Dubai and the UAE economy is the most diverse in the GCC (Gulf Cooperation Council). For centuries, the country relied on oil and gas; however, the government has recently begun giving equal weight to all sectors. The move has assisted the government in increasing revenue and has resulted in impressive development in the tourism, retail, and manufacturing sectors. Some of the leading industries in Dubai and the UAE that have made significant contributions to the country's economy include:
Hospitality industry In Dubai
The Dubai hospitality industry is expected to grow exponentially, with thousands of new hotel rooms entering the market by 2021. Add in theme parks and restaurants, as well as the expected influx of tourists from the World Expo.
Dubai is optimistic about the future, thanks to $43 billion in major projects, a brisk hotel market, and rising visitor arrivals.
According to a new report, the value of Dubai's major projects, including unique hotels, resorts, and hotel apartments, reached US$43 billion during the first quarter of the year, up 6.1 percent from last year.
According to 'The Dubai Hospitality Construction Overview' produced by BNC Network for the construction industry mega event, The Big 5, there are 356 active hospitality projects across the Emirate, and hotel inventory is rapidly growing, with 17 new hospitality projects worth more than US$860 million delivered in Q1, 2018.
Furthermore, according to the report, 25 hospitality projects worth $2.2 billion currently in the tender stage are expected to be awarded in the coming months. These project movements show that the hospitality-related construction sector will continue to grow in 2018 and beyond.
Budget hotels require more budget-friendly rooms than high-end rooms to attract and diversify budget-conscious tourists. Furthermore, the emphasis should be on improving the customer experience through the effective use of technology.
The same cannot be said for mid-market hotels. Given the demand, investors can anticipate double-digit investment (around 10% to 12% per year) with the right product and location.
While current occupancy in the area is expected to be lower in the coming months, the forecast shows a significant increase in tourism over the next few years.
Real Estate Industry in Dubai
Dubai's real estate market responds quickly to changing demand, and the UAE's growing e-commerce sector creates significant opportunities in warehousing, industrial, and logistical real estate.
Real estate is a significant industry, accounting for 6.6% of Dubai's GDP in 2016. It experienced a boom in the early 2000s due to liberalization, an influx of expatriates, and significant investments by foreign investors. However, it was impacted by the global recession in 2008 and a drop in oil prices in 2014 but has since recovered due to government investments to make Dubai an appealing real estate market. Tourism expansion and rapid urbanization are the primary drivers of growth in the sector.
Global city status, excellent infrastructure, world-class facilities, and simple visa requirements are a few factors attracting international investors to the Dubai property market.
In 2016, Indians were the most prominent property investors in Dubai (AED 20 billion), followed by Saudis (AED 12 billion). The availability of housing loans has also boosted the Emirate's real estate market. Almost 17% of total bank loans in the Emirate went to the construction and real estate sector. As a result of EXPO 2020, the city is becoming an appealing real estate investment destination.
In 2018, real estate activities in Dubai generated AED 28.7 billion (US$7.8 billion), an increase of 7.0%, more than three and a half times the real GDP growth rate.
The following incentives entice investors:
- Foreigners can own 100% of their businesses.
- Visas valid for ten years for highly qualified individuals, investors, entrepreneurs, and executives
- A 5-year retiree visa for those over the age of 55.
- Increased spending on historical projects
The Economic Importance of Real Estate Activities
Dubai's real estate sector contributes significantly to GDP growth. The industry grew at a robust real rate of 7.0 percent in 2018, up from 6.9 percent in 2017. This rapid growth, which outpaced GDP growth of 1.9% in the same year in constant prices, increased the contribution of real estate activities to real GDP from 6.9% in 2017 to 7.2% in 2018. The real estate sector also contributed nearly one-fifth of Dubai's total GDP growth in 2018, ranking second among the other key economic sectors. Despite its importance to the Dubai economy, the real estate sector employed only 1.6% of the total workforce in 2018. In 2018, the average labor productivity, measured by constant-price added per worker, was AED 648,971 per employee, ranking second among Dubai's major economic sectors.
Dubai real estate market size, trends and forecasts
The opportunity for the real estate sector is not only in physical structures but also in tenant health and well-being, social sustainability, inclusion and diversity, accessibility, and electric vehicle adoption.
The value of luxury Dubai residential property transactions increased by 25% in the first quarter of 2021 compared to the previous year. Buyers come from Europe, the United States, and the Far East. The firm currently represents "several well-known ultra-high-net-worth individuals, sports personalities, and leading names in the entertainment industry" who want to make Dubai their permanent home. For buyers with deep pockets, Dubai remains a place to look for bargains.
As the lockdown was lifted and 2020 ended, the Dubai real estate market experienced an unexpected surge. As the population of Dubai returned to the 'new normal after being fully vaccinated, the city quickly became the latest travel and investment destination. The influx of tourists and the government's encouragement of residency programs resulted in a massive amount of foreign investment as tourists considered property in Dubai. As the pandemic altered our lives, the real estate industry witnessed new trends and a shift in demand.
More end-users entered the UAE market, tenants sought more space, and mortgage rates were and continue to be at all-time lows. Purchasing a home became more feasible. This will continue into 2022 as prices return to normal after reaching all-time highs in 2021. Foreign investors will continue to recognize that, compared to other leading international cities, rental returns in Dubai are considered vital, averaging 4-5 percent net even in a down market. With low entry prices for freehold properties, high capital appreciation, and low mortgage rates, it remains a no-brainer as an investment destination.
Demand for luxury homes
Due to global travel restrictions and lockdowns, many high-net-worth individuals relocated to Dubai to take advantage of the city's infrastructure, resulting in a boom in luxury property in 2021. This was most visible in the luxury villa segment, where prices increased by 16.5 percent year over year, with 54 villas worth more than $10 million each sold by September 2021.
Organizations will continue to use a hybrid model as the omicron variant looms. As a result, buyers will continue to require space, facilities, and amenities in communities that provide amenities without sacrificing connectivity to entertain, raise a family, and work from home.
Governments, corporations, and individuals are all becoming more conscious of their responsibility to ensure a sustainable future. With buildings in urban areas accounting for nearly 40% of global carbon emissions, it is now the responsibility of all property developers to incorporate sustainable solutions into the development process, and for governments to implement legislation and incentives to encourage sustainable development opportunities, in line with the UAE's commitment to achieving net-zero emissions by 2050.
What comes next?
These trends indicate where the real estate market will focus in 2022. Over the next five years, community-based sustainable development will take center stage as the UAE, and the rest of the world align with global sustainability targets. Many of the solutions to climate concerns, such as zero net carbon output targets, energy efficiency, and renewables adoption, are held by the real estate sector. The opportunity for the real estate sector is not only in physical structures but also in tenant health and well-being, social sustainability, inclusion and diversity, accessibility, and electric vehicle adoption. The developments that implement this quickly and provide it to their tenants at the lowest cost will win.
Villas and townhouses saw the most significant increase in property value and demand, but there has also been a substantial increase in apartment sales compared to 2020, as shown below. This trend is expected to continue in 2022. I believe that the real estate market in Dubai, in particular, is maturing. Better regulation, buyer assistance, and low mortgage rates all contribute to a more end-user-focused market.
Long term, with the UAE government's emphasis on developing the manufacturing and industrial sectors, there will be a demand for highly skilled middle-class workers. This influx will result in more jobs, increased spending, and an ongoing need for housing to accommodate the population growth. Dubai's real estate sector is poised to grow steadily and attract more buyers, both locally and globally, thanks to a forward-thinking government, world-class infrastructure, and multi-cultural business environment.
UAE Real Estate Market - Growth, Trends, COVID-19 Impact, And Forecasts (2022 - 2027)
Overview of the Market
During the forecast period, 2022-2027, the UAE residential real estate market is expected to grow at a CAGR of more than 8%.
As a result of the COVID-19 pandemic, the residential real estate market came to a halt, as the government-imposed lockdowns and citizens were forced to stay at home. Nonetheless, experts predict that UAE residential property prices will continue to rise in 2022, owing to the support of economic reforms and an accelerated vaccination program that has aided in the recovery from the coronavirus-induced slowdown.
The UAE residential property market has recovered after a three-year oil price slump that began in 2014 due to oversupply concerns and the ensuing pandemic, as people move to larger homes with outdoor amenities and a surge in remote working and online learning. Furthermore, economic support measures and government initiatives, such as residency permits for retired and remote workers, as well as the expansion of the 10-year golden visa program, have aided in improving market sentiment.
Following the pandemic, demand for retail office space and residential real estate decreased immediately. However, in the years since, this trend has been significantly reversed. In recent years, the UAE government has expanded the real estate market for ex-pats, allowing for more investment. The concept of a five-year and ten-year residency visa, which can be obtained through real estate investments, has been introduced.
Scope of the Report
The UAE residential real estate market report provides insights with an overview of the economy and the market, the impact of the COVID-19 pandemic on the need, real estate buying trends - socioeconomic and demographic insights, government initiatives, regulatory aspects for the residential real estate sector, insights into the size of real estate lending and loan to value trends, a focus on technology innovation, startups and proptech in real estate, demand and for supply, and collection. The report also discusses the impact of COVID-19 in the short and long term.
The report also includes qualitative and quantitative data on key cities and segments by type (apartments/condominiums and villas/landed houses) (Dubai, Abu Dhabi, and Sharjah). In addition, the report includes company profiles to help readers understand the market's competitive landscape.
Key Market Trends
New Project Launches in Dubai are Expected to Boost the Market
According to statistics released by the Dubai Land Department, the real estate sector in Dubai is back in the spotlight, having overcome the COVID-19-induced uncertainties and showing vital signs of sustained growth (DLD). According to a survey of property analysts, Dubai house prices will rise by 3.0% in 2021 and 2.5% in 2022, compared to 1.1% and 2.8% three months ago.
According to the survey, the Dubai residential property market will remain stable for the next few years, with only a slight price increase. This indicates, on the one hand, affordability and, on the other, long-term growth. Dubai now has a favorable property investment climate, backed up by leading real estate players who are planning new projects. The Danube Group, for example, is one of them.
In Dubai, the off-plan housing segment is doing well.
Off-plan property sales in Dubai are expected to increase significantly in 2021. Off-plan property sales totaled AED 4.95 billion (USD 1.3 billion) in August 2021, with 2,599 sales transactions. This is the highest sales value for off-plan property sales in Dubai since December 2013, representing an eight-year high. It is also the highest monthly off-plan transaction volume since November 2019.
According to the report, Arabian Ranches 3 and Villanova had the most off-plan villa and townhouse sales. Arabian Ranches 3 sold 187 units, while Villanova sold 157. Tilal al Ghaf, with 79 units, Dubai South, with 58 teams, and Mohammed bin Rashid City, with 16 units, were also areas of interest.
