 25 per share at the start of 2023 to its current level of US$ 189, with the firm posting a 22%, year on year, jump in Q1 revenue to a record US$ 1.0 billion.

There is no doubt that the iconic boot-maker, Dr Martens, is struggling, as it posted a 43% slump, to US$ 123 million, in annual profits, for the twelve months to 31 March,  following a “challenging year” for the business; revenue came in 12.0% lower at US$ 1.12 billion. The main driver behind these disappointing figures appears to be a 17% fall in sales of its boots in the US, with its chief executive, Kenny Wilson, noting “We are clear that we need to drive demand in the USA to return to growth”. In contrast it notes that its performance in Europe, the ME, Africa and the Asia-Pacific region as “robust”. The company said it aimed to make savings of up to US$ 32 million via “organisational efficiency and design, better procurement and operational streamlining” to help revive its fortunes. Founded in 1960, it made its FTSE 250 index listing in January 2021 but since then its market cap has slumped by a worryingly high 80%.

The board of the company that owns Royal Mail, founded in 1516, has agreed to a formal US$ 6.36 billion takeover offer by Czech billionaire Daniel Kretinsky, which will include retaining the name, brand and UK headquarters, assuming debts, respecting the unions’ demands for no compulsory redundancies (until 2025), negotiating with the Communication Workers Union to extend that commitment and protecting employee benefits and pensions, for its 150k payroll. Although the initial news is positive, there is every chance that Business Secretary Kemi Badenoch, may decide to scrutinise and potentially block the deal; Chancellor Jeremy Hunt has weighed in by noting that any takeover bid for Britain’s Royal Mail would be subject to “normal” national security scrutiny, but it would not be opposed in principle. Parent company, International Distribution Services, made a small profit last year which was entirely generated by its German and Canadian logistics and parcels business, off-setting losses in the UK. Royal Mail, which is legally obliged to deliver a one-price-goes-anywhere “universal service”, (meaning it has to deliver letters six days per week, Monday to Saturday, and parcels Monday to Friday), has seen volume of letters halving since 2011, whilst parcel deliveries have become more popular – and more profitable. The next stage is for the September AGM to vote on the deal before it undergoes further government approval. The Czech entrepreneur, who owns 10% of Sainsbury’s and 27% of West Ham FC, made his fortune in the energy industry but has since diversified his interests into retail and logistics.

One of Britain’s biggest housebuilders is exploring a US$ 1.26 billion takeover bid for Cala Group, a rival player in the sector, which has been put up for sale. The potential buyer, Persimmon, with a market cap of US$ 6.04 billion, and the UK’s third-largest housebuilder behind Taylor Wimpey and Barratt Developments, is seen as an early favourite to acquire Cala, whose homes have a significantly higher average sale price; over the past twelve months, the company’s share price has gained over 20.0%. Cala is being auctioned by Legal & General next week, with other interested parties being Persimmon’s larger rival, Taylor Wimpey, and Avant Homes, which is owned by Elliott Advisors and Berkeley DeVeer. Both Persimmon and Taylor Wimpey were among eight housebuilders named by the Competition and Markets Authority in February over suspicions they had exchanged commercially sensitive information.

Not one to take half measures, the El Sisi government has announced sharp tax increases for the current 2024-25 tax year, with tax revenue projected to rise by 32% to US$ 42 billion, after growing 38 % a year earlier. There were marked increases of 32.4% in VAT, (112% higher over the past four years), and 31.6% in income taxes, (including a 26.4% hike in taxes and government workers’ salaries). This comes after the IMF, and other creditors, stipulated the introduction of austerity measures in return for more than US$ 50 billion in financial assistance.  With the Egyptian pound almost halving against the greenback, tax revenue from the Suez Canal will surge because of toll collections being made in US$. The fund had requested that the Egyptian state reduce public spending while maintaining a tight monetary policy to curb inflation and make room in the state-dominated economy for the private sector. To say that the Egyptian economy is in trouble is beyond doubt and the steep rise in tax coming on the back of food, fuel and education subsidies, along with other austerity measures will inevitably stir civil unrest.

It was a well-known fact that when Australian capital city rents started to peak, there was always some reprieve with lower, more affordable rents found in its regional areas. But times are changing as real estate analysts CoreLogic indicated that rents in 75% of Australia’s biggest regional areas were now higher than ever, and there not a single major regional centre that recorded a significant fall in rental prices. The biggest increases were noted in Batemans Bay, in New South Wales, (with Q1 rents 6.0% higher, equating to US$ 21.30 a week), WA’s Bunbury and Queensland’s Sunshine Coast, both registering 4.0% quarterly rises. The consultancy noted that rental prices rarely went backwards unless forced down by an economic slowdown, but the current increases were still unusual, “rising at a pace much faster than the sort of typical pace, pre-pandemic.”

