Noting that the sales rebound in Dubai’s residential property market has been “remarkable,” HSBC said in a recent report that the demand for bigger homes would further boost the property sector in Dubai.

Dubai’s residential property market could expect to be reignited by “the globally synched post-pandemic migration to larger homes,” Khaleej Times cited from the report.

Demand for larger homes with more outside space had already increased during the lockdown last year. In July 2020, 493 villas and townhouses were sold in secondary sales, the highest ever number of transactions to have been recorded in one month for this unit type. Online search trends also increased significantly (by 58% for one portal) as compared to the same period in 2019.

The last two quarters have seen prices appreciate, following years of depreciation, Global Head of Real Estate Research Stephen Bramley-Jackson and analyst Alok Baid wrote in the HSBC report. Q2 2021 was likely to follow suit, they added.

Further, HSBC also altered its recommendations for Emaar Properties, the biggest property developer in the UAE, from buy to hold, Bloomberg reported. Developments at the company appropriately captured the trend of migrating to larger homes, the HSBC report said, with Emaar’s stock offering over 90% correlation to property prices, and with the company seeing growth of 3x in five-month sales.

DUBAI'S RESIDENTIAL PROPERTY MARKET TO SEE PRICE RALLY

The comments are in line with a recent report by Morgan Stanley, suggesting that improved demand, supply growth, and lead times could lead to a more optimistic future for Dubai’s property market, with the residential price rally lasting several years.

Government initiative and attractive mortgage rates have been pivotal in growing demand for residential properties in the emirate. Wealthy home buyers are looking to purchase affordable luxury properties in Dubai, which have dropped to more attractive rates. In March this year, a record 84 luxury homes were sold for over USD 2.7 million, and prices for high-end villas also stabilised.

Overall, the residential property market is expected to remain affordable, with oversupply of units and a global pandemic-induced slowdown. An earlier report by JLL noted that Dubai could expect an increase of 9% in the total residential units already in the market.

Dubai’s residential property market can expect to be mostly tenant-led in the short term, with occupiers and landlords striking deals over rental reductions, rent-to-own schemes, and fee waivers.

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Saudi’s Public Investment Fund (PIF), the country’s sovereign wealth fund, has seen a burst of activity in recent weeks following a string of Saudi investments.

Established far back in 1971, the current mandate at the Public Investment Fund is economic diversification, and local and global investments. It aims to have USD 1 trillion in annual assets under management (AUM) by 2025, with yearly domestic investments to the tune of USD 40 billion.

As of 2020, the Fund has reached nearly USD 400 billion in AUM, up from USD 150 billion just five years ago. Shareholder return between 2018 and 2020 stood at 8%.

Here’s a look at the week that was for Saudi’s Public Investment Fund.

RECENT SAUDI INVESTMENTS BY THE PUBLIC INVESTMENT FUND (PIF)

PIF committed 20% of a regional infrastructure fund by Aberdeen Standard Investcorp Infrastructure Partners (ASIIP) late last week. With a fund size of USD 800 million, the capital commitment amounts to USD 160 million.

Additionally, ASIIP also received a commitment of USD 90 million from the Asian Infrastructure Investment Bank, of which Saudi Arabia is a founding member.

The investment was in accordance with PIF’s goals of securing strategic economic partnerships and opportunities, and investing patient capital in sectors with long-term growth prospects, a statement from ASIIP said.

Elsewhere, the PIF struck a partnership with E1 Series to facilitate the world’s first electric powerboat racing competition. The announcement was made at the unveiling of E1 Series’ new electric RaceBird powerboat. 

The Saudi investments are in line with the Fund’s 2021-25 strategy, focusing on sports and Entertainment, and Renewable Energy, a statement said.

The Saudi investments in June come on the heels of a USD 240 million initiative in partnership with the French Development Agency last month, to finance post-pandemic recovery in Africa. Saudi Crown Prince Mohammad bin Salman added that additional Saudi investments to the tune of USD 1 billion through projects, loans and grants, would also make its way under the Saudi Fund for Development.

