IPOs Initial Public Offers fostering Dubai’s Business and Economy

Global economic recession of year 2008 had badly hit the economy of Dubai and property prices showed downfall of 65%. After experiencing four years of consecutive downfall, real estate sector of Dubai showed first sign of recovery in year 2012. Recovery signs also support investors to regain their confidence and they rejoin the real estate industry to make investments. Good progress rate of business and real estate sector has enabled State Government to take significant steps to clear debts and generate funds to stabilize Emirate’s economy. IPO Initial Public Offers, selling stakes/shares of Governmental companies among public is a very bold initiative taken by State Government. IPO can generate funds quickly. IPOs also help Dubai Government to protect itself being a defaulter.

How IPO Helped Dubai Government?

IPO has helped government to generate $26billion funds after selling Islamic and non-Islamic bonds in 2013, whereas $17.93 billion bonds will mature in next year. Sheikh Ahmed bin Saeed Al Maktoum, head of the emirate’s Supreme Fiscal Committee, clearly mentioned that stock market still needs more companies to sell their shares to general public via IPO to generate more funds. He further said ICD, Investment Corp. of Dubai; the Emirate’s main state holding company can be the next potential IPO. ICD is a huge company, which possesses shares in more than 30 companies including Emirates (world’s biggest international airline). He further quoted that Dubai is committed to repay its debts and will do “whatever we have to do.” Issuers in Dubai or IPOs have sold securities of $5.8 billion so far in 2013. Government’s strong interest to generate funds and profitable investment opportunities predicted that economy will expand 4.6% on average between 2012 and 2015, which is more than twice of the average economical growth in previous 4 years.

Positive Outcomes of IPO


Clearing debts and generating more funds can expand business andinvestment opportunities in the region. Dubai Government has efficiently regained its previous status by selling 30-year bonds and 10-year Islamic bonds of total worth $750 million in the month of January 2013. Further they also reduce their borrowing by 40%. Top financial officers further shares that Government has refinanced companies to clear their debts, with total $3.75 billion in 2012 in addition to a 3.3 billion Dh ($898 million) liabilities in April 2013. Reduced credit risk in the emirate also provoked Issuers in Dubai to maximize bond sales during this year. According to Dubai Financial market General Index ranked Dubai as third best performer after Ghana and Argentina in year 2013. 

About Abu Dhabi

Following Dubai’s footstep Abu Dhabi has successfully got it recognized as gem of Middle East. It is not only the capital Emirate of United Arab Emirate but it is also the largest UAE Emirate with biggest oil reserves. Spreading over the total area of 67,340 sq km on north-eastern part of Persian Gulf on the Arabian Peninsula, the Emirate consists of total 200 natural islands. Abu Dhabi is bordered by the Kingdoms of Oman and Saudi Arabia to east and south respectively and Dubai to the northeast. Abu Dhabi is the main Island of this Emirate whereas other important islands are Saadiyat, Al Reem, Delma and Sir Bani Yas Island. Emirate’s main Island Abu Dhabi is located just 250 Metres from mainland of UAE. Moreover, it also has an electrifying coastline of 700 Km.

Abu Dhabi is Famous for…

Abu Dhabi also possesses two fascinating oases of UAE Liwa (south-southwest of main city) and Al Ain in main city of Emirate. These oases are extremely fertile providing lush green views and good water resources. Emirate also known to possess world renowned largest and amazing sand dunes “Hajar Mountains” on its eastern region. Hajar Mountains are also known to possess huge ores of copper. The western region of capital Emirate consists of over 50 villages, whereas Zayed City is capital city of this region.