Nationwide posted that May UK house prices were up 0.4% on the month to US$ 337.1k, and 1.3% higher on the year – an indicator that the housing market is showing signs of “resilience”, despite ongoing affordability pressures as a result of historic high interest rates and surging inflation. However, it seems that consumer confidence has headed north over the past few months with wages moving higher and inflation lowering – last month it had fallen to 2.3%, its lowest level in nearly three years.

The Institute for Fiscal Studies warns more tax rises and/or cuts to public services could lie ahead if whatever government is elected next month does not keep a cap on public spending. Both Labour and the Conservatives have committed to get debt falling as a share of national income. The think tank claims that high interest payments on existing debt, allied with low expected economic growth, could make reducing future debt more difficult to achieve. To meet existing rules, the current chancellor, Jeremy Hunt, had already pencilled in what could amount to potential cuts in funding for some public services – such as justice or higher education – of more than 10% in coming years, once population growth and inflation is taken into account. The IFS says that barring a dramatic improvement in growth, the next government could face three broad choices – to go forward with the spending squeeze for services, raise taxes further or increase annual borrowing – which could risk preventing total debt from falling.

The IMF, not known for its forecasting, has recommended that the UK should cut interest rates by 1.75% to 3.50% by the end of 2025, including dipping to between 4.50% – 4.75% before year-end; that would normally mean seven rate cuts over a period of eighteen months. The global body also upgraded this year’s growth forecast, by 0.2% to 0.7%, whilst advising against any further cuts, as well as commenting that the UK will grow faster than any other large European country; 2025 growth is expected to touch 1.5% next year. In line with many other observers, the IMF sees the BoE’s 2.0% target almost being met in the short-term before rising a little over the course of the rest of the year, before “durably” settling at the target rate in early 2025. It also warned of the dangers to the UK economy, advising that the Bank had to balance the risk of not cutting too quickly before inflation is under control, against that of keeping rates too high, which could hit growth. IMF MD, Kristalina Georgieva said that the UK needed to bolster its public finances, which were hit by heavy spending during the Covid pandemic, and that given the state of the public finances, the IMF said it would “advise against additional tax cuts”.

One worrying note from the IMF report was its long-term concern of a lack of workers, arising from long-term illness and fewer foreign workers, and cited that if there was a new global financial crisis, “a shock to UK sovereign risk premia cannot be ruled out” which would push up interest rates. It also suggested that extra tax revenue from road usage, VAT, inheritance and property should be required, and advised the government to abandon its much-talked about triple lock on the state pension – and instead just to peg increases to inflation alone. After Rishi Sunak had back-tracked on some of his previous environmental pledges, for example on electric cars, the global body managed a sideswipe, advising the government to “stay the course on climate policy”. But economic forecasters are not always right with their predictions, and this could be another case when the IMF and UK government agree to differ.

There are reports that Sony Music is in discussions to buy the music catalogue of the rock band Queen, and is working with Universal Music on the transaction, which “could potentially total US$ 1 billion”. If it goes ahead, the deal would cover Queen’s songs and all related intellectual property – including the rights to logos, music videos, merchandise, publishing and other business opportunities. In 1972, the band signed with the British label EMI and remained with that company after it was bought by Universal in 2011. If this were to materialise, it would dwarf similar deals involving the likes of Bruce Springsteen, (with Sony paying US$ 500 million for his catalogue in 2021) and Michael Jackson.  Over the last eight years, the likes of David Bowie, Bob Dylan, Justin Bieber, Shakira, Neil Young, Blondie and Fleetwood Mac have been involved in multi-million deals for their musical catalogues.

There is no doubt of the band’s popularity, even though its front man died in November 1991. Spotify estimates that Queen has fifty-two million listeners every month compared to The Boss’s twenty million and the King of Pop’s forty-one million. In the UK, the first volume of Queen’s Greatest Hits is the most popular album of all time, with sales in excess of seven million copies. It was even the twentieth-biggest seller of 2023, beating new releases by Ed Sheeran and the Rolling Stones. According to its most recent financial statements, Queen Productions Ltd made $52 million in the year ending September 2022. If the sale were to go ahead, the proceeds would be shared equally between guitarist Brian May, drummer Roger Taylor, bass player John Deacon and the estate of late singer, Freddie Mercury. The band own the rights for the rest of the world, and also retain the global publishing rights – the copyright for the music and lyrics. The fact that Queen is in this position proves that, with hits such as  Bohemian Rhapsody, Radio Ga Ga,  A Kind of Magic and Another One Bites The Dust, they can still honestly say We Will Rock You!