Real estate and infrastructure units are among most valuable sources of income for the whole economy of the UAE: 50 per cent of the country's GDP in 2016 will be formed by revenue gained from these assets, according to a new report from market research consultancy Arcadis.
According to Arcadis’ 2016 Global Built Asset Performance Index, built assets, also referred to as physical assets including any human made/manmade, i.e. unnatural assets like property and infrastructure units, will deliver USD 351 billion to the economy of the United Arab Emirates in 2016.
And in ten years, if current growth conditions stay the same in the UAE by 2026, this revenue may increase by 33% and reach USD 468 billion per annum, the report predicts. Anyway, the fact that such conditions will maintain is undoubtful, partly due to the upcoming events of the global scale to take place in the UAE, meaning, among others, World Expo 2020, which is to be held in Dubai in 2020.
It should be noted also, that, since 2014, the economic return generated by built assets for the UAE’s economy has risen by 16 per cent, while the share of the sector's participation in the country's GDP increased by 4 per cent. These figures are the highest among all countries of the MENA region, according to the Arcadis research.
Such increased profitability of built assets in the UAE over the last two years has been attributed partly to the impact of a lower oil revenues, which previously accounted for the lion's share of the country's GDP, but the process of economic diversification aimed at reducing the country's oil dependency allowed the situation to change. Thus, built assets of the UAE, and mainly property assets, are now in the international investors’ main focus.
Built Asset Performance Index, developed by Arcadis in collaboration with the Centre for Economics and Business Research (CEBR), takes into account the revenue brought by such fixed assets as real estate and infrastructure, i.e. homes, schools, roads, airports, ports, shopping centers, power plants, etc. The research estimates built assets revenue in 36 countries collectively responsible for the 78 per cent of global GDP.