Meanwhile, top areas for villas and townhouses in Dubai during August included Dubai Hills Estate, Arabian Ranches, Palm Jumeriah, Damac Hills 2, and Mohammed bin Rashid City. Off-plan apartments were most prevalent in Dubai Marina, Downtown Dubai, Palm Jumeirah, Business Bay, and Jumeirah Village Circle.
Furthermore, the average transaction price for off-plan property in Dubai increased by 53% yearly, rising from approximately AED 1.2 million in August 2020 to AED 1.9 million in August 2021. In August 2021, the median price for off-plan apartment sales was AED 1.1 million, a 48% increase from AED 745,500 in the same period the previous year. For March this year, the median price for off-plan villas and townhouses was around AED 1.8 million, up 12% from 1.6 million the last year.
The residential real estate market in the UAE is becoming increasingly competitive. Increased infrastructure spending, relaxed laws for foreign investors, new government initiatives to drive investment, and new project announcements are expected to bring about an overall development in the real estate sector, which will pique the interest of more investors. Aldar Properties, Emaar Properties, Nakheel Properties, Deyaar Properties, and Damac Properties are some of the major players in the UAE.
Big Real-estate Projects in Dubai
Burj al Khalifa 'At the Top SKY'
The Burj Khalifa (Khalifa Tower), formerly known as the Burj Dubai before its 2010 opening, is a skyscraper in Dubai, United Arab Emirates. With a total height of 829.8 m (2,722 ft, or just over half a mile) and a roof height (excluding antenna but including a 223 m spire) of 828 m (2,717 ft), the Burj Khalifa has been the world's tallest structure and building since its completion in 2009, supplanting Taipei 101.
The Burj Khalifa, which dominates the Dubai skyline, is a popular tourist attraction. Aside from being the tallest structure in the world, the Burj Khalifa also holds records for being the tallest freestanding structure in the World, having the most stories in the world, having the most occupied floors in the world, having the highest outdoor observation deck in the world, having the elevator with the longest travel distance in the world, and having the tallest service elevator in the world. The temperature difference between the Burj Khalifa's highest point and the ground level is nearly 15°C (59°C).
The Emirates Towers
The Emirates Towers is a building complex in Dubai that includes the Emirates Office Tower and the Jumeirah Emirates Towers Hotel, which are linked by "The Boulevard," a 9,000 m2 (96,875 sq ft) two-story retail complex. Sheikh Mohammed Bin Rashid Al Maktoum owns the building. The two towers, which stand 354.6 m (1,163 ft) tall to the tip and 241.4 m (792 ft) tall of occupied space, are the World's 51st and 11th tallest buildings, respectively.  The Emirates Towers complex is a symbol of Dubai and is located on Sheikh Zayed Road in Dubai, United Arab Emirates. The Emirates Office Tower was built by Al Ghurair Investment Group's construction wing, and the Emirates Hotel Tower was built by Ssangyong and BESIX subsidiary Six Construct. There are 400 rooms in the hotel.
The Jumeirah Palm
The Palm Jumeirah is an artificial island archipelago in the Persian Gulf in Jumeirah, Dubai, United Arab Emirates. It is part of a more significant development known as the Palm Islands, including Palm Jebel Ali and Palm Deira. It will add 520 kilometers to Dubai's shoreline (320 mi) if completed. As of 2017, its population was estimated at least 10,000 people.
Land reclamation was used to create the islands. Van Oord and Boskalis, two Dutch specialist companies, collaborated on the construction. The same companies also created the World. Palm Jumeirah's newest additions are the recently opened The Pointe, Club Vista Mare, and Nakheel Mall.
The Burj Al Arab
The Burj Al Arab is a luxurious hotel in Dubai, United Arab Emirates. It is one of the World's tallest hotels, managed by the Jumeirah hotel group, even though 39% of its total height is non-occupiable space. The Burj Al Arab is located on an artificial island 280 meters (920 feet) from Jumeirah Beach and is linked to the mainland by a private curving bridge. The structure's shape is intended to resemble a ship's sail. It has a helipad near the roof, which is 210 meters (689 feet) above ground.
The World Islands
The World Islands are a group of small artificial islands built in the shape of a world map in the Persian Gulf, off the coast of Dubai, United Arab Emirates. The World Islands are one of several artificial island developments in Dubai and are made primarily of sand dredged from Dubai's shallow coastal waters. The world's developer is Nakheel Properties and the project was conceived by Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum. Van Oord and Boskalis, two Dutch (joint venture) specialist companies, completed the construction. The Palm Jumeirah was also built by the same companies.
The construction of the 300 islands began in 2003 but was halted due to the 2007-2008 financial crisis. Even though 60% of the islands were sold to private contractors in 2008, development on most islands has yet to begin. Lebanon Island was the only island developed commercially as of July 2012, and it was used for private corporate events and public parties. Only two of the islands had been developed as of late 2013. Kleindienst Group announced the launch of "The Heart of Europe" project in January 2014; by February 2014, JK Properties, one of Kleindienst Group's brands, stated that the project was "well underway." The first of these islands will be developed by Kleindienst Group in Europe, Sweden, and Germany.
The Dubai Marina district is located in Dubai, United Arab Emirates. It is an artificial canal city built along a 3-kilometer (2-mile) stretch of the Persian Gulf coastline. It has a population of 55,052 as of 2018. The development will house more than 120,000 people in residential towers and villas when completed. It is on Interchange 5 between Jebel Ali Port and the area containing Dubai Internet City, Dubai Media City, and the American University in Dubai. This project's first phase has been completed. The Concord Pacific Place development along False Creek in Vancouver, BC, Canada, served as inspiration for Dubai Marina.
Because of its proximity to the open sea, the marina has seen numerous instances of marine wildlife (particularly whales and sharks) entering.
Jebel Ali Port
The Port of Jebel Ali, also known as Mina Jebel Ali, is a deep port in Jebel Ali, Dubai, UAE. Jebel Ali is the World's ninth busiest port, the largest artificial harbor, and the Middle East's most essential and busiest port by far. Port Jebel Ali was built in the late 1970s to supplement the Port Rashid facilities.
Outside of the United States, Jebel Ali has become the port most frequently visited by US Navy ships. A Nimitz-class aircraft carrier and several ships from the accompanying strike group can be accommodated pierside due to the depth of the harbor and the size of the port facilities. Because of the frequency of these port visits, semi-permanent shore-leave facilities (dubbed "The Sandbox" by US Navy service personnel) have been built adjacent to the carrier berth.
Industrial Zone of Jebel Ali
One of Dubai's oldest industrial districts is Jebel Ali Industrial Area. It's west of the Jebel Ali Port, south of Jebel Ali Village, east of Dubai Investments Park, and north of the Jebel Ali Free Zone Extension. Several industrial fires have occurred in the area.
Dubai information technology (IT)
With its innovative mindset and pro-business regulatory environment, Dubai is an ideal location for Information and Communication Technology (ICT) firms of all sizes. Dubai is an ICT hub connecting technology companies from around the world, with new-age entrepreneurs drawn to Dubai for its technological growth, futuristic outlook, and ease of business.
Dubai Internet City
Dubai Internet City is the largest technology company hub in the UAE. The new data centers will help these businesses by enabling technology integration across all business functions. On a larger scale, they will help the government's goal of making Dubai the smartest city in the world.
Dubai Internet City (DIC), which opened in 1999, is a Free Zone that provides a knowledge economy ecosystem designed to facilitate the development of ICT companies. As the Middle East's largest ICT hub, DIC offers a complete ecosystem for large and small Information and Communication Technology companies, promoting innovation and Dubai's economic diversification plans. Over 25,000 professionals and entrepreneurs work at more than 1,600 tech companies in DIC today.
IT hub of Dubai
According to recent research, the UAE ranks first among its peers in the Middle East and Africa. Fitch Solutions published a report in January 2019 stating that the UAE has the most appealing IT sector in the region.
"The UAE's IT market remains buoyed by economic diversification efforts outlined in the country's Vision 2021 strategy, as well as demand from the enterprise, retail, and construction sectors ahead of Expo 2020 Dubai," they wrote. Fitch noted that investments in smart city initiatives, with Dubai being one of the leading destinations, were also driving this growth, as were efforts to diversify their economies through development in sectors other than oil and natural gas exports.
International Data Corporation (IDC), a Boston-based consulting firm, predicted that the Emirati software and IT services sector (which includes consultancy services, education, hardware and software support, and outsourcing, among other things) would grow by 8% in 2020, despite slowed telecom forecasts. This sector was expected to experience the most rapid growth in the UAE's telecom industry.
What are some other trends to watch as the IT industry and the number of jobs it creates expand in the coming years? One area will undoubtedly be Artificial Intelligence (AI), as the UAE will benefit the most from its implementation, with PriceWaterhouseCoopers (PwC) projecting that AI will contribute 14.5% of the country's GDP by 2030. Along with AI, other trends to watch in the UAE include the cloud, particularly the public cloud, and cybersecurity.
Dubai Logistics Industry Overview
Dubai is well established as one of the World's leading trade and logistics hubs, thanks to its cutting-edge transportation infrastructure and unrivaled geographical location at the crossroads of East and West.
The logistics industry in Dubai is a significant and rapidly growing sector of the UAE economy. Mordor Intelligence predicts it will be worth US$31.41 billion by 2026, up from US$19.65 billion in 2020, representing an 8.41% compound annual growth rate (CAGR).
UAE Logistics Market: Industry Trends, Share, Size, Growth, Opportunity,
COVID-19 Impact, and Forecast 2022-2027
The UAE logistics market grew at a CAGR of around 5% between 2015 and 2020, according to IMARC Group's latest report, "UAE Logistics Market: Industry Trends, Share, Size, Growth, Opportunity, and Forecast 2021-2026." The market is expected to maintain its moderate growth rate between 2021 and 2026.
The UAE regularly monitors the direct impact of COVID-19 on the market and the indirect impact on related industries. These findings will be incorporated into the report.
Managing the acquisition, storage, and transportation of resources to their destination is referred to as logistics. Inventory management, material handling, inbound and outbound transportation, and warehousing are all part of it. It contributes to increased operational efficiency, the preservation of supply chains, and the reduction of overhead transportation costs. Logistics is widely used in the UAE's manufacturing, consumer electronics, healthcare, and food and beverage (F&B) industries.
The growing popularity of e-commerce platforms is one of the key factors bolstering the UAE logistics market. Aside from that, an increase in international trade activities propels the country's market. Furthermore, leading players are emphasizing the incorporation of advanced technologies such as artificial intelligence (AI), blockchain, and the Internet of Things (IoT) (IoT). This, combined with the introduction of material handling equipment and the increasing adoption of GPS-enabled and radio-frequency identification (RIFD)-based devices, is expected to drive market growth in the country.
Growing E-Commerce in the United Arab Emirates
According to a joint study by Dubai Economy and global payments technology company Visa, which ranks first on Forbes' list of the World's Best Regarded Companies, the United Arab Emirates is making rapid strides as the fastest growing e-commerce market in the Middle East and North Africa (MENA).
