Dubai: Investor confidence in Dubai is on the upswing. Foreign direct investment (FDI) grew 7 per cent to Dh16.5 billion in the first half of this year compared to the same period in 2011, according to statistics compiled by Dubai FDI, the foreign investment office in the emirate’s Department of Economic Development (DED).
The presence of larger projects is the most notable feature of the FDI inflows, said Fahd Al Gergawi, CEO of Dubai FDI, said. Moreover, 1.5 per cent of the FDI is coming from 115 projects being initiated by 113 companies.
Al Gergawi highlighted that the overall FDI trend in January-June 2012 reaffirms Dubai’s status as an investment destination of choice and reflects growing confidence globally on growth prospects across key economic sectors.
“More and more firms and investors worldwide are now convinced of the unique growth opportunities Dubai provides as a regional hub and business centre. The rise in number of multinationals relocating to Dubai and in FDI across key industry sectors in the emirate validate this,” he said.
“Dubai FDI is particularly proud to see such positive outcomes achieved by the government of Dubai as our focus is on comprehensively promoting business in Dubai and enabling investors to take advantage of Dubai’s competitiveness.’
Almost 93.9 per cent of the FDI projects initiated in the first half are new investments, compared to 88 per cent in the first half of 2011. Almost 45 per cent of the projects came from new investors.
Average capital investment in the new projects is Dh149 million, while average capital investment for expansion is Dh56 million.
The sector-wise breakdown of new FDI initiatives shows real estate, leisure and entertainment, chemicals, financial services, business services, food and tobacco, health care, communications and metals as investor favourites in Dubai. The top 10 sectors together attracted 77 projects worth Dh15 billion, representing 67 per cent of the total projects and 93 per cent of the net capital invested.
Similar to the first half of 2011, India, US, UK, Saudi Arabia, Qatar, Germany, Switzerland and France were the leading countries investing in Dubai.
The top 10 countries accounted for 83 projects, or 72 per cent of the total, and their combined investment of Dh15.5 billion accounted for 94 per cent of the January-June 2012 FDI. The UK and India accounted for 29 per cent of the FDI projects, mainly in business services.
“It is also noteworthy that a new breed of investors is finding Dubai the place to be. Dubai’s world-class infrastructure, convenient links to the East as well as West and distinguished lifestyle is especially appealing for this generation of ambitious and innovative entrepreneurs,” Al Gergawi added.
The 7 per cent rise in Dubai’s FDI will spill over into a similar rate of growth in the future, Irfan Al Hassani, a UAE-based economist, told Gulf News.
Dubai’s ports and airports function as a global business hub for the entire Gulf region with its other infrastructure praised for meeting global standards.
“The emirate’s facilities and well-planned infrastructure, including airports and ports, in addition to logistics services, have all made Dubai the preferred business centre in the region,” Al Hassani said.