Logistics fuelling Dubais recovery

Soon enough Dubai will be amongst the top logistics hubs in the world, as international companies outsource more of their manufacturing processes to the City, experts say

.The FEDERAL Customs Authority (FCA) has indicated that the UAE’s foreign trade has been on the go from the first and Second quarter of 2011, when compared to the same period of the last year. Their initial statistical data also indicates a year-on-year 22% increase in UAE's non-oil foreign trade from January to the end of June, 2011.

According to the Dubai Chamber of Commerce and Industry the direct trade of the emirates has experienced an escalation of 27 per cent during the first 5 months of 2011.

"The transport and logistics sectors represent an important part of the UAE economy, comprising of 10.4 per cent of non-oil GDP," Nabeel Ebrahim, Abu Dhabi University Chancellor, said.

"As the UAE has witnessed tremendous growth and diversification in its economy, logistics in particular has had great success as one of the first industries to develop international growth” Nabeel Ebrahim, Abu Dhabi University Chancellor

Ebrahim also added that Dubai's infrastructure, including transportation (seaports, airports and roads), energy, communications and tourism represents a strong asset and will be sure to encourage companies to set up base in the United Arab Emirates.

With the performance of these industries, Dubai expects growth in their Real Estate market. The factors that contribute to these are as follows.

The demand for housing has received an enormous boost due to the surging logistics and trade industry. These industries create more job opportunities and employees prefer to live closer to work. For example Jebel Ali Free Zone, which is the sixth largest container port in the world and hosts more than 6500 companies with more than 200,000 people working there and of which 80 per cent have to commute.

Residential property is being bought up by companies that are attracted to the City due to its accessibility and widely efficient service sector, in order to ensure housing for their employees.

With Maktoum Airport about to become fully operational as well as the world’s largest airport, it is set to increase the demand for real estate and drive up prices. Knowledgeable investors already realise the investment potential in the near future. “Buy low, sell high”

In addition to the above, property in Dubai is seen as a safe and secure tax free investment opportunity. Investors can achieve rental yields of between 7 and 12 per cent from quality properties.




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