E-commerce is growing as digital becomes the future in the United Arab Emirates. High internet usage, accompanied by smartphone penetration, is one of the primary driving forces of growth in the UAE e-commerce market.
A significant advancement in digital technology has resulted in a dramatic increase in the country's active mobile internet users. The government has a world-record high of 210.9% mobile phone penetration. Regarding spending time on the internet and social media, UAE residents rank among the top ten in the world, averaging seven hours and 54 minutes per day.
To that end, the government has implemented several initiatives, such as the wage protection system. Furthermore, the Smart Dubai 2021 initiative includes a digital, lean, connected "paperless, cashless government, powered by cutting-edge, disruptive technologies, defining the government of the future now."
COVID-19 is boosting the UAE eCommerce industry as consumers shift their shopping habits, preferring to buy online rather than in physical stores. This rapid expansion of e-commerce is driving investments in e-commerce logistics infrastructure and technology to support the development of e-commerce.
Growing Pharmaceutical Industry in UAE Driving Logistics
Pharma Industries have focused on UAE business development over the last decade. The UAE is quickly becoming a source market in the supply chain, manufacturing and exporting pharmaceuticals to high-demand markets such as Africa and Asia, thanks to the recent approval of the Dubai Silk Road Strategy and outstanding logistics infrastructure.
The UAE government has implemented several long-term plans to achieve sustainable growth in the healthcare and pharmaceutical industries. According to the Dubai Industrial Strategy 2030 and the Abu Dhabi Vision 2030, the pharmaceutical industry is one of the main sub-sectors to develop due to its future growth prospects, export potential, and mid-to-long-term economic impact. The UAE government's long-term goal has been to reduce its reliance on imported pharmaceuticals.
The ease of doing business is a massive incentive for international companies looking to expand. This is an area in which the UAE excels. The UAE established several free zones throughout the country to improve its infrastructure, which is now a pharmaceutical industry hub. Among them are Dubai Healthcare City, Dubai Science Park, and Jebel Ali Free Zone.
In October 2021, Abu Dhabi Ports' Logistics, a subsidiary of AD Ports Group, was awarded the coveted Good Distribution Practice (GDP) accreditation by one of the world's leading testing, inspection, and certification bodies, cementing its position as a global leader in the field of handling and storage of pharmaceutical products and vaccines across all temperature ranges.
Bureau Veritas was awarded the award after certifying AD Ports' advanced pharmaceutical cold and ultra-cold storage facility in the Khalifa Industrial Zone Abu Dhabi (KIZAD) and its related logistical services against European Union and World Health Organization (WHO) guidelines. The announcement marks the first time a UAE organization has received accreditation for both standards, and it is one of only a few in the Middle East to do so.
Oil and Gas Industry in Dubai
The oil and gas companies are based in Dubai, located in the Arabian Desert at the southern end of the Persian Gulf, between Abu Dhabi and Sharjah. Al Hajarayn in Hatta, a small area of Dubai, is located outside the emirate's borders, between Oman, Ajman, and Ras al-Khaimah. Dubai's land area includes a large portion of the desert, which is largely uninhabited. The desert in the country's south is known as 'The empty area.'
The UAE wants to expand its unconventional oil and gas production. According to the US Energy Information Agency, the UAE has the seventh-largest proven reserves of natural gas in the world, with over 215 trillion cubic feet. The UAE announced the discovery of more than 80 trillion cubic feet of gas resources at Jebel Ali in 2020. By 2030, the country hopes to be self-sufficient in gas supply. The UAE imports natural gas from Qatar via the Dolphin pipeline to power plants and desalination plants.
According to the UAE government, the country has approximately 98.6 billion barrels of oil reserves, the majority of which are located in Abu Dhabi, which has about 92 billion barrels, Dubai, which has about 4 billion barrels, and Sharjah, which has 1.5 billion barrels. The Zakum oil field contains most of the country's oil and is the third largest oil field in the Middle East, holding approximately 66 billion barrels of oil. The country produces an average of 2.9 billion barrels of oil per day, with plans to increase production to 5 million barrels per day by 2030. The state-owned Abu Dhabi National Oil Company (ADNOC) is the world's 12th largest company and is responsible for much of the UAE's oil production. The company has 16 subsidiaries, all of which are involved in various stages of oil production, and it works in various oil and gas fields, both offshore and onshore. ADNOC also operates two major oil refineries in Umm Al Nar and Ruwais.
UNITED ARAB EMIRATES OIL AND GAS MARKET - GROWTH, TRENDS,
COVID-19 IMPACT, AND FORECASTS (2022 - 2027)
During the forecast period of 2022-2027, the UAE oil and gas market is expected to grow at a CAGR of more than 2%. Low oil prices during the COVID-19 pandemic resulted in a 5.3% reduction in the nation's 2021 budget compared to 2020. Due to low crude prices and low demand for petroleum products, the country has also reduced its oil production to 2020. However, the market is expected to recover in 2022 due to increased investment in the upstream sector and supportive government policies. Furthermore, in 2018, the country launched USD 45 billion megaprojects to increase refining capacity in existing refineries. By 2025, the project is expected to increase the country's refining capacity by 65%, to 1.5 million barrels per day. As a result, increased investment in the upstream, midstream, and downstream sectors is expected to propel the country's oil and gas market over the forecast period. However, plans to diversify the power generation mix by incorporating renewable energy sources are expected to hamper the market's growth during the forecast period.
- Due to upcoming exploration and production projects and increased investment during the forecast period, the oil and gas upstream sector is expected to dominate the market.
- As the country's demand for LNG grows, smart technologies are being integrated into the existing LNG infrastructure, opening up many opportunities for the country's market players.
- Rising oil and gas investments, particularly in upstream and midstream sectors, are expected to drive the country's oil and gas market over the forecast period.
UNITED ARAB EMIRATES OIL AND GAS DOWNSTREAM MARKET - GROWTH, TRENDS, COVID-19 IMPACT, AND FORECASTS (2022 - 2027)
The development of ADNOC's downstream activities is central to the company's 2030 Integrated Strategy. ADNOC has launched a $45 billion effort to upgrade its downstream operations, leveraging existing assets and making new downstream investments to increase market share.
UNITED ARAB EMIRATES OIL AND GAS UPSTREAM MARKET - GROWTH,
TRENDS, COVID-19 IMPACT, AND FORECASTS (2022 - 2027)
ADNOC aims to increase the profitability of its upstream assets while also developing the oil resources required to meet projected increases in global oil demand. ADNOC intends to increase upstream crude production through new exploration and concession agreements.
ADNOC awarded framework agreements worth $658 million in March 2022 to expand drilling operations and crude oil production capacity. ADNOC announced three oil discoveries in May 2022, one of which was at Bu Hasa, Abu Dhabi's largest onshore field, with a crude oil production capacity of 650,000 barrels per day (BPD).
The Bu Hasa discovery includes 500 million barrels of oil from an exploration well in the field, which provides significant additional premium-grade Murban oil resources. Occidental has announced the discovery of nearly 100 million barrels of oil in Abu Dhabi's Onshore Block 3. A third discovery was approximately 50 million barrels of light and sweet Murban-quality crude in the Al Dhafra Petroleum Concession.
Dubai's Agriculture Industry
Agriculture in the UAE accounts for a small portion of the country's economy, accounting for less than 4% of GDP in the early 1990s. Digdagah in Ras al-Khaimah is one of the country's main farming areas. Other agricultural areas in Umm al Quwain, Al Awir in Dubai, Wadi Adh Dhayd in Sharjah, and other coastal regions around al-Fujairah, such as Haribo, are suitable. The total arable land area in the UAE is approximately 160,000 hectares. Date palms were one of the most important crops grown in the country by the 1990s, with about four million plants. The crops are primarily grown in small Oasis, and the Emirates and the federal government incentivize farmers. The government subsidizes pesticides, seeds, and fertilizers by 50%. The government also provides machinery loans and other technical assistance.
There are approximately 41 agricultural extension units in the country and numerous agricultural research stations and experimental farms. Farmers in the UAE increased from 4,000 in the 1970s to a standard of 18,265 in 1988. Limited arable land, occasional swarms of locusts, intense heat, and limited water supplies are some challenges confronting the country's agricultural development.
Dubai's Tourism Industry
The United Arab Emirates has recently promoted tourism to diversify the country's economy. After Bangkok, London, and Paris, Dubai is the world's fourth most popular tourist destination. In 2018, tourism-driven accommodation and food service activities generated AED 20.1 billion (US$5.5 billion) in value-added and grew by 4.5%, more than twice the GDP growth rate.
Some tourist attractions primarily focus on shopping, but ancient and modern attractions are located throughout the country. Dubai was the world's most visited city by foreign tourists in 2018. The government signed a tourism cooperation agreement with Lebanon in 2009, and tourism has grown in the country ever since. In 2014, Dubai attracted approximately 13.2 million visitors, most of whom came from neighboring Arab states and other countries worldwide. According to the Dubai Tourism Board, there were 15.79 million visitors in 2017, and the government estimates that by 2020, the number of visitors to Dubai will be around 20 million. Short dresses and sleeveless tops are not permitted in public, and a modest dress code is part of the country's criminal law.
The Dubai government has successfully stimulated tourism by providing necessary infrastructure and encouraging private sector investment in hotels and other forms of visitor accommodation. In 2018, 34 new hotels opened, bringing the total number of hotels in Dubai to 519 across all categories, a 7.0% increase over the previous year. The number of hotel apartment buildings increased to 197 from 196 in 2017.
The Economic Importance of Dubai’s Tourism
The tourism sector, narrowly defined in national accounts as Accommodation and Food Services activities (restaurants and hotels), generated AED 20.1 billion in value added in 2018 and contributed 5.1% to Dubai's GDP (in constant prices). Tourism value increased by 4.5 percent in 2018, outpacing GDP growth of 1.9 percent, and it is expected to continue to overgrow in the coming years.
The number of workers engaged in Accommodation and Food service activities increased to 211,841 in 2018, up from 211,651 in 2017. The sector's share of Dubai's total workforce was 7.6 percent in 2018, roughly the same as the previous year. Expanding hotels in Dubai in the Expo will also result in job creation in the tourism sector. Labor productivity in Accommodation and Food services activities increased by 4.4% in 2018 to AED 94,925 in constant prices. This increase in productivity was primarily the result of a faster increase in value added in regular prices than the actual number of workers.
What is Eco-tourism in Dubai?
The United Nations defines eco-tourism as "sustainable tourism that contributes to the preservation of a region's natural and cultural heritage while achieving the highest level of environmental friendliness and maintaining a balanced relationship between human activities, vegetation, and animals." This goal is met by developing tourism programs based on directing tourism to environmentally unique sites while not jeopardizing or negatively impacting the environment's quality.
One of the most pressing issues confronting the international tourism industry is sustainability. According to global statistics and studies, eco-tourism accounts for more than 20% of worldwide tourism. 3 This is a critical issue for Dubai because the Dubai Tourism Vision 2025 aims to receive approximately 25 million annual visitors by that date. Given these figures, the Dubai government is eager to protect the environment through various initiatives to lower carbon emissions, improve energy efficiency, reduce waste, and efficiently manage natural resources. According to data from Dubai's Supreme Council of Energy, which has been monitoring emissions since 2011, Dubai's net CO2 emissions fell by roughly 19 percent in 2018, which is lower than the target set in the 2021 carbon emissions reduction strategy. In 2018, per capita, carbon emissions in the UAE were 15.7 tons, well below the US ranking of 16.5 tons. According to data, per capita, electricity and water consumption fell by 13.9% and 12.9%, respectively, between 2015 and 2018.
Dubai Tourism Industry Market Size, Statistics and Trends
As a result of the pandemic, many new travel trends such as 'Bleisure Tourism' and 'Sustainable Tourism' have emerged in Dubai. These trends, along with new tourism models such as "staycations" and travel-friendly initiatives such as remote-working visas and golden visas, have revitalized the tourism industry.
The total number of international tourists in 2015 was 14.2 million. The figure gradually increased over four years, reaching 16.73 million in 2019. However, the pandemic damaged the tourism industry, causing a sharp drop in annual visitor numbers. Only 5.51 million tourists visited Dubai in 2020, according to official estimates. The UAE government is taking the necessary steps to resurrect the tourism industry.
Dubai is a fantasy city with the world's tallest skyscrapers, shopping malls, massive aquariums, indoor ski slopes, and other tourist attractions. Every day, thousands of people visit the city.
According to Trip Advisor's list of the most popular tourist destinations in Dubai, the Burj Khalifa is the most visited site. According to the list, the Burj Khalifa is more popular than the Dubai Fountain, Dubai Mall, and Dubai Miracle Garden.
The Burj Al Arab, Dubai's most famous luxury hotel, ranked first on Lonely Planet's list of 'Top Sites To See In Dubai.' The Burj Khalifa is ranked fourth on this list, following IMG Worlds of Adventure and the Dubai Museum.
Overview of the Tourism Market in the United Arab Emirates
After the crippling headwinds of 2020, the UAE tourism performance in 2021 was stronger than expected, with pent-up solid demand being unlocked in leisure and commercial tourism. Hotel occupancy rates were steadily rising, aided by the Dubai Expo (2021-2022) and the relaxation of overseas travel advisories in key source markets.
How Dubai is Becoming a Modern Tourist Hotspot
Dubai was a small port in the middle of the desert just five decades ago. Much of the Gulf was desert until the discovery of oil in 1966, but many Gulf countries changed dramatically after the discovery of oil. Dubai is now one of the world's most popular tourist destinations. In 2019, Dubai received 16.73 million overnight visitors. So, how has Dubai evolved from a desert to a modern tourist destination in less than a half-century?
One of Dubai's most notable attractions is its impressive and distinctive architecture. As the home of the world's tallest building, the Burj Khalifa, it has drawn thousands of visitors to see it. Add this to the emirate's other magnificent structures, and it's easy to see why Dubai is quickly becoming one of the most popular modern tourist hotspots.
Dubai has one of the world's most popular entertainment industries. Many tourists are drawn to Dubai for the fun things to do because of its world-renowned shopping malls and entertainment centers. There is something for everyone in Dubai, whether you are going to watch one of the impressive firework displays or staying in one of the many luxury hotels.
It's even expanding into the online entertainment industry as the home of the UAE's first online casino. So, if you're looking for a country with glorious UAE weather, beautiful sites, and fun activities, Dubai has you covered.
The giant golden beaches with various superb features are another of Dubai's most popular tourist attractions. From the stunning Kite Beach with its fun activities to La Mer and its quirky street food, Dubai has a beach for everyone. The Beach by JBR, the largest beach in the area, is widely regarded as the best beach in the city. The JBR Beach stretches the entire length of the Dubai Marina, lined with bars, bistros, and boutiques.
In Dubai, numerous business opportunities range from advertising and marketing to recruitment and bookkeeping. In 2013, the UAE was the world's fifth largest migrant destination. Most of those who immigrate to Dubai and the UAE do so because of the abundant job opportunities. The UAE is no longer just about its oil industry; the country - and its largest city - are, to put it mildly, broadening their horizons.
For some, Dubai may not appear to be a family-friendly vacation destination, but there is plenty to do for the entire family. Water parks, Legoland Dubai, SeaLife centers, and other attractions provide entertainment for children of all ages. Almost every luxury hotel in Dubai includes a large, impressive swimming pool. So you can make the most of your time away by teaching the kids to swim or creating lifelong memories in the infinity pool and on the beaches.
Water distillation Industry in Dubai
The UAE's natural water resources are limited. The UAE has two water sources: groundwater and desalinated seawater. Groundwater levels are insufficient and only meet about 1% of the country's needs.
Desalination plants now provide nearly 99% of Dubai's potable drinking water. Desalination plants treat seawater to make it usable. Seawater from the Arabian Gulf is pumped into the DUBAL, Dubai Aluminum factory to keep the aluminum smelters cool. It is then transported to nearby DEWA, Dubai Electric, and Water Authority plants for power generation and desalination. The desalinated water is then pumped into the pipes for consumption. Because Dubai's ground is made of sand, water contamination from the environment is highly unlikely. Leaking pipes and water tanks are the only likely familiar sources of contaminants.
Thermal desalination is the dominant technology in the UAE for making seawater potable. Today, the country's potable water (42 percent of total water requirement) comes from 70 major desalination plants. It accounts for roughly 14 percent of total desalinated water production worldwide.
Due to a scarcity of freshwater sources, the UAE must find a long-term desalination solution to meet its water needs. One solution is to connect desalination technologies to renewable energy sources.
Water in the UAE is primarily desalinated through reverse osmosis or as a byproduct of electricity generation via multiple-effect distillation (MED) and multiple-stage flash distillation (MSF).
According to the State of Energy Report 2015, water demand increased by 35.8 percent between 2008 and 2012. The installed capacity for desalinated and groundwater was 1,585 million gallons per day, with a total annual capacity of 393,878 million.
Dubai's Textile Industry
For many years, the UAE has been associated with oil. However, the seven emirates are gradually combining to become apparel and textile manufacturing hubs. The UAE Cloth And Textile Industry Include Woven, Knitted Garment, Fabrics, Home Textile, Readymade Cloth, And Technical Textile. Around 150 readymade garment manufacturers are primarily concentrated in Dubai and the surrounding areas of Sharjah. The Middle East is the fourth largest exporter of fashion and clothing accessories, accounting for nearly 5.5% of global trade.
Favorable economic conditions and trade equations have brightened the country's future, particularly in apparel and fashion. Furthermore, the UAE's ever-expanding economy of luxury clothing has made it an important center for the apparel and textile business. This Gulf country has emerged as a significant global textile hub, producing fibers, fabrics, apparel, cloth, outerwear, home textiles, and technical textiles.
The availability of skilled labor, positive government initiatives, cutting-edge technology, supportive trade agreements, consumers with high disposable incomes, and the absence of hidden costs and red tape make the UAE countries a viable hub for all types of textiles and garments. This country has good equations in all necessary aspects required for the smooth operation of a textile or apparel industry.
The UAE has a diverse range of textile products, including luxury and designer garments, home textiles, technical textiles, and readymade garments. This oil-producing country is putting its best foot forward and marching ahead with advancements in the textile industry.
UAE Textile Business Market, Statistics and Trends
In the Abu Dhabi, Dubai, and Sharjah regions, there are approximately 170 garment cloth manufacturers and suppliers. Recently, Gulf Countries Fashion Apparel Cloth UAE Exports Have Covered More Than 52 Countries In Asia, the Middle East, Europe, and Africa. Most Fashionable Luxury Apparel Clothing Has Made UAE, And It Has Become The World's Textile Apparel Business Hub. Apparel Consumer Trends And Availability, Online Ecommerce Shopping Is Increasingly Popular In Arab Countries.
Top 10 Textile and Clothing Export Countries By Uae
The UAE Textile Market Sector Exports Products to Saudi Arabia with a USD 904.39M (In Million) Estimated Export Market Share (20%), Iran, Islamic Republic with a USD 904.39M (In Million) Exports Sector Contribution (20%), Kuwait with a USD 504.38M (In Million) Exports Share (11.15%), Oman with a USD 393.33M (In Million) Exports Market Percentage (8.7%), and Bahrain with a USD $
Uae's Top 10 Textile and Garment Imports From Countries
The following are the textile and clothing products that the UAE imports from around the world: China, approximately USD 2258.85M (In Million) with Import Share (31.93%), India, approximately USD 1182.54M (In Million) with Import Share (16.71%), Bangladesh about USD 439.43M (In Million) with Import Share (6.21%), Turkey approximately USD 371.78M (In Million) with Import Share (5.25%), and Italy approximately USD 342.49M (In Million) with Import Share (4.84%).
Key Market Trends- Textile Industry in the UAE
- The textile industry in the UAE thrives thanks to government initiatives such as infrastructure development, transparency and paperwork, and tax exemptions.
- The Dubai Design and Fashion Council is being launched to encourage creativity and attract regional and global designers, and brands for various fashion events
- The presence of an ever-thriving economy to luxury clothing has made the UAE an essential center for apparel and textile business
- Increase in labor costs has led to computerization in the textile and apparel business The Emirates manufacturers are aiming for and taking an active interest in the development of technical textiles and the provision of ground-breaking textile products. It will improve efficiency and product quality while assisting in the timely delivery of orders.
- Because of its lack of profit restrictions, competitive labor costs, low corporate taxes, and inadequate import duty, the UAE is becoming an ideal destination for investment in the textile and apparel industries.
Places like Dubai also make the UAE a profitable option because they attract many tourists worldwide. The government is also encouraging expanding and development of small and medium-sized manufacturing businesses. Indeed, a separate free zone has been established to assist this sector in reaching new heights.
How many textiles are in the Dubai industry?
The textile industry in the United Arab Emirates (UAE) is significant, but it is not promoted or advertised. Around 150 readymade garment manufacturers are primarily concentrated in Dubai and the surrounding areas of Sharjah. The Middle East is the fourth largest exporter of fashion and clothing accessories, accounting for nearly 5.5% of global trade.
Is textile a good business in Dubai?
There are numerous advantages to establishing a textile business in Dubai. A textile business in Dubai can be life-changing for many aspiring entrepreneurs because it is one of the most profitable business industries. The following are some of the most significant advantages of establishing a textile business in the UAE:
Target Diverse Audience and Markets
Dubai is home to many ex-pats and is one of the most popular tourist destinations. Entrepreneurs in Dubai have the opportunity to cater to the needs of diverse audiences. This enables them to increase their revenue. Furthermore, Dubai is the world's second-largest import-export hub for fashion and textiles. This demonstrates why establishing a textile business in Dubai is a wise decision.
