The openness and connectivity of the UAE economy, which at an estimated USD410 billion is the second largest in the Arab world, combined with its remarkable transformation drive, make it an attractive proposition for businesses looking to grow in the region.
With the continued shift away from decades of dependence on hydrocarbons, the UAE is set to offer an increasing number of opportunities for investors in healthcare, education, agri-tech and renewables.
HSBC, a founding partner for the UK Pavilion, will contribute to shaping future innovations and translating them into opportunities for clients in sectors such as education, future cities and the circular economy, as well as healthcare and the creative arts.
Over its six-month run, Expo 2020 will add approximately 1.5 percent to the UAE’s annual GDP, or AED22.7 billion (USD6.2 billion), according to an economic impact study by consultancy EY. 2
From 2013, when Dubai was chosen as host city, to 2031, the event and its legacy are estimated to contribute AED122.6 billion (USD33.4 billion) in gross value added (GVA) to the UAE’s economy, and to support around 49,700 full-time equivalent jobs annually.
The revival of non-oil growth means that the UAE economy is likely to expand by 2.2 percent this year and 3.0 percent in 2022 after a 6.1 percent plunge in 2020, according to October forecasts by the International Monetary Fund (IMF). 3
The event is also a boon for the UAE’s vibrant sector of small and medium-sized businesses (SMEs). Over 2,300 UAE-based companies won tenders with the organisation in 2020, while SMEs comprised over half of all vendor contracts entered by Expo 2020 Dubai. 4
Contrary to the trend of falling investment around the world, FDI inflow into the UAE jumped 44 percent to USD19.9 billion in 2020, the highest level since 1970, the government said. 5
The global event will lift travel and tourism, which account for up to 16 percent of the UAE’s GDP, both directly and indirectly through its impact on the supply chain and spending, Oxford Economics said in its third quarter Middle East Economic Insight report. 6
Officials estimate that Expo 2020 will attract as many as 25 million participants, with just the first ten days of the event recording 411,768 visitors. 7
Dubai saw tourist arrivals pick up again to 3.23 million in the first eight months of 2021 as travel restrictions eased, according to data from Dubai Tourism. 8
Dubai’s hoteliers reported 8.8 million guest arrivals in 2020 and an overall average occupancy rate of 54 percent, despite international travel restrictions for more than three months that year. 9
This was driven largely by domestic arrivals as the sector focused on promoting weekend getaway packages for UAE residents.
According to the EY report, hotels and restaurants will contribute AED8.9 billion (USD2.4 billion) to the UAE’s annual GDP during Expo 2020, making them the top contributing sector.
Following Expo 2020, Dubai’s total guest room inventory is forecast to expand to 136,412 in 2023 on the back of increased international demand for premium hotel accommodation, according to Dubai Tourism.
Hot property market
Dubai’s rental market is likely to see near-term prices rises as Expo 2020 has generated property demand especially in areas close to the event.
Rental prices of affordable housing rose by an estimated 14 percent in the third quarter, and luxury housing by up to 30 percent in some areas, with the trend expected to continue in the fourth quarter due to Expo 2020, according to Zoom Property Insights. 10
Property sales are also expected to surge in the final three months of 2021. With 15,926 deals worth AED42.35 billion (USD11.53 billion), July to September has become the best-ever third quarter in terms of transaction value in the history of the Dubai property market. 11
However, despite the strong rebound demand is uneven and oversupply of residential properties will pressure prices in the long run, making the recovery fragile, S&P Global Ratings cautions. 12
Sustainability is a key tenet of Expo 2020 Dubai at a time when the effects of global warming such as drought, water scarcity, pollution and extreme weather threaten to uproot lives across the world.
Some 12,000m2 of photovoltaic (PV) surfaces cover the Sustainability Pavilion’s roof and solar trees. 13 In addition, rooftop solar PV panels on permanent buildings are expected to provide approximately 22 percent of energy required to operate the buildings in the next phase.
Sustainability is also a focus for HSBC, which set out last year an ambitious plan to support the transition to a net-zero global economy by providing up to USD1 trillion in finance and investment by 2030 to help customers switch to more sustainable ways of doing business.
Expo 2020 legacy
After Expo 2020 gates close next March, the site will be redeveloped into a mixed-use area to be known as District 2020, with 80 percent of the permanent infrastructure reused and repurposed. 14
District 2020 is already working with Siemens, Terminus and DP World to create a smart, sustainable business and living hub. It is expected to contribute AED62.2 billion (USD16.9 billion) to the UAE’s GDP until 2031, according to the EY report.
Expo 2020’s legacy will be to align Dubai much more closely with innovation, technology, health and human evolution, making the emirate even more visible on the global stage. By building a more diversified, resilient, sustainable and knowledge-driven economy, Expo 2020 will boost the UAE’s key non-oil sectors as well as SMEs.