QUBE Development, the renowned international real estate developer, known for their trailblazing building solutions, shares its insights on UAE’s real estate market, which continues to garner strong demand from investors from all over the world. The growing surge is due to various factors with the off-plan market being the major contributor and responsible for 65 percent of overall sales transactions for the month of August 2024, a 54% volume increase from what was recorded during the same period last year.

According to data analytics online platform, Statista, the UAE real estate market is anticipated to reach a value of AED 2.5 trillion by the end of 2024. This growth is spearheaded by the increasing influx of high-net-worth individuals (HNWIs), who have entered the market looking for strong investment opportunities with a focus on the luxury property sector, primarily in the off-plan market where a high number of ultra-luxury projects and megaprojects are currently underway.

The global interest has been recognized by QUBE, who have recently launched their first residential project ‘Cubix Residences’ located in Jumeirah Village Circle (JVC) and providing a focus on durability, reliability, sustainability, and exceptional quality to the family-oriented community in the area. This is just the first of many projects to follow as the company has announced its plans to invest an additional AED 2.6 billion worth of inventory into the Dubai market by the end of 2025 to continue expanding its portfolio in this prime market.

Construction Director of QUBE Development, Ramy Abdel Kader, commented: “Cubix Residences is progressing on schedule, with construction now reaching 25%. The surging demand for premium real estate in Dubai reinforces our commitment to deliver efficiently and to the highest standards. At QUBE Development, we provide sustainable, high-quality developments that cater to the evolving needs of urban living. As we move forward, we look forward to unveiling more innovative projects that will continue shaping Dubai’s real estate landscape.”

With a commitment to sustainable design and community engagement, QUBE Development’s ambition is to make a positive and lasting impact by enhancing the quality of life for all residents through its future developments. By contributing to the well-being of the community and encouraging a healthier, happier tomorrow for everyone, the company looks forward to continuing its efforts in building communities and fostering a strong sense of connection among UAE residents.

People around the world are getting progressively wealthier – and that doesn’t just apply to those who already own great wealth. Upward wealth mobility is expected to become more pronounced by 2030 and, further out, signs of a horizontal wealth transfer emerge.

In 2023 wealth growth across the world has recovered from its 3% contraction the previous year. The contraction in 2022 was largely attributable to currency effects, i.e. a strong USD. However, the bounce back of 4.2% offset the loss from 2022, regardless of whether it is expressed in USD or local currencies, and was driven by growth in Europe, the Middle East and Africa (EMEA) at 4.8%, as well as Asia-Pacific (APAC) at 4.4%. Moreover, as inflation slowed, real growth exceeded nominal growth in 2023, resulting in inflation-adjusted global wealth growing by nearly 8.4%.

Although global wealth has been on a steady upwards trajectory since 2008, the pace of growth has lost steam in almost all markets. The latest edition of the Global Wealth Report, now in its fifteenth year, highlights the following regional and demographic themes:

• In 2023, adults in EMEA were the wealthiest on average (USD 166,000), followed by APAC (USD 156,000), and the Americas (USD 146,000), but their average wealth grew at the slowest pace since 2008 at around 41% compared to 122% in APAC and 110% in the Americas in the same timeframe.

• Overall wealth has grown fastest in APAC – by nearly 177% since 2008 – and has been accompanied by significant spike in debt, which has grown by over 192% in the same timeframe.

• Although the Americas have trailed the global wealth rebound in 2023, the United States in particular have bucked the trend of slowing growth over time, increasing their compound annual growth rate from 4% between 2000-2010, to 6% between 2010-2023.

• Negative wealth growth in USD between the start of the second decade and 2023 has only been found in Greece, Japan, Italy, and Spain.

• On an individual market level, Switzerland continues to top the list for average wealth per adult, followed by Luxembourg, Hong Kong SAR and the United States.

• The biggest wealth increases in 2023 occurred in Türkiye, Qatar, and Russia, with Türkiye leaving all others behind at a staggering growth of 157%.

• Presently, the United States, followed by Mainland China and the UK have the highest number of USD millionaires, with the US accounting for 38% of global millionaires. By 2028, according to the report’s forecast, the number of adults with wealth of over USD one million will have risen in 52 of the 56 markets analyzed, and is estimated to grow by 50% in Taiwan.

• While average wealth is significantly higher than median wealth in almost all markets included in the report’s sample, the United Arab Emirates, Germany, Switzerland, Israel, and Mexico, among others, have shown stronger growth in median compared to average wealth since 2008. This indicates that adults in lower wealth brackets have seen their wealth increase faster than those in higher brackets.

• Although inequality has tended to increase over the years in fast-growing markets, it has diminished in several developed mature economies and globally, the number of adults in the lowest wealth bracket is in constant decline, while all others are steadily expanding.

Wealth mobility and the horizontal wealth transfer

According to the report, across every wealth bracket and over any time horizon, it is consistently likelier for people to climb up the wealth ladder than slip down it. In fact, the analysis shows about one in three individuals moves into a higher wealth band within a decade and over a thirty-year timespan the chance of escaping the lowest wealth bracket rises to over 60%.

Finally, roughly USD 83 trillion are expected to be passed on within the next two decades. That is roughly the equivalent of the value of all the economic activity in the global economy in a single year. An under-explored facet of this transfer is that a notable amount of this wealth will move horizontally between spouses first, before moving to the next generation. In practice, this means a considerable transfer of wealth to women, considering their comparatively higher life expectancy. Just over 10%, about USD 9 trillion, of the great wealth transfer are expected to be passed on horizontally first, most of it in the Americas.