Regarding taxation, entrepreneurs and investors benefit significantly from the UAE's total tax exemption. With 0% income, personal, and corporate taxes, the UAE is one of the most tax-friendly countries in the world. So, if you want to start a textile business in Dubai, you can take advantage of these tax breaks.
Profits and capital repatriation
Many business owners are concerned about the additional capital to be paid when starting or liquidating their company. When it comes to doing business in Dubai, you don't have to be concerned. The city permits the full repatriation of profits and capital invested in the industry.
Simple Business Formation Procedure
When it comes to business setup, the Dubai government is beneficial. It offers various services to entrepreneurs, making it simple and appealing for them to conduct business in the city. The government has taken several initiatives to make starting a business in Dubai easier. This will expand the country's business opportunities, ultimately strengthening the economy.
When it comes to Dubai's location, it is one of the primary reasons why international entrepreneurs prefer the city. The city serves as a gateway to neighboring countries and has excellent connectivity with the rest of the world due to its strategic location on the global map. As a result, Dubai never has to cut off the supply of goods or products from neighboring countries. Businessmen and women appreciate how simple the import-export and re-export processes are. Its location also allows business owners to expand their operations in the UAE and other countries.
Food processing industry in Dubai
The UAE's supermarkets always have your favorite frozen foods, snacks, and cooking ingredients. While these stores sell high-quality international products, some residents prefer items made by local food manufacturers. The top food manufacturing companies in the UAE have extensive operations to ensure that consumers access a diverse range of locally produced goods. They go to great lengths to ensure that your favorite items are always available at your local supermarket.
The UAE government has enacted stringent regulations to protect consumers' rights. Top food manufacturing companies in the UAE must adhere to best practices in health and safety and provide excellent products that are entirely safe for human consumption.
Dubai Food & Beverage Industry Market, Trends and Opportunities
"Food security exists when all people have physical and economic access to sufficient, safe, and nutritious food that meets their dietary needs and food preferences for an active and healthy life," according to the FAO. The UAE has taken several steps toward food security, including vertical farming, the development of food storage facilities, investments in agricultural lands in Asian and African countries, and other initiatives. According to the EIU, the UAE Food Security Index has steadily improved over the last five years. Furthermore, the data show that the UAE has been the best performer among GCC countries in enhancing the Global Food Security Index over the last five years. Naturally Healthy Food, Organic Food, and Free-From Food are New Food Trends in the UAE.
Forecast for F&B Products Sales in UAE
According to Euromonitor, UAE sales of packaged food, fresh food, and soft drinks will grow at a CAGR of around 3.5%, 5.2%, and 1.2%, respectively, from 2018 to 2023. The fastest growth in retail sales value will be in staple foods, followed by cooking ingredients, snacks, and dairy. Meat, pulses, nuts, and vegetables are expected to grow the most in fresh food. Furthermore, ready-to-drink (RTD) coffee, bottled water, concentrates, tea, and other products will see the most growth in soft drinks.
Drivers of the Food and Beverage Industry in the UAE
Population growth, a high GDP per capita, and rising tourist arrivals are driving factors in the UAE's Food and Beverage (F&B) sector. According to the IMF, the UAE population was around 10 million in 2019, and the country had one of the highest GDP per capita in the world. The food industry is also benefiting from rising tourism, with the most recent data showing that Dubai welcomed 16.7 million visitors in 2019.
Business Opportunities for Investors in the F&B Industry
The different business opportunities that the food and beverage industry holds for business owners and investors are stated below:
Food Manufacturing Business
Business owners and investors who are keen to take a step to set up a food manufacturing business in Dubai have the flexibility to go ahead and opt for one. In this case, the owner must hold a manufacturing license to get legal permission to operate the business. The Department of Economic Development (DED) Dubai will issue the permit after a complete inspection of the essentials provided. Moreover, certain approvals must be gathered from Dubai Municipality and other Government Authorities.
The Restaurant Industry
As previously stated, Dubai serves as the destination for the foreign population, and the city embraces various types of restaurants prevalent in the city. After obtaining a restaurant license from the Department of Economic Development, business investors and entrepreneurs can quickly start a restaurant business (DED). Multiple factors must be considered when creating a restaurant business, such as location, business plan, etc.
The next option available to a business investor is to open a cafeteria. According to Euromonitor International, over 19,000 cafeteria outlets are expected to enter the market by 2019. The cafeteria business, like the restaurant business, requires the business owner to have a cafeteria license and a trade license, which will be issued by the Food and Safety Department and the Department of Tourism and Commerce Marketing in Dubai.
Food Truck Business
If you enjoy street food and want to start a business selling it in Dubai, consider creating a food truck business. The establishment process necessitates the approval of four departments: the Department of Economic Development (DED), Dubai Municipality, the Road and Transport Authority (RTA), and the Dubai Electricity and Water Authority (DEWA). Once the license has been obtained, the business activities can begin.
The UAE serves as a massive ground for the Food and Beverage industry, allowing business owners to excel in their food and beverage establishments. It may be risky when dealing with the incorporation process at first. To avoid such stumbling blocks, business owners, investors, and entrepreneurs prefer to hire business consultants who are familiar with the company formation process and can guide you accordingly. Commitbiz takes the initiative to understand our client's business needs and cater to them accordingly. Our business experts can handle the incorporation process while you focus on business planning. Contact us today if you want to incorporate your food and beverage industry; we'd be happy to help.
How big is the UAE food industry?
Euromonitor estimates that the UAE packaged food market will be worth $5.9 billion in 2020. This represents a 20.9% increase and a little more than a $1 billion increase over 2016. They also predict that packaged food sales in the UAE market will reach nearly US$7.5 billion by 2025, representing a US$1.3 billion and 21.6% increase. In the forecast, high-growth products include:
- Pet Food
- Processed Meat & Seafood
- Processed Fruit & Vegetables
- Sauces, Dressings & Condiments
- Baked Goods
- Rice, Pasta & Noodles
- Breakfast Cereals
- Ready Meals
Hypermarkets, supermarkets, grocers, online retail, home delivery services, and related customer loyalty programs have driven massive growth in food retail over the last ten years.
Dubai's automotive industry
The UAE is well-known for its opulent lifestyle. It will be challenging to walk through the streets of Dubai without encountering any supercars. You can see European-made car brands on its roads, but the UAE also has supercars. Several supercars have been designed and manufactured in the UAE. Dubai is a crucial automotive hub for exports and re-exports of vehicles in the surrounding region, owing to its strategic location and future-ready infrastructure.
Among its thriving industries and sectors, the automobile sector is an essential pivot for future growth. Dubai is home to global mobility leaders and a leading hub for automotive vehicle export and re-export to the Middle East and North Africa (MENA) region. The UAE's low import and fuel costs, favorable tax regime, and high disposable incomes have also contributed to the country's automobile sector's strength and encouraged global conglomerates to set up shop and manufacture in the country. The government has also stimulated research and development in autonomous or driverless vehicles and smart and environmentally friendly alternatives such as hydrogen, natural gas, and hybrid cars.
Automotive Logistics in Dubai: An industry rundown
Aside from its geographical location as a gateway to the East and West trade lanes, Dubai also has an excellent transportation infrastructure for goods and its growing population, lending the city a particular ring in terms of automotive. For global players, Dubai's automotive market is both lucrative and in high demand, but it is also highly competitive. Optimizing your company's supply chain strategy and providing excellent customer service is critical to success in this industry.
Automotive suppliers looking to enter the abundant Dubai market will undoubtedly benefit from understanding their customer's personas and how they can deliver better by thoroughly understanding the city's logistics operations.
According to Aranca, the Middle East's car park (number of vehicles on the road) reached 21 million in 2018. These figures include selling 1.03 million new passenger cars and 270,000 commercial vehicles. At the research time, 27 million vehicles were expected to hit the road by 2023.
The policies for vehicular imports, low fuel costs, low import tariffs, high per capita disposable income, and favorable tax structure attract automotive companies to Dubai and the UAE. These factors contribute to the country's reputation as one of the most vibrant automotive markets in the Gulf.
Purchasing a car in the UAE is also relatively simple due to attractive financing and insurance options. With the UAE's substantial shift toward more environmentally friendly practices in various areas, the adoption of hybrid and electric vehicles has also increased. Free trade zones in Dubai are the first place suppliers should look if they want a piece of this market growth.
Dubai: A Growing Automotive Hub in the Region
Dubai is home to global mobility leaders and a key hub for automotive vehicle export and re-export to the Middle East and North Africa (MENA) region. This is due to a variety of factors. The strategic location and proximity to neighboring countries—from the Middle East and Africa to South East Asia and India—come first, followed by its advanced infrastructure, ease of doing business, conducive policies, available industrial space, and the existing local demand for luxury vehicles, which is only growing.
Why is Dubai an engine for growth for the global automotive industry?
Dubai's position as a significant vehicle exporter and re-exporter has piqued global interest, allowing manufacturers from Asia, Europe, and North Africa to do business in the Middle East, Africa, India, and South-East Asia.
The Emirate's location and infrastructure make it ideal for the automobile re-export market, while the high native demand for high-end automobiles fuels additional interest.
Dubai's Construction Industry
In 2017, Dubai was on the verge of what was widely anticipated to be a multi-year construction boom. The construction of new and improved infrastructure and significant event spaces is an essential component of the construction pipeline for the foreseeable future, driven most immediately by Expo 2020 preparations. Simultaneously, Dubai's steadily growing population, an increasing number of incoming visitors, and recent strong investment growth have fueled an influx of new residential areas, hotels, and warehouses.
Dubai's construction sector is a significant economic driver, and the city's visionary approach to sustainability and innovation is helping to shape the future of cities worldwide. Dubai's iconic structures and developments have made it instantly recognizable, and the construction industry, in general, has laid the groundwork for the city's growth in recent decades.
According to MEED Projects, the UAE construction market is valued at US$805 billion, with Dubai at the heart of this with a dynamic real estate market that elicits a strong appetite for investment from around the world, highlighting the city's long-established attractiveness. The value of real estate transactions in Dubai increased to US$62.1 billion in 2019, and despite the COVID-19 pandemic, the sector grew 3.7 percent in the first quarter of 2020 compared to the same period in 2019. FDI into Dubai's real estate market increased 17 percent during this period, reaching US$28.9 billion, with new investors accounting for 57 percent of transactions and investments. With the UAE's population expected to grow from 9.34 million to 11.5 million by 2025, Dubai's construction and real estate sector has plenty of room for expansion.
Despite near-term challenges in specific construction sectors, the UAE's medium to long-term growth story remains intact. The construction industry in the UAE is expected to expand steadily over the next four quarters. The growth momentum is expected to continue throughout the forecast period, with a CAGR of 3.9% between 2022 and 2026. The country's construction output is expected to reach AED 286,350.5 million by 2026.
Dubai Financial And Banking Industry Overview
Dubai is quickly becoming one of the region's most important financial hubs, leading in Islamic finance and serving as the regional headquarters for global banks. Banking, Insurance, Capital Markets, and the financial services sector were:
- The third most significant contributor to Dubai's real GDP in 2018.
- Accounting for AED 40.4 billion in constant prices.
- 10.2 percent of the total.
Financial institutions operating in the Emirate of Dubai, which include banks, insurance companies, supporting financial intermediaries, and capital market operators, contribute to national output. In 2018, the sector employed 46,033 people, slightly decreasing from 46,283 in 2017. This accounts for 1.7% of the Dubai workforce, but the average labor productivity (output per worker) in 2018 was nearly AED 1,304,000, the highest among the major economic sectors in Dubai. The gross value added of the financial services sector increased by 0.62 percent in 2018, falling short of the 1.94 percent growth rate of total GDP. The industry is expected to grow by 1.0% in 2019 and 2.7% in 2020.
Banking was the sector's most significant direct contributor to Dubai's economy, but the industry indirectly facilitates other economic activities through loans and credit extensions. Emirates NBD, the UAE's second largest conventional bank in terms of assets, is headquartered in Dubai. Islamic Bank, the Federation's first and largest bank founded on Islamic principles in 1975, is the largest Islamic bank in the UAE and the third largest in the world. In 2018, Dubai insurance activities generated AED 3 billion in value-added, the same as the previous year. Despite its negligible contribution to GDP, Dubai is a significant city for the UAE insurance sector. In 2018, Dubai's insurance activities generated AED 27.1 billion in gross written premiums, accounting for 62% of total written premiums in the UAE.
Dubai is a vital hub for capital market activity in the UAE and throughout the region. Dubai International Financial Center (DIFC), the region's second largest and most diverse financial center, is steadily making its way into the global economic arena, joining New York, London, Singapore, and Hong Kong. DIFC is critical to Dubai's growth in international and regional finance. The importance of DIFC is highlighted in the Dubai Plan 2020 as one of the world's leading offshore (free zone) financial centers, connecting regional markets to the global economy.
Dubai Financial Market is a domestic stock exchange, and Nasdaq Dubai is an international capital market. The two deals work in tandem, providing investors and businesses with opportunities across various asset classes to allocate capital within and outside the country efficiently. The Dubai Financial Market (DFM) General Index increased by 4% in the first quarter of 2019, and net portfolio investment reached AED 680 million, accounting for 65% of total DFM trade. Institutions accounted for AED 492 million of the total amount invested, indicating confidence in the economy's future prosperity.
Dubai Financial And Banking Industry Market Size, Developments and
In 2018, Dubai's Financial Services sector generated AED 40.4 billion (US$11 billion) in value-added. This sector indirectly facilitates other economic activities through loans, credit, insurance, and capital.
Major Segments of the Dubai Financial Sector
- Dubai's financial services are organized around four main activities. Traditional banking, insurance, capital markets, and Islamic financing are examples. Construction, real estate, and logistics are the sector focus sectors.
- A diverse range of specialized service providers has grown around these core activities. In Dubai, numerous international law firms, accounting firms, financial information and research specialists, human resources firms for the financial sector, and marketing firms exist.
- There are only a few locally based educational institutions offer specialized financial services training.
- The UAE Central Bank provides regulatory functions, the Dubai Financial Services Authority for the traditionally regulated local market, the Dubai International Financial Center (DIFC) Judicial Authority for the free zone, the Emirates Securities & Commodities Authority, and the Insurance Authority for the free site.
Size of Dubai Financial Sector
- Dubai has developed a dynamic financial services cluster that serves the UAE's fast-growing local market. Traditional retail and corporate banking have made the most progress, while capital markets are still evolving.
- Dubai is quickly becoming one of the region's most important financial hubs, a leader in Islamic finance, and a base for global banks operating in the area.
- Dubai financial services are essential to the Dubai economy. In 2017, the sector accounted for roughly 10% of total real GDP in the Emirate, 1.3% of employment, and 4.3% of the total wage bill.
- The total value added in the sector increased over time, from US$ 6.6 billion in 2006 to US$ 11 billion in 2017, averaging a 4% annual growth rate. Dubai's position in Islamic finance and global banks already creates clear opportunities.
Developments in the UAE Banking Sector
According to the UAE Central Bank, the total number of domestic licensed banks remains at 22. The number of Gulf and foreign banks operating in the UAE has decreased to 38, with 11 wholesale banks. At the end of 2018, the total assets of all UAE banks reached AED 2.869 trillion, up 6.5% from AED 2.694 trillion at the end of 2017. The asset value at the end of 2018 equals 208 percent of the UAE's nominal GDP.
Bank asset growth in the UAE has slowed since 2015, following a rapid increase of 28.6 percent in 2014. The increase was primarily due to a 12.1% increase in the value of bank assets in Abu Dhabi that year, followed by a 37.1% increase the following year, which was offset by a fall in banking assets in the rest of the UAE. Bank asset growth, on the other hand, has been more consistent, averaging 7.0 percent since 2014. In 2018, the growth rate of Dubai-based banks' assets was 6.1 percent, which was slower than the growth rate of banking assets in Abu Dhabi, 7.5 percent, but higher than the rise in banking assets in other Emirates within the UAE was 3.5 percent.
The agreement to merge Abu Dhabi Commercial Bank (ADCB), Union National Bank (UNB), and Al Hilal Bank was the most significant corporate event in the UAE banking sector in 2018. The merger was completed in May 2019, and the corporate name ADCB was retained for the new banking group; however, Al Hilal Bank continues to operate as a separate Islamic unit to provide customers with Shari'a compliant products and services. With the merger, the UAE banking sector now has three major players: FAB, Emirates National Bank of Dubai (Emirates NBD), and ADCB. They accounted for 59.5 percent of total bank assets in the UAE in 2018. In that year, FAB accounted for 26.5 percent of total assets, while Emirates NBD accounted for 17.8 percent, ADCB accounted for 15.3 percent, and Dubai Islamic Bank (DIB) accounted for nearly 8 percent of total assets.
Core Banking Solutions Market Opportunities And Forecast, 2020-2027, In Case of UAE
According to a report, the UAE core banking solutions market was worth $59.27 million in 2019 and is expected to be worth $209.35 million by 2027, growing at a CAGR of 17.3% between 2020 and 2027.
The report highlights numerous factors influencing the growth of the global UAE Core Banking Solutions Market, including market demand and forecast, as well as qualitative and quantitative data. Among the qualitative data in the market report are pricing analysis, key regulations, macroeconomic factors, microeconomic factors, key impacting factors, company share analysis, market dynamics & challenges, strategic growth initiatives, and competitive intelligence.
Key Players Analysis
Capital Banking Solutions, EdgeVerve Systems Limited, Finastra, Fiserv, Inc., NCR Corporation, Oracle, SAP SE, SDK.finance, Tata Consultancy Services Limited, and Temenos Headquarters SA are among the major players profiled in the UAE Core Banking Solutions Market report.
A thorough study of the leading players in the global UAE Core Banking Solutions Market is used to analyze top winning strategies. Comprehensive analysis of various companies' recent developments and growth curves aids in understanding their growth strategies and potential market impact. The analysis indicates a firm's market performance potential compared to its competitors. To maximize market share, each company employs its business strategy. Annual reports, SEC filings, and press releases were used to evaluate the companies.
Important Information Incorporated into the UAE Core Banking Solutions Market Report
- The UAE Core Banking Solutions Market analysis includes detailed information about the industry and significant industry players.
- Porter's five forces analysis aids in analyzing buyer and supplier potential as well as the competitive scenario of the industry for strategy development.
- The major countries' revenue contributions to the regional market have been mapped.
- The report outlines the current market trends and future scenarios of the global UAE Core Banking Solutions Market to comprehend the current opportunities and potential investment pockets. The study explains the key drivers, restraints, and options and their detailed impact analysis.
AMR provides market sizing in terms of value in terms of quantitative analysis. Furthermore, the study includes market forecasts through 2027 and compound annual growth rates at the segment and country levels. In addition, key market trends and year-over-year comparisons are covered in the same section/analysis.
COVID-19 Impact Assessment
The emergence of the COVID-19 pandemic is expected to have a significant impact on economic and social development. As a result, the report depicts both micro- and macroeconomic analyses. The report also includes a qualitative assessment of the effects of COVID-19 on the UAE Core Banking Solutions Market. Furthermore, the study focuses on market size and share, reflecting the impact that COVID-19 had on the UAE Core Banking Solutions Market in 2022 and is expected to have in the future. The report also outlines key players' strategies during the global health crisis.
Furthermore, it provides a framework for assessing the impact of COVID-19 on the supply chain. Moreover, the roll-out of vaccines and the decrease in the likelihood of infection are expected to impact the growth of the UAE Core Banking Solutions Market. As a result, the report includes a post-COVID-19 impact analysis.
Segmental and Competition Dashboard
The report provides key trends, dynamics, and qualitative and quantitative information about each product segment in the segmental analysis chapter. The report segments the global UAE Core Banking Solutions Market by financial services and distribution channels.
This analysis will be conducted at the regional and national levels for current and projected years, namely 2022-2027.
The competition dashboard provides essential market structure and market share analysis for top players. In addition, company profiles will be covered in the same section, including a company description, financial analysis, and key developments. The report also includes these companies in the competitive landscape chapter, which provides for top players' product/service mapping, a competitive dashboard, a competitive heat map, and critical developments between the forecast period.
Dubai Mining, Minerals & Metals Industry Overview
The discovery of oil fields in the United Arab Emirates marked the beginning of the country's new economic policy. The UAE government's policy of active diversification of the oil economy has, in turn, contributed to the development of many related industries. As a result, the national mining sector has emerged as one of the most promising production areas. It is no secret that the UAE's minerals have the potential to attract potential investors from all over the world.
Furthermore, to attract potential investors, the government has abandoned its traditional methodology of exploration and research work on UAE territory. Today, the state has adopted the most cutting-edge technologies and scientific methods. In turn, ongoing mapping studies, scientific research, and aerial photography have confirmed the UAE's mineral diversity and abundance.
Overview Of Mining Industry In UAE
For centuries, the mining industry has been the driving force behind economies. Whether it is mining minerals, metals, or precious stones, each mining industry is critical to the economic activities of many countries around the world. This principle applies to the United Arab Emirates. While the region's economic uprising was primarily based on the discovery of oil, the region's mining industry is rapidly expanding and becoming a highly profitable contributor to the country's GDP. The list of minerals mined in the United Arab Emirates is extensive, ranging from copper and gypsum mines to metal and precious stone extraction. With the surge in technological advancements in the UAE, the country established that it uses the most advanced technologies and scientific methods in the mining industry. These methods eventually confirmed the variety and abundance of minerals available in many of the Emirates.
The country's industry is attracting many international companies successfully investing in this economic sector. This industry includes not only the process of mining minerals, but as stated, the UAE's exports of mining products as both raw materials and finished goods are steadily increasing. The infrastructure in the UAE is ideal for the mining industry, with excellent port and land transport facilities. For this Article and UAE law, the terms quarrying and mining will be interchangeable.
Are there mines in Dubai?
There are no mines beneath the sands of Dubai, with artisanal miners or children toiling away in search of gold. But, as the United Arab Emirates (UAE) strives to expand its position as a significant gold hub, the Dubai Gold Souk and refineries compete with the most critical global operations.
According to data compiled by the Observatory for Economic Complexity, the UAE, particularly Dubai, has established itself as one of the largest and fastest-growing markets for precious metals in recent years, with imports increasing by 58 percent per year to more than $27 billion in 2018.
With no local gold to tap, the UAE, unlike neighboring Saudi Arabia, must import gold from wherever it can, whether legitimately, smuggled without question, sourced from conflict zones, or linked to organized crime.
Gold has become so crucial to the Dubai economy that it has surpassed mobile phones, jewelry, petroleum products, and diamonds as the Emirate's most valuable external trade item. It is also the UAE's second-largest export after oil, with $17.7 billion exported in 2019. Gold's significance has grown as Dubai's oil reserves have depleted and the UAE has attempted to diversify its economy.
Does the UAE have minerals and metals?
The United Arab Emirates mines a wide range of minerals, including raw steel, aluminum, gypsum, copper, precious stones, and metals such as salt and marble.
According to recent economic results, minerals in the UAE have become a significant revenue item for the state treasury, and the mining product trade continues to show positive annual dynamics.
Dubai Power & Energy Industry Overview
The UAE's energy efforts aim to ensure access to affordable, dependable, and modern energy services, significantly increase the share of renewable energy in the global energy mix, and double the global rate of improvement in energy efficiency.
As a clean energy pioneer in the Middle East and North Africa (MENA), Dubai is well-positioned to serve as a regional hub for global renewable energy specialists looking to expand in this rapidly growing region.
The UAE gets most of its electricity (110 billion kilowatt-hours in 2013) from natural gas-fired power plants. It intends to connect all of the emirates' natural gas distribution networks, which should help alleviate some of the peak-demand shortfalls experienced in the past.
The total installed electricity generation capacity in 2012 was 27.2 gigatonnes (GW). To meet rising demand sustainably, the UAE is concentrating on developing a balanced energy mix.
UNITED ARAB EMIRATES POWER MARKET - GROWTH, TRENDS, COVID-19 IMPACT, AND FORECASTS (2022 - 2027)
Overview of the Market
During the forecast period, the UAE power market is expected to grow at a CAGR of 6.5%. Because of the lack of economic activity during the lockdown period, the COVID-19 pandemic has significantly impacted the power market, resulting in decreased power demand, particularly from the industrial sector. The UAE power market is primarily driven by rising power demand due to population growth and the expansion of power transmission projects in the country. However, the lack of privatization in the power sector has created bottlenecks in the UAE power market's growth, resulting in a lack of investments by independent companies to upgrade the country's power infrastructure.
- Due to the abundance of natural gas in the country, natural gas-based power generation is expected to dominate the power market during the forecast period.
- •The UAE Clean Energy Strategy 2050 will supply around 50% of electricity from nuclear and renewable sources by 2050. The first nuclear power generation unit was commissioned in Abu Dhabi in 2020, and an additional 4GW of nuclear power capacity is currently under construction.
- Renewables-based power projects are expected to drive the market in the coming years. The country has recognized nuclear power as one of the best opportunities to achieve its net zero emission goals in the long run.
Trends in the Market
The natural gas sector is expected to dominate the market.
- Due to the upcoming natural-gas-based power projects, natural-gas-fired power production is expected to have the highest share during the forecast period.
- •In 2020, natural gas will account for approximately 95% of the UAE's electricity mix. According to the International Energy Agency, natural gas accounted for about 85% of the total primary energy supply in 2019. This is due to the country's massive natural gas reserves, estimated to be around 209.7 trillion cubic feet as of 2020.
- Mitsubishi Power will deliver three M701JAC gas turbines to the UAE's Fujirah F3 gas-fired power plant in December 2021. The project is the UAE's largest gas turbine combined cycle (GTCC) facility, equipped with integrated cycle technology. The power plant, which will use this highly efficient gas turbine, is expected to be operational by 2023.
- The Al-Layyah Power Plant in Sharjah, UAE, clearly demonstrates the country's demand for natural-gas-fired power plants. The 1.02GW combined cycle power plant (CCPP) is an expansion of the Layyah power plant currently under construction. The plant is scheduled to be operational by July 2022. As a result of these developments, natural gas-fired power generation is expected to have a significant share in the near future.
- The Dubai Electricity and Water Authority (DEWA) will inaugurate six electricity transmission substations in May 2021. The project was completed at the cost of AED 1.1 billion. Among the substations is a 400 kilovolt (kV) substation at the Mohammed bin Rashid Al Maktoum Solar Park and five 132 kV substations in other areas of Dubai.
- The United Arab Emirates commissioned its first Barakah Nuclear Energy Plant in December 2020, after testing successfully reaching 100% of the reactor power capacity for Unit 1 of the facility.
Dubai Medical & Pharmaceutical Industry Overview
Dubai's multibillion-dollar investments in cutting-edge healthcare have elevated it to the region's most important medical and pharmaceutical investment hub.
The emergence of Dubai as a global healthcare innovation hub reflects the Emirate's broader ambitions to build a knowledge-based economy and the UAE's massive investments in medical research. The number of medical research projects initiated in the UAE increased 157% between 2014 and 2018, compared to the Gulf average of 86.5%.
The significant and ongoing increase in trade volume in pharmaceutical and medical supplies bolsters Dubai's reputation as the region's leading healthcare market. External trade was valued at US$1.85 billion in Q1 2021, a 31% increase year on year, while trade volume increased 47% to 48,600 tonnes.
Dubai currently has more than 30 pharmaceutical manufacturers, and the city's pharmaceutical industry is expected to be worth US$6.8 billion by 2025, up from US$1.6 billion today.
Dubai Medical & Pharmaceutical Industry Market
Government-led initiatives in healthcare, digital transformation, and sustainability cement Dubai's reputation as a global destination for entrepreneurship and investment The region's pharmaceutical sector is rapidly expanding, and manufacturing, distribution, and research opportunities abound.
The Dubai government is driving it with plans to reduce pharmaceutical imports by 18 percent, from $4 billion to $2.5 billion by 2022. A particular emphasis is being placed on attracting manufacturers of "super generics," nutraceuticals, 3D implants, and blood plasma. Because of this focus and activity, the city's pharmaceutical industry is expected to grow from $2.6 billion to $6.8 billion by 2025.
In 2021; pharmaceutical manufacturers accounted for 38% of new companies registered in Dubai Science Park, including Biocon, India's largest biopharmaceutical company developing medicine to treat diabetes, cancer, and autoimmune diseases.
The landscape for innovation is also being extensively cultivated. Acino, a Swiss pharmaceutical company, and Pharmax, a UAE-based pharmaceutical company, launched the first locally manufactured anti-cholesterol drug to prevent and treat cardiovascular disease, demonstrating Dubai's expanding landscape for locally produced pharmaceuticals and innovative partnerships.
Alliance Care Technologies International, another business partner, is collaborating with Secondcell Bio to accelerate cutting-edge research focused on cell technology and rapid drug discovery to combat rare genetic diseases in the UAE.
Dubai Science Park promotes innovation by enabling growth and development in the pharmaceutical, health, and wellness industries. The community's robust infrastructure and collaborative environment allow success and collaboration, propelling the industry forward by attracting and nurturing skilled talent and business.
UAE also has a Laboratory Complex designed to serve science-related businesses whose activities include research and product development, testing, diagnostics, manufacturing, and production.
UAE Pharmaceutical & Healthcare Spend And Market Growth, Trends And Opportunities
Dubai, as the UAE's largest city, has a significant share of the country's healthcare market, which is expected to grow at a CAGR of 10% from 2019 to 2023.
At US$1,200 per capita, the UAE already has one of the highest healthcare expenditures in the world. The industry currently generates more than US$4.63 billion in annual revenue and comprises 75 insurance companies offering over 12,000 insurance policies.
The UAE medical device industry is also attracting a lot of foreign money. According to a recent study published by Fitch Solutions, the content partner of Arab Health 2021, the UAE's medical device market will be worth US$1.52 billion annually by 2025, growing at a CAGR of 4.4% between 2020 and 2025.
Dubai has launched several initiatives to promote advanced healthcare technology, such as 3D modeling, robotic pharmacy, digitization, health apps, and smart fitness.
Pharma Industries have focused on UAE business development over the last decade. The UAE's pharmaceutical market is expected to grow to $4 billion by 2020, representing an 8.5 percent CAGR from 2019. The UAE was one of the first countries to recover and is still a popular destination for foreign investors. With Covid remaining a threat, healthcare spending in the UAE is expected to reach $21.3 billion by 2021, accounting for 4.6% of the country's GDP by 2026.
The UAE government has implemented several long-term plans to achieve sustainable growth in the healthcare and pharmaceutical industries. According to the Dubai Industrial Strategy 2030 and the Abu Dhabi Vision 2030, the pharmaceutical industry is one of the main subsectors to develop due to its future growth prospects, export potential, and mid-to long-term economic impact.
The UAE government's long-term goal has been to reduce its reliance on imported pharmaceuticals. According to a Dubai Chamber of Commerce and Industry report, the UAE imported AED 14.9 billion in pharmaceutical products in 2018. In one year, UAE companies exported AED 1.2 billion in pharmaceutical products and re-exported AED 3.8 billion. Local pharmaceutical manufacturing is now a top priority for the government, the ministry of health, and legislative bodies.
UAE Pharmaceutical Market By Drug Type, By Product Type, By Application, By Distribution Channel, By Region, Competition Forecast & Opportunities, 2027
Due to the expanding healthcare industry and investment, the UAE pharmaceutical market is expected to grow at an impressive CAGR during the forecast period, 2023-2027. Surging demand for efficient pharmaceutical products from the country's growing population will drive the growth of the UAE pharmaceutical market in the next five years. Factors such as the rise in the prevalence of lifestyle diseases due to the adoption of a sedentary lifestyle are propelling the growth of the UAE pharmaceutical market in the forecast years of 2023-2027.
The UAE pharmaceutical market is divided into four sections: drugs, products, applications, distribution channels, competitive landscape, and regional distribution. The market is divided into generic drugs and branded drugs based on drug type. The market is divided into two product types: prescription drugs and over-the-counter drugs.
The market is further subdivided based on application into cardiovascular, musculoskeletal, oncology, anti-infective, metabolic disorder, and others. The market is divided into three segments based on distribution channels: retail pharmacy, hospital pharmacy, and e-pharmacy. The market analysis also investigates regional segmentation to create regional market segmentation, divided into the Dubai region, Sharjah region, Abu Dhabi region, and the rest of the UAE.
