What's at Stake this week?
February 26, 2023
Did you know over 65M passengers made their way through the Dubai International Airport last year? That figure marks a growth of 127% YoY, and even exceeds initial forecasts for 64.3M, rendering Dubai’s airport one of the busiest in the world. Fun fact, the airport welcomed 28M passengers in the first half of 2022 alone! Let’s have a look at some other takeaways from this week 👇
Market Zoom: Dubai
Dubai ranks first in Savills index
A new report from Savills has revealed that both Dubai and Singapore can expect to see price growth rates ranging between 6.0% to 7.9% in their prime residential property sectors in 2023, which will allow them to dominate the price charts and outperform other major global cities this year. This forecast is very much driven by factors like government policies and initiatives to bolster the sector, increased demand from international buyers and high-net-worth individuals, and a desire for more space and luxurious amenities in a safe environment.
This performance is part of a broader trend in both real estate markets as they continue to report new developments in the pipeline and witness a sustained influx of individuals from all over the world with an affinity to spend and lifestyle purchasers.
Dubai, in particular, was ranked first in Savills’ Prime Residential World Cities Index for 2023 as its prime residential property market remarkably outpaced the global market in 2022.
💡Before you read on, learn something new today…
Capital values in real estate refer to the market value of a property, based on its income-earning potential or its potential for future resale. They are calculated by considering a variety of factors, including location, size, age, construction quality, amenities, and the overall real estate market conditions.
Capital values are important because they are used to determine the price of a property when it is sold or leased. (Thanks, ChatGPT!) Carry on…
Other takeaways from the Savills report include…
– In 2022, rental values outperformed capital values across the 30 major cities in the Savills Index.
– Prime rental values increased by 5.9% on average, while capital values increased by an average of 3.2%.
– Dubai, Singapore, and London experienced the fastest increase in prime yields, with the global average at 3%.
– Miami and Dubai recorded the highest growth in capital values at 25.4% and 12.4% respectively, followed by Singapore at 6.8%.
– Dubai and Singapore also saw an increase in prime yields, with Dubai’s prime yields going up by 60 basis points to 5.3%, and Singapore’s by 40 basis points to 2.9%. London’s prime yields only increased by 25 basis points to 3.2% during the same period.
Market Zoom: Saudi Arabia
A global tech hub in the making
According to the latest data from the General Authority for Statistics (GASTAT), Saudi Arabia’s oil export value increased by over 11% YoY this past December to SAR 85.5Bn, while the share of oil exports in total exports rose from 71.9% to 79%. Even though the Kingdom is investing heavily to diversify its economy by reducing dependence on oil, it should come as no surprise still that the world’s leading oil producer and exporter is delivering elevated output levels in the last quarter as demand for the depleting asset continues to grow.
Recently announced at the LEAP tech conference in Riyadh, it was confirmed that the Kingdom continues to plan for digital transformation as the space expands with new innovations and initiatives in line with Vision 2030. Dispersed strategically across different cloud technology providers and leading Big Tech firms, Saudi Arabia announced more than USD 9Bn worth of investments in its tech sector, as part of efforts to “bolster digital transformation in preparation for the future economy”, as reported by The National.
This financial backing from large corporates and the local government will inevitably aid in the development of smart cities, digital infrastructure, and advanced technologies such as AI and 5G networks, as technology is seen as a key pillar in the quest to achieve digital transformation. To further this point, research data has shown that the global digital transformation market could hit about USD 3.95Tn by 2030, up from about $608Bn in 2022.
Some of the core focus areas include financial and health technology, the Internet of Things (IoT), quantitative science, satellites, and space to promote technology and diversify its economy.
The bottom line? The Kingdom of Saudi Arabia’s commitment to expanding and empowering the tech sector is unwavering, as it aims to establish itself as a top global tech hub. Crown Prince Mohammed bin Salman’s ambitious plans have set the stage for significant growth and advancement in the Saudi Arabian tech industry, setting an example for neighboring countries to follow in embracing tech as a powerful tool for economic development.