Meanwhile, PIF also made a series of hiring decisions last week. It established two deputy governor roles, held by Head of International Investments Turqi Alnowaiser and Head of MENA Investments Yazeed Alhumaied. 

It also appointed Eyas AlDossari and Omar AlMadhi as Senior Directors to its MENA Investments Division, and Abdullah Shaker as Senior Director to its Global Capital Finance Division.

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UAE-China trade has been booming in recent years, Abdulla bin Damithan, CEO and Managing Director of UAE-based logistics multinational DP World, said at a recent webinar.

Speaking at the webinar along with the Chinese Business Council in the UAE, bin Damithan pointed to “strong trade relations and people-to-people synergies” resulting in robust UAE-China trade relations, and growing interest to invest in Dubai by Chinese companies.

In another virtual event earlier last month, the Sharjah FDI Office highlighted investment opportunities across sectors for Chinese businesses and investors. 

These sectors included healthcare, pharmaceutical manufacturing, mobility, logistics, agritech, green tech, and advanced manufacturing. While the UAE was China’s largest MENA non-oil trading partner, there were nearly 600 Chinese companies registered in Sharjah alone, speakers at the webinar said.

UAE-CHINA TRADE IN NUMBERS

Chinese exports to the UAE have grown 15.6% annually in the last 24 years, whereas UAE exports to China have increased by 22.8% annually. 

By 2019, UAE-China trade volume had reached the USD 50 billion mark, with prospects to grow this to USD 200 billion by 2030. Major joint initiatives underpinning bilateral relations between the two countries include the Belt and Road Initiative (BRI), the UAE-China Industrial Capacity Cooperation Demonstration Zone, and the Hassyan clean coal power plant.

China remains the UAE’s biggest trade partner by imports, comprising 13.9% of imports. Key products include machinery and electrical equipment, textiles, metals, plastics and chemical products, and furniture.

It is also the country’s third-biggest trade partner by exports (7.2%), with key products including petroleum, transportation equipment, chemical products, and metals.

A report by HSBC outlines earlier initiatives, such as a USD 10 billion fund in 2015, and China’s Asian Infrastructure Investment Bank (of which the UAE is a founding member), meant to strengthen UAE-China trade efforts.

Both countries have been working on free trade zones and export-driven economic zones for ease of trade, in addition to the BRI. The move has yielded results. In 2016, China’s COSCO Shipping, which is the world’s largest container operator, opted for Khalifa Port in Abu Dhabi as its Middle East operational centre. Further, over 15 Chinese companies have established a presence at Khalifa Industrial Zone Abu Dhabi, investing USD 1 billion.

Moreover, both countries also aim to take up joint investments in Africa and the Pacific Islands, the report noted. With 60% of exports from China passing through the UAE, these steps only cement ties with the world superpower.

_{Photo credit: www.oilandgasmiddleeast.com/products-services/34698-khalifa-industrial-zone-abu-dhabi-cuts-fees-for-75-of-its-services}

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The Kingdom of Saudi Arabia (KSA) is the largest country in the GCC, with an estimated population of 32.6 million people.

The nation is undergoing fundamental institutional reforms in all industries, including healthcare, as part of Vision 2030. Population demographics are expected to change, with the ages of 40 and 59 rising by 1.5 times and ages over 60 increasing by more than three times. This would boost the need for health-care facilities and expand the need for specialised care.

Due to this changing age profile, KSA requires a significant number of Long-Term Care (LTC) implementations. The government is looking for private-sector hospitals that specialise in long-term care to refer their patients who need long-term care. In the extended care sector, there are substantial prospects for real estate investors and developers, but realising these prospects will need increased collaboration and service integration among industry players, including healthcare providers and most significantly, regulators. Extended care facilities often have a lower built up area per bed than standard healthcare facilities, which can lead to a greater return on investment (ROI), Lower capital expenses imply a quicker return period as compared to traditional hospital investments.

HEALTHCARE KEY ASPECT OF KSA VISION 2030

Healthcare is one of the key aspects of Vision 2030 and the National Transformation Program (NTP 2020), which aims at improving healthcare systems and facilities throughout the Kingdom. A patient's medical demands fluctuate throughout their lifetime, beginning with preventative care, need-based medical intervention and several other services such as rehabilitation, long-term care, elder care and end-of-life care. According to a recent Gulf Cooperation Council (GCC) survey, Saudi Arabia plans to invest SR 250 billion ($66.67 billion) in healthcare infrastructure and increase private sector involvement from 40 percent to 65 percent by 2030.

Fast food is convenient, unhealthy choices are delicious, and hustling routines do not give much opportunity to exercise. Though people know these are poor decisions, which adversely influence wellbeing, a clear and prompt motivation for people to make the transition is required. This lifestyle increases the demand for surgical daycare centers, due to increase in frequency of number of diseases such as diabetes, obesity, depression, strokes, cardiovascular diseases, blood pressure and such which do not need treatment in typical hospital set-ups. According to World Atlas statistics, Saudi Arabia is one of the world's most obese regions in the gulf.

KSA NEEDS MORE PRIMARY HEALTH CLINICS

To address the rising population demand, the nation requires more primary health clinics and medical centers, establishments for ophthalmology, cosmetic procedures, IVF, and orthopedics, especially in Riyadh and Jeddah. With huge projects like NEOM set to change the dynamics of business, spread over 10,000 sq. miles, will introduce a unique and new lifestyle. The city linking the kingdom to Jordan and Egypt, will pave a path for new opportunities in all business sectors including healthcare and biotechnology. NEOM will be a modern nexus for this critical practice and extensive study, with an emphasis on next-generation gene therapy, genomics, stem cell development, Nano biology, and bioengineering, as well as recruiting talent to research, grow, and apply new technology.

SAUDI REAL ESTATE INVESTMENT TRUSTS (REITs) PROJECTED TO RISE

Saudi Real Estate Investment Trusts (REITs) have more prospects than their global counterparts do. Economic activity in the kingdom is picking up, so rental income for REITs is projected to rise in the near future. Since the output of the real estate industry and REITs is directly proportional, the REITs business is likely to remain intense. However, the government's attempts to encourage affordable real estate, as well as the replacement of the value-added tax (VAT) with a transaction tax, could improve the residential and commercial real estate markets, benefiting REIT funds exposed to these sectors.

The current dilemma which foreign companies face, in the kingdom, pertains to legal, labor and transparency challenges, which is steadily improving. Public-Private Partnerships (PPPs) are a good way to alleviate government constraints while also facilitating increased private investment and involvement in the economy. For decades, Saudi Arabia has used public-private partnerships (PPPs), which combine government agencies with private firms that are aligned in respective sectors. Saudi Aramco, Saudi Airlines, SABIC, and the Haramain High-Speed Railway are a few of the well-known names active in recent projects. PPPs and expropriation of public property is seen as a crucial step toward changing the way the government operates in line with Saudi Vision 2030.

PRIVATISATION OF KSA HOSPITALS

The extent to which public and private foundations can collaborate to create a framework that benefits the local population's well-being and prosperity will determine the market sector's fate. One major challenge is shifting the government's position from implementer to regulator, as well as promoting greater private-sector participation in the kingdom. The privatisation of hospitals would provide government and national benefits and help to speed up decision-making, reduce the government's annual health-care spending, generate additional revenue for the Ministry of Health, and improve health-care facilities.

So, what is our take on the potential opportunities that arise? Land Sterling is in discussions with potential investors and operators about joining the KSA market, where returns can be achieved across a variety of platforms ranging from traditional real estate alliances and built-to-suit acquisitions to long-term strategic partnerships. They strive to improve the use of relevant data and awareness for investors’ worldwide, offering reliable information and leading them to ideal investment opportunities.

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Near a third of all the world’s everyday shipping threads through the choke point between the Horn of Africa and the Middle East. This has left the Republic of Djibouti richer than its neighbours. Over a million containers pass through the nation’s six port terminals each year, and it serves as a key refueling and transhipment post. Projections have it, Djibouti’s economic growth might touch seven per cent this year — double Africa’s present average.

This influx has resulted in the creation of the Djibouti Sovereign Fund (the Fonds Souverain de Djibouti or FSD). But unlike traditional sovereign wealth funds that deploy capital overseas, Djibouti’s new state fund will invest inward, into the development of its own logistics and infrastructure, its goal to finance USD 1.5 billion of domestic business activity over the next decade.

This is not an anomaly, not in Africa. The region's sovereign wealth funds are younger, smaller than their international counterparts, they work instead to attract foreign capital into their economies, to fuel growth, to upgrade their industries, to create jobs. They work to boost resilience to future shocks by investing in crucial sectors: food and water security, healthcare, education, energy and digitisation.

ATTRACTING CO-INVESTORS AND PARTNERS

Over the last decade, 15 African countries — including Morocco, Nigeria, Gabon, Rwanda, Senegal and, more recently, Djibouti — have set up their own sovereign wealth funds. Collectively, these funds manage somewhere around USD 24 billion in assets — not much, not when compared to the sovereign wealth funds in the Middle East and Europe. Norway’s wealth fund, for instance, controls about USD 1.3 trillion in assets. Only the Libyan Investment Authority, whose USD 65 billion in assets still remain frozen under international sanctions, boasts substantial assets.

So, these funds turn to the task of drawing in co-investors and partners from around the world, to funnelling capital into domestic development. Africa is primed for investment, it has all the underlying tenants of robust growth: it’s home to a booming middle class, a young and burgeoning urban population, it has the capacity for new, transformative industries and offers amplified return on investment.

But African funds still have their work cut out for them, explains the International Forum of Sovereign Wealth Funds (IFSWF) in a recent report. African economies suffer from the widespread perception that investment into the continent is either “exotic, risky or humanitarian”.

EMBRACING ESG PRACTICES

To counter this perception, to abate it, African sovereign wealth funds embrace a three-pronged ESG model — that is, a model that takes into consideration the environmental (E) and social (S) impact of their investments, and leverages good governance (G). The region’s sovereign wealth funds have shifted focus to sustainability, given Africa’s vulnerability to climate change. They work to drive material, measurable impact on the lives of the people, in turn building legitimacy at home. And they operate as independent, transparent institutions that have boards consisting largely of non-government directors.

Another standard operating practice of African funds is to prioritise the local over the global — at the onset of the COVID-19 pandemic, the Sovereign Fund of Egypt (SFE) reshuffled investment priorities to focus on healthcare, pharma storage, electricity and agriculture. This paid off: products linked to health, digital tech and agribusiness sectors were in high demand throughout 2020, and existing investments in areas such as medical facilities and supplies and pharma became increasingly profitable.

Now, a year into the pandemic, Africa’s sovereign wealth funds are working relentlessly to stabilise and develop their economies. For those countries that have hefty debt burdens, these funds are stepping in to attract international capital, to stimulate growth, to create legitimate, trustworthy channels for investors interested in doing business in the region.

_{Photo credit: www.eastafricamonitor.com/afcfta-djibouti-obstinacy-threatens-to-undermine-african-free-trade-and-investment/}

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Where once artificial intelligence (AI) was a frontier technology, whose applications were only being discovered, it has slowly seeped into sectors that are both niche and creative, such as architecture.

Because AI is “trained” to think based on data sets, it cannot create something entirely new yet, which is a function of creativity and innovation. So AI cannot yet replace the architect’s creative process.

AI in architecture can, however, provide cutting edge support systems that can push the creative boundaries of what architects can do, and how much time they will need to do it. 

AI IN ARCHITECTURE: WHAT IT LOOKS LIKE

Perhaps the biggest impact that the application of AI in architecture has brought is the ability to process large and multiple sets of data for conceptual design and preliminary iterations. This will essentially give architects “the ability to push a button and get alternatives instantly.”

In parametric design, for instance, parameters are manipulated using algorithms to provide a range of design outputs within minutes. These kinds of generative AI techniques allow architects to build on analytical capabilities, making the experimentation process both flexible and efficient.

In addition to enhancing processes, AI in architecture will also allow architects to build AI into the design fabric, building homes, offices, and cities that are smart and data-oriented. 

IN THE MENA REGION

It’s still early days for AI in architecture within the MENA region (and worldwide as well). There are, however, some promising signs.

In Sharjah, waste management company Bee’ah’s new headquarters, designed by Zaha Hadid Architects, is an example of AI being built into the architectural composition of buildings. Apart from relying fully on renewable energy, the buildings are fully integrated with AI, including facial recognition and energy optimisation, amongst other smart functions.

The growing trend of smart cities and buildings in the MENA region further indicates that architecture professionals and firms in the region will have to increasingly work with AI, both for design outputs as well as their internal processes.

The MENA region, and the UAE and Saudi Arabia in particular, have been forward-looking with their approach to emerging technologies such as AI. The region is already home to architectural marvels, such as Dubai’s Museum of the Future and Giza’s Grand Egyptian Museum. 

Experimental syndicates such as the Middle East Architecture Network, and the Middle East Architecture Lab add to the prospects of AI in architecture. Going forward, this will create a foundational incentive for architects to push the boundaries of what’s possible with AI.

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MENA startups raised USD 110 million from 35 deals in May, led by Saudi startups, according to the latest information from Wamda.

Most of the startup funding was raised in Saudi Arabia, mainly due to increased venture capital activity prompted by the Public Investment Fund’s Jada and government-owned Saudi Venture Capital Company’s fund of funds. 

35 MENA STARTUPS CLOSED DEALS IN MAY

A total of 35 startups raised investments in May. Most of these were seed or pre-seed rounds.

Of these, nine Saudi startups raised USD 46.6 million, led by a USD 30.5 million Series B round by B2B marketplace startup Sary. With the round, ecommerce raised the highest funding by value in May. At the same time, fintech was in the lead by the number of startups that closed a deal during the month.

EGYPT STARTUPS RAISE USD 32 MILLION

Meanwhile, nine Egyptian startups raised USD 32 million in the same month, followed by USD 28.4 million raised by seven UAE startups. Morocco, Bahrain, Qatar, Oman and Jordan raised total ticket sizes of under USD 1 million. 

The gender startup funding gap remains a problem, with USD 6 million raised by a female-led Saudi chalet booking platform Gathern. In contrast, over USD 100 million went to male-led startups in the month.

The sector also saw some M&A activity during May, with the acquisition of UAE buy now pay later (BNPL) startup Spotii by Australian BNPL company Zip. The deal closed at USD 16.3 million.

STARTUP FUNDING SNAPSHOT: THE YEAR SO FAR

April continues to be a highlight month for MENA startups, according to earlier reports from Wamda. In April, 44 MENA startups raised over USD 175 million in startup funding. Saudi Arabia topped the list both by number of startups and startup funding value for the first time. Saudi fintech Tamara’s USD 110 million Series A was the biggest round to take place during April.

Female-led startups struggled here too, with just USD 1.7 million (or 1% of the total startup funding raised) going to five female-led startups.

Startup funding in May represented a drop from the previous month, with MENA startups raising USD 65 million less than they did in April. They did, however, maintain a funding streak of raising over USD 100 million every month since February this year.

As of Q1 2021, MENA startups had raised a total of USD 373 million across 123 deals.

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Emirati property tycoon Hussain Sajwani has made an offer to purchase minority shares in Dubai-headquartered DAMAC Properties in an all-cash deal. Sajwani is the founder of DAMAC, and was also previously chairperson and board director of the company until his resignation earlier last week. He is currently the majority shareholder at DAMAC, owning a little over 72% of the company.

The offer was made through Sajwani’s Maple Invest Co. Sajwani aims to bump up his stake to at least 90% in order to exercise the right to buy out remaining minority shareholders, with an offer price of AED 1.3 per share. This would value the total deal at over AED 2.185 billion, or USD 595 million, at 100% ownership, with DAMAC delisting from the Dubai Financial Market to become a fully private company.

Maple had earlier made an offer of USD 255 million for the acquisition, noting that Sajwani controlled about 88% of the company's shares. It is not clear why the discrepancy occurred, a report by Reuters noted. 

As of Friday last week, DAMAC shares were up 1.56%, trading at AED 1.3 per share. An independent committee to review the offer will be appointed at a meeting of the company's directors on June 13.

DAMAC REPORTED A NET LOSS OF OVER AED 1 BILLION IN 2020

The company had declared a net loss of AED 37 million as of the year ended 31 March 2019, and AED 1.039 billion for the year ended 2020, as compared to a net profit of AED 1.152 billion for the year ended 2018.

DAMAC share price has also fallen from peak levels in August 2017, when it was trading at AED 4 per share. S&P Global noted a negative outlook on the company's credit rating due to issues of chronic oversupply in the UAE real estate market.

Senior vice president at DAMAC Amira Sajwani expects the property market in the UAE to fully recover over the next two years. At the same time, prices are likely to decline in the short term, the senior VP added, due to the pandemic.

Some of the company's iconic properties include the Trump International Golf Club Dubai. A second course, the Trump World Golf Club designed by Tiger Woods, was scheduled to open in 2017, but has now been delayed to at least 2022.

_{Photo credit: www.armsmcgregor.com/latest-news/damac-showcases-luxury-properties-in-beijing/, www.ft.com/content/6c4794ba-efba-11e2-8229-00144feabdc0}

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In order to promote Abu Dhabi culture over the next five years, the UAE’s capital city will be investing AED 22 billion towards creative industries, the country’s official news agency reported. The emirate also announced an overall planned capital commitment of over AED 30 billion for creative industries.

The funding is part of a strategy by Abu Dhabi’s Department of Culture and Tourism (DCT), to boost creative industries in the emirate. 

The AED 22 billion investment will be channelled towards the development of cultural institutions and new museums in Abu Dhabi, including the Zayed National Museum and Guggenheim Abu Dhabi. Some of the funding will also go towards supporting performing arts, music, media and gaming in the emirate.

So far, AED 8.5 billion has already been funnelled into cultural and creative industries in the past five years, WAM reported, including towards Abu Dhabi’s media and gaming hub Yas Creative Hub, Saadiyat Cultural District, and a Creative Visa scheme for creative professionals to work out of the UAE.

STRATEGY FOR ABU DHABI CULTURE, CREATIVE INDUSTRIES FOCUSES ON ECONOMIC IMPACT

The DCT will be consolidating all creative domains under the Culture and Creative Industries (CCI) umbrella. Its 2019 CCI Strategy and subsequent investments are aimed at diversifying the emirate’s economy, Mohamed Khalifa Al Mubarak, Chairman of DCT Abu Dhabi, said. Cultural tourism represents a strategic segment of diversification efforts in the UAE.

"DCT Abu Dhabi’s comprehensive five-year strategy to build on the emirate’s pre-existing success in this area is now seeing diverse yet interrelated sectors streamlined under one organisation. This will greatly accelerate job creation, allowing individuals and businesses to reach new levels of professional and economic success,” Saood Al Hosani, Undersecretary of DCT Abu Dhabi, said.

The consolidation will give the DCT full oversight over Abu Dhabi culture, multimedia, and gaming domains. The DCT will be responsible for the development of these sectors as well.

Goals under the CCI Strategy focus on five areas – policies and systems, talent and professional development, innovation and digitisation, business development, and infrastructure to enhance the quality of life. Over 16 strategic programmes and 800 initiatives are covered by the strategy. Of these, some have already been initiated, while the rest are slated for completion in the next five years.

The DCT will also be announcing a new sector to bolster creative industries in Abu Dhabi, administer the Creative Visa programme, offer training and development initiatives, and regulate strategic initiatives and organisations within the landscape of Abu Dhabi culture. These include Image Nation Abu Dhabi, Abu Dhabi Gaming, and Abu Dhabi Film Commission.

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