World Expo 2020 to boost UAE real estate and tourism sector

Updated 29 November 2013
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World Expo 2020 to boost UAE real estate and tourism sector

With Dubai winning the World Expo 2020 bid, the emirate requires around $43 billion (47 percent of the estimated 2013 GDP) to significantly upgrade its infrastructure according to a research report by Deutsche Bank.
This will boost employment, population and tourist growth.
A bulk of this investment will go into expanding the hotel and leisure industry, while around $10 billion will be spent to improve transportation infrastructure.
The biggest beneficiary should be the real estate sector, which has to cater to the increased demand for new hotel and infrastructure projects.
Deutsche Bank’s report continues to see positive momentum in the Dubai property market, triggered by attractive yields and property prices close to historical average.
With Dubai hosting World Expo 2020, the sector should continue to attract strong investor interest.
Dubai property prices are currently up around 50 percent since the 3rd quarter 2011 but still 45 percent below the peak of 2008 and close to the average price of the last 8 years. Compared with other major cities in the world, Dubai offers attractive property prices and rental yields and a low tax environment. Moreover, Dubai’s “safe-haven” status, strategic location and growing tourism sector continue to attract investor interest.
The Al-Maktoum International Airport, the newly developed airport near the Expo site, started passenