Dubai on the Upturn?

The recent instability in nearby Arab countries is proving beneficial to Dubai as it’s increasingly being seen as a safe haven within this region.

Dubai enjoys political stability, an open economy, and as such the Department of Economic Development has said it is seeing increased interest from businesses and recorded a 17% growth in licenses granted in 2010 which followed cuts in minimum capital requirements. Citigroup is also forecasting growth of up to 4% in 2011 with 6% in 2012.

This growth is most easily seen in the airports and hotels. Passenger numbers passing through the international airport in January rose by 10% year-on-year. International freight volumes rose by 3.9%.

Hotel occupancy is up to 81% even though there are new hotels opening all the time. Some of this is probably due to the unrest as room occupancy in Beirut and Cairo fell by 40% in January and February, while Bahrain's rates fell by 20% in February.

This newfound optimism is also spreading to the property market and the current abundance of empty residential and commercial property is attracting many new arrivals, not least because of the preferential leasing rates being offered.

At the moment the property regulator is reviewing units planned for completion up until 2016; trying to fit supply to demand, while estate agents say that the numbers of transactions are increasing as interest from North Africa in particular shows strong growth.

However some experts believe the long-term picture remains uncertain due to the political instability in the region. There is the worry that some investors may view Abu Dhabi and Mumbai as offering greater opportunities for longer term gains.