Dubai Heating, Ventilation, and Air Conditioning Industry Overview
HVAC (Heating, Ventilation, and Air Conditioning) systems are critical components of any residential, commercial, or industrial structure. The popularity of HVAC air distribution products in the UAE has grown due to sustainability trends and building performance. HVAC (Heating, Ventilation, and Air Conditioning) systems are critical components of any residential, commercial, or industrial structure. The popularity of HVAC air distribution products in the UAE has grown due to sustainability trends and building performance.
UAE HVAC Market Overview
The heating, ventilation, and air conditioning (HVAC) market in the United Arab Emirates (UAE) is expected to grow by 5.2% to $2,774.7 million by 2030, from $1,873.1 million in 2019. (2020–2030). The key factors driving the industry are increased infrastructure investments in the commercial, industrial, and residential sectors and growth in the country's tourism industry.
The COVID-19 scenario has hampered the growth of the UAE HVAC market on both the demand and supply sides. The government's lockdown has hit the tourism industry the hardest; it contributes typically around 12% of the country's GDP. Similarly, non-essential commercial operations in the UAE have ceased, reducing the demand for HVAC equipment.
In 2019, the Dubai region had the largest share of the UAE HVAC market. Increased construction activity in the city in response to Dubai Expo 2020 is expected to drive the HVAC industry, while government efforts to reduce reliance on the oil and gas sector and redirect resources toward sectors such as infrastructure development and tourism are expected to support the industry's growth in this Emirate in the long term.
UAE HVAC Market Outlook, Market Size Share, Scope and Forecasts
The rising demand for HVAC systems and equipment in the residential, commercial, and industrial sectors drives the UAE HVAC market. HVAC systems and equipment improve residents' comfort during harsh weather conditions, such as extreme summer or winter temperatures. Furthermore, the rapid installation of HVAC systems in educational institutions and government buildings is expected to boost market growth during the forecast period. Furthermore, rising technological advancements and demand for energy-efficient HVAC systems are expected to drive market growth in the coming years.
The market was worth $1,873.1 million in 2019 and is expected to be worth $2,774.7 million by 2030. This expansion will be fueled by the UAE's expanding residential, industrial, commercial, and hospitality sectors.
An increase in infrastructure investments and the tourism industry's expansion will drive the UAE heating, ventilation, and air conditioning (HVAC) market growth at a CAGR of 5.2% between 2020 and 2030.
The HVAC market in the UAE is divided into three segments: offering, end-user, and region. The offering segment is split into two parts: equipment and service. Heating, ventilation, and cooling systems are additional equipment classifications. The cooling category dominated the market in 2019 and is expected to continue to do so throughout the forecast period. This is primarily due to the desert nation's hot and humid conditions and rapid urbanization, increasing the demand for cooling equipment in the coming years.
Because of the increased construction of large infrastructure units, Dubai became the largest HVAC market in the UAE in 2019. These brisk construction activities are in response to the Dubai Expo 2020 event. Furthermore, the government is focusing more on the construction sector to reduce reliance on oil and gas. Tourism also plays a vital role in developing Dubai's infrastructure to contribute to market growth.
The UAE's capital cities, Abu Dhabi and Al Ain are expected to have the highest growth rates in the UAE HVAC market in the coming years. This expansion will be driven by the Abu Dhabi 2030 plan, which aims to attract at least 7.9 million tourists annually while reducing reliance on gas and oil. The construction of new offices and retail spaces is also expected to be a significant factor that will significantly increase market revenue.
As a result, increased construction activity and infrastructure expansion across the UAE will drive market growth. Due to the commissioning of newly constructed buildings and extreme climatic conditions, demand for HVAC equipment and services will rise during the forecast period. Furthermore, the government's extensive support will propel the market to new heights in the future.
HVAC Industry in U.A.E is Booming due to Expansion of Hospitality Sector
According to the UAE government, the travel and tourism sector received nearly 7% of all investments in the country in 2017. This factor is expected to drive the heating, ventilation, and air conditioning (HVAC) market in the United Arab Emirates (UAE) at a 5.2% CAGR between 2020 and 2030, bringing it to $2,774.7 million by 2030, up from $1,873.1 million in 2019. The United Arab Emirates is a popular tourist destination due to its sleek skyscrapers, luxurious hotels, thrilling amusement parks, grand mosques, and rich history and culture.
Seeing the country's tourism potential, the government is encouraging the construction of hotels, malls, public transportation systems, and other commercial infrastructure to cater to the growing number of vacationers and business travelers. This would significantly boost the UAE HVAC market because all such commercial spaces would be outfitted with various cooling and ventilation equipment once completed.
Dubai Wholesale And Retail Trade Industry Overview
In terms of output, the Wholesale and Retail trade sector (including motor vehicle and motorcycle repair) accounts for the lion's share of Dubai's economy. In 2018, this sector generated AED 105.1 billion in value-added or 26.4 percent of GDP. The industry is also the second largest employer, employing an estimated 573,007 people (20.65% of Dubai's workforce) in 2018. The sector is essential in maintaining consumer spending in Dubai. Through backward and forward linkages, it helps sustain economic activity in other sectors such as transportation and storage, food, and lodging. This trade sector attracted the most investment (capital formation) in 2018, accounting for AED 15 billion, or 20% of total investment in that year.
The Wholesale and Retail sector's growth rate in real value added was 1.3 percent in 2018, which was lower than the economy's rate of growth of 1.9 percent, and sector employment fell by 1.9 percent. The sector's growth is expected to reach 1.9 percent in 2019, slightly slower than Dubai's GDP growth. However, growth in this sector is expected to increase by 4.5 percent in 2020, aided in part by an increase in the number of visitors to the Emirate for Expo 2020, outpacing the economy's overall growth rate of 3.6 percent. In anticipation of the positive impact of Expo 2020, total retail space available in the Emirate has increased, and the sector's future capacity will need to adapt to meet the growing challenge of e-commerce.
The Economic Importance of the Wholesale and Retail Sector
Wholesale and retail is the most critical component of Dubai's tertiary or service sector, followed by transportation and storage, housing, accommodation and food, financial and insurance, and other service activities. The services sector is the most significant contributor to Dubai's GDP, accounting for 79.9% of the total in 2018, up from 78.8% in 2014. Since 2010, the services sector has consistently contributed more than 78% of GDP to the Dubai economy. Retail and wholesale trade activities account for roughly one-third of the entire services sector.
Dubai & Global Trends in E-Commerce
The growth of B2C (Business to Consumer) e-commerce presents both a challenge and an opportunity for Dubai's Wholesale and Retail Sector and its potential for value-added growth in the economy.
The difficulty stems from the need to respond to the negative impact that online retailing is having on so-called "bricks and mortar" individual retail outlets and shopping malls worldwide, with in-store traffic declining and stores closing. According to global data, traditional retail outlets and shopping malls suffer economically as e-commerce grows.
The MENA region and the GCC countries have seen slower growth in the e-commerce market than other parts of the world with similar demographics, disposable income, smartphone penetration, and internet access. However, it is now rapidly expanding, with the UAE leading the region in e-commerce.
According to a joint report by Visa and Dubai Economy, online sales are expected to grow the fastest, with estimated market size of US$12.3 billion in 2019, up from US$5.0 billion in 2015, and growing at a rate of 23% per year until 2022.
According to the UAE Ministry of Economy, e-commerce accounted for 10% of total sales in the country in 2018.
3 Retailers in Dubai, like the rest of the world, will respond to the challenge in various ways. However, the initial strategic response has been for many large retailers to establish their online shopping and delivery services. There will be an imitation of the strategy used by stores in other parts of the world, such as global furniture retailer IKEA, which is converting its out-of-town centers into facilitation warehouses and opening city center stores to persuade consumers to visit, see the items, and then buy them online.
Many retailers focus on providing convenience and unique experiential elements to maintain foot traffic in their physical stores. The ability of stores located in geographically concentrated top global prime shopping locations such as New York, London, Paris, Singapore, and including Dubai to enhance the shopping experience while benefiting from efficiency gains by separating the act of browsing and purchasing from delivery creates a positive growth opportunity for e-commerce.
The development of storage and fulfillment centers that deliver economies of scale is changing the nature of the logistics industry worldwide. Another positive impact of e-commerce is how it is propelling the wholesale and logistics segments of the sector forward through the evolution of supply chains. Delivery to a fulfillment center, warehousing, packing, and finally, last-mile delivery to the customer are all part of e-commerce logistics. This logistics market will grow as online purchases increase, resulting in increased output and value-added, as well as the potential for job creation and investment in the wholesale and retail sectors. E-commerce will also have an impact on the transportation and storage industries, as well as the real estate sector. With its excellent air and sea transport connections and existing role in global supply chains, Dubai has a real opportunity to act as a facilitation center for e-commerce within the GCC countries and the MENA region.
Mapping Dubai’s International Trade Advantages in Goods And Services
Dubai has one of the world's most open economies and relies heavily on foreign trade for economic growth. Total trade flows (exports, re-exports, and imports) in merchandise trade account for more than three times the Emirate's GDP, and service work flows are significant and growing. Dubai has a long history of leveraging its advantageous geographical location as a regional trade hub and connecting trade flows in other regions (Asia, Europe, and Africa). The Emirate has established an excellent reputation for shipping and air hub activities and developing free zones with world-class infrastructure, making Dubai appealing to multinational corporations as an ideal location for participation in Global Value Chains (GVCs).
Despite a slowdown in the rate of growth of GDP and international trade in the global economy, Dubai's total foreign trade value reached AED 1.3 trillion in 2018. From 2006 to 2009, the Emirate's foreign exchange grew at a 14 percent annual rate, more than twice the growth rate of Dubai's nominal GDP, which grew at a 7.3% yearly rate. Following a brief decline during the global financial crisis, Dubai's foreign trade increased at a ten percent annual rate from 2010 to 2014. Since the mid-2014 drop in oil prices, Dubai's foreign trade growth has slowed, owing primarily to slower external demand from neighboring countries and geopolitical instability.
Furthermore, Dubai is facing increased competition, which is jeopardizing its position as a trade hub. Many countries in the region have taken significant steps to implement trade reforms to remove barriers that have hampered local businesses' ability to compete in global markets. Furthermore, some regional countries have increased their investments in port infrastructure, gradually challenging Dubai's areas of specialization in ports and related logistics. More broadly, the global economy is rapidly changing due to several critical factors, including technological change, the expansion of the digital economy, and the growth of large emerging economies, most notably China and India.
The Belt and Road Initiative (BRI), a primary foreign economic and commercial policy centered on infrastructure investment projects and efforts to facilitate trade and mobility with partner countries and regions, is actively pursued by China, Dubai's leading trading partner.
Read our articles to know more about Dubai: