
New Markets Open as Qatar Blockade Ends
A positive new beginning awaits the United
Arab Emirates (UAE) and Qatar as the latter’s three-year blockade comes to an
end in 2021, indicating positive implications in the countries’ business
relations.
Being the region’s distribution hub, the
UAE’s reopening of borders for Qatar after its diplomatic crisis is expected to
generate far-reaching and positive implications in terms of cross-border trade,
investments, boost in travel and tourism, and further development of real
estate which are key pillars of the UAE’s Gross Domestic Product (GDP).
The reopening of the air space between the
two countries, home to half a dozen international airlines, is seen to generate
more income for the aviation and tourism sectors of both nations. While
accounted for only one percent of UAE visitors, Qataris represented high
spending among consumers especially for luxury goods and hospitality services.
The restoration of the countries’ relations is expected to greatly support the
UAE’s retail and hotel sectors.
In real estate, the UAE has attracted
capital from countries in the gulf region in the past for having the most
developed market in the Gulf Cooperation Council (GCC). And in 2016, the Dubai
Land Department (DLD) reported that the sum of real estate investment
transactions for the said year exceeded AED 91 billion from 55,928 investors.
Investors particularly from Qatar and
Kuwait cumulatively accounted for AED 2 billion worth of property transactions
among a thousand Qatari investors, accounting them to the top 10 most active
investors in Dubai’s residential market according to Dubai Land Department
(DLD). Shops and offices in the UAE that provide stable source of income and
good returns within the established areas of Dubai such as Downtown, the Palm
Jumeirah, and Dubai Marina were also points of focus for these investors.
This data shows that with proper
re-establishment of trust in business relations and without the impediment of
diplomatic turmoil unlike before, these numbers could well be reached and
breached considering the future events that will significantly boost UAE’s
income generation.
In 2017, following the tumultuous
diplomatic conflicts involving different countries that resulted in economic
blockades including the UAE, a significant number of Qatari investors
liquidated their entire portfolio at a discount of 10-15% below the market
price before the initial two-week deadline to leave the UAE. The rest having
unable to dispose of their assets during the blockade explored asset swap
opportunities instead.
It is expected that former and upcoming
Qatari investors will likely take time to gauge new UAE market opportunities
this time, considering the investors’ limited time window to divest back in
2017. Business connections and diplomatic relations needs to be revamped and
trust needs re-establishing in order to further strengthen Qatar’s root in the
UAE market. It is highly likely,
however, that Qatari investment volumes will gradually increase over the coming
year.
The perceived lower geopolitical risk and
the expected boost in consumer and investor sentiment implies positive
contributions in the economy especially this year ahead of significant events
such as the Expo 2020 starting in October in Dubai and the 2022 FIFA World Cup
in Doha.
Also, with the development and application
of vaccines against the global pandemic in full roll this year, normalcy would
slowly but surely enable the return of more business establishments and create
more opportunities.
#
Land Sterling is a market leader in real
estate consultancy based in Dubai, Abu Dhabi and Riyadh. Backed with qualified
experts with over 100 years of cumulative experience, Land Sterling provides
professional property expertise cutting through various regions including the
Middle East, North Africa & Europe. Land Sterling has a team of experienced
consultants with an in-depth knowledge of the Middle East property market at
your service. Send an email to info@landsterling.com or call us on +971 4 380 8707
to find how we can best help you.