The UAE is on the cusp of breaking into the Top 20 countries when it comes to “ease of doing business”, in the latest rankings issued by the real estate consultancy Knight Frank. It managed to move up five spots to be placed 21st, while among the other Gulf states, Bahrain was placed 66th and Saudi Arabia at 92nd and Qatar in 83rd spot. In all, 190 countries are ranked.

The rankings are based on 10 parameters, including how insolvency issues are resolved and contractual obligations are carried out.

The UAE’s push up the rankings was brought on by sharp increases in “resolving insolvency”, where it moved from 104th place in 2017 to 68th. And in “enforcing contracts”, it improved from 25th to 12th place. When it comes to a new business wanting to set up, it takes eight days on average to get through the licensing requirements. (In comparison, it would take six days to do so in New York. And when it comes to Hong Kong, the process takes but two days, according to Knight Frank.) “There has been a concentrated drive by the (UAE) government and its various entities to improve these rankings,” said Taimur Khan, Senior Analyst at Knight Frank’s regional operations.

The top rankings are held by the likes of Singapoe, Hong Kong, the US and UK. France and China were at 31st and 78th spots, respectively.

Going forward, much will depend on how well regulatory changes are effected and make it more attractive for businesses to be here. ‘’As Dubai and the UAE drive changes in legislation and competitiveness on a global level, we are witnessing companies having a Middle Eastern presence,” said Matthew Dadd, Partner — Commercial Leasing & Agency at Knight Frank. “With reforms — including dual licencing — being introduced, this is allowing companies to locate onshore and offshore businesses from the same physical location, thus streamlining operations.”

That office rents in Dubai and Abu Dhabi are still on the softer side is another factor helping businesses manage their costs better. As against the $2,499 a square metre it costs to rent an upscale property in Hong Kong, or $1,501 in New York’s super-prime commercial district, in Dubai, this was $751 (as of Q3-2017.) Grade A occupiers could also demand more from their prospective landlords, with citywide vacancy rates in such buildings at 14 per cent for the same period. In comparison, Hong Kong’s prime office space only had a 1.7 per cent occupancy rate.

A just released Dubai real estate update from Standard & Poor’s says such pressures will continue to be in place. “Average office rents seem to have bottomed out, which may prove sustainable seeing that expected new supply is limited,” it adds. “We foresee a continued stabilisation trend for the office segment. Polarisation continues as rent differentials between “Grade A” properties (highest quality, located in the central business district) and the rest are still significant.”