Hajar Mountains

More facts about Abu Dhabi

Abu Dhabi possesses diverse geographical landmarks other than deserts, mountains and coasts. It also has waterfalls, forest, caves, lakes and natural oases. Waterfalls can be observed on Jebel Hafeet during winter after rainfall; Jebel Hafeet mountain series also have several caves of archaeological importance. Plus Abu Dhabi has Saxaul dew forest, which is found inland to the south region of Abu Dhabi. Last but not the least Abu Dhabi displays an odd population makeup like other UAE emirates specially Dubai. UAE nationals form only a small part of 20-25% in total population of Abu Dhabi as compared to expat’s huge contribution of 75-80%.

After observing its potential to be the next business and tourism destination of UAE and Middle East, developers and investors are now focusing to build Abu Dhabi. State government is also taking interest to revamp Abu Dhabi’s image from oil producing giant to a business, finance and tourism spot of United Arab Emirate. 

Dubai Rental Hot Spots

State of the art infrastructure facilities, luxury accommodation, numerous business and job opportunities, zero taxes and negligible crime rate have made Dubai a most preferred choice among second home seekers and job seekers.  Whether, you are thinking to settle down in another country as your second home or you want to improve your standard of living by working abroad, Dubai can efficiently execute your needs. The second largest emirate has transformed itself from a small fishing village into a business and trade hub in Middle East. Although, global economic recession of year 2008 badly hit Emirate’s economy, it has regained its momentum. Property prices and rental rates have been recovered and if you are thinking to avail this profit earning opportunity this is the right time. Real estate investors can make good profits after investing in Dubai rental hot spots.

What are the main features of rental hot spots in Dubai?

Dubai rental hot spots are define as residential communities that are located on the prime positions in the city. Well connected with major areas of the city provide easy access to city center. In order to become a residential hot spot in Dubai, neighborhood must provide good educational, shopping and entertainment facilities for its residents along with comfortable accommodation. Proximity to major super markets, metro stations and beach is important feature a rental hotspot must have. Such ultra modern communities are capable to attract everyone from local residents to second home seekers and migrant workers.  In addition to these modern life amenities, rental hot spots also offer excellent security for residents and travelers visiting these communities. Rental hot spots are not only capable to execute diverse accommodation needs rather they also provide good business facilities for entrepreneurs. As they also provide easy access to city business centers.

Famous Rental Hot Spots in Dubai for Year 2013

Residential real estate sector of Dubai mainly provides two major types of accommodation options for migrants. Accommodation options include Apartments and Villa Communities. Again Dubai apartments can further subdivided in to various types like studio apartment, hotel apartments and conventional 1-2 or 3 Bedroom apartments. These apartments are very popular among foreigners as they are bit affordable as compared to Dubai villas. Villas are more popular among local residents. Below is the list of famous rental hot spots with rent rate in Dubai for year 2013.

Dubai apartment rental hotspots

• The Greens by Emaar, with highest rise in rent 28% for 2 bed apartment, 22% for studios and 15% for one bed apartments. Studio and one bed apartments in the same project can be rented on AED45,000 to AED55,000 pa and AED55,000 to AED75,000 pa respectively.
•  Dubai Marina has displayed 18%, percentage rise in rent rate for two bed apartments
• Downtown Dubai has secured third position, with percentage rise of total 16% in rent rate for two bed apartments.

Dubai Villa rental hotspots

• Arabian Ranches has remained on top position with rental hike of 22% in villa rental rate.  3-bed villa rents starts from AED130,000 to AED220,000 per annum whereas four bed villa rents ranges AED170,000 and AED270,000 pa
• Jumeirah Islands is known for its luxury lifestyle. It has been showing percentage rise of 6.4% for villa units of 3-4 bedrooms.  Four bed villas are available AED280,000 to AED330,000 pa, whereas three bed units can be rented on AED240,000 to AED300,000 pa.
• Palm Jumeirah has also become the most costly villa community with highest rent rate between AED300,000 and AED400,000 per annum for four bed villa units.

It has been observed that well developed communities in Dubai that are capable to provide daily life  amenities like health, education, shopping and leisure activities along with strong infrastructure facilities have good potential to become rental hot spot in Dubai.