Iqbal Khan, Co-President UBS Global Wealth Management, said: “Wealth needs careful stewardship and managing it properly needs time, dedication and passion. As the world’s only truly global wealth manager, we understand the shifts and changes in global and local wealth and translate this into opportunities and outcomes for our clients.”

Robert Karofsky, Co-President UBS Global Wealth Management, adds: “Backed by 30 years of data, the Global Wealth Report crafts a clear picture of how wealth is created, how it’s distributed, how it transforms and how it’s transferred. It gives us deep insights and understanding that we can bring to fruit for our clients.”

Paul Donovan, Chief Economist at UBS Global Wealth Management, notes: “The world economy is embarking on a period of profound structural change. Such episodes often create significant changes in wealth patterns. At the same time, wealth is needed to finance the investment in both technology and people that will allow humanity and the planet to thrive in the brave new world. Knowing where and how wealth is held is essential to mobilizing it effectively.”

Dubai International Financial Centre (DIFC) has published a ‘Regional Outlook for Banking and Capital Markets’ report in partnership with LSEG Data & Analytics.

The report focuses on how regional IPO growth is expected to come in three phases. Firstly, the continued privatisation of state-related entities, followed by listings by family-owned companies, and lastly, FinTech and tech-enabled start-ups.

Additionally, the report considers the profile of investors based in the region, especially Dubai, which has attracted a rising number of wealthy individuals and families who are seeking to capitalise on investment opportunities.

Commenting on the report’s findings, Arif Amiri, Chief Executive Officer, DIFC Authority, said: “Driven by the surge in IPOs, capital markets across the MENA region have experienced remarkable expansion, driven by reforms aimed at enhancing market infrastructure and fostering greater foreign and regional investment inflows. With its strategic initiatives and robust regulatory framework, DIFC plays a pivotal role in driving innovation and stimulating growth within the financial sector. Dubai’s IPO boom underscores the city’s status as a thriving hub for capital markets, and DIFC’s role in enabling this acceleration through the firms that drive capital markets and provide advisory services for IPOs will continue to contribute to the dynamic evolution of global finance.”

Multifactor IPO Growth

Following two years of moderate IPO activity, 2024 shows signs of a rebound supported by the postponement of several 2023 deals in anticipation of more favourable market conditions. Based on data published by EY, 51 IPOs took place in 2022, raising USD 22bn, including a mix of both family businesses and the public sector.

The privatisation of state-related entities is leading to greater economic diversification, private sector development and sovereign liquidity creation. As of March 2024, Dubai had followed through on six out of the ten government entities it plans to take public, including Parkin, which was 165 times covered and attracted USD 71bn in orders – a new record for the emirate.

Another recent example includes the November 2023 listing of Dubai Taxi Co., a unit of Dubai’s Roads and Transport Authority (RTA), which raised USD 315mn and was 130 times oversubscribed, while Saudi Arabia’s wider plans to privatise USD 55bn in assets by 2025 reinforce the increasing regional trend towards privatisation.

From the private sector, the listing of family-owned companies is helping to drive business growth, succession planning and enhanced governance and transparency. For example, Al Ansari Financial Services, one of the UAE’s largest remittance and foreign currency exchange companies, owned by a local family group raised USD 210mn from its 2023 IPO, while Spinney’s (Spinneys 1961 Holding PLC), which was incorporated in DIFC to list its shares on DFM, thereby benefiting from its extensive laws, regulations, and stability, listed in April 2024.

Spurred on by the momentum of other, highly anticipated listings, such as Lulu’s forthcoming IPO, there is now an ever-growing list of demonstrable incentives for other family businesses to follow suit. A third wave of IPOs is expected through FinTech, and tech-enabled start-up exits, helping to stimulate new industries with high-growth potential, while creating strong demand from investors and viable exit options for VC investors.  

Dubai as a Capital Markets Hub

Through increased IPO activity, banks, investment banks, brokerage firms and law firms within DIFC’s ecosystem also benefitted significantly from the privatisation of state enterprises, with fees for MENA deals alone exceeding USD 1.2bn and proceeds from MENA equity and equity-related deals exceeding USD 13bn in 2023.

The report also highlights how the region’s capital markets are becoming more mature, driven in Dubai by DIFC’s robust regulatory framework and commitment to innovation. DIFC is also home to more than 230 investment banks, all of which are stimulating capital markets.

Deepening of Dubai’s capital markets and market reforms, aligned with best practice have helped create greater opportunities for investors in different themes of the economy. As outlined in the report by John Wilkinson, Head of Emerging Markets Equity Capital Markets and Managing Director, Goldman Sachs, DIFC is driving this growth as an attractive jurisdiction for incorporation, through its business-friendly approach towards the rule of law, and how the Centre has grown as a venue for global investors.

A Magnet for Investors

The region is home to a vast range of potential investors. Notably, these include family businesses, and wealthy individuals who are represented by the influx of wealth of asset management firms.

According to recent data, the UAE attracted a record-breaking number of High-Net-Worth Individuals (HNWIs) in 2022, which continued into 2023 and beyond. Currently, there are an estimated 109,900 resident HNWIs, including 298 centi-millionaires and 20 billionaires, prompting DIFC’s estimated 370 asset managers to strengthen their presence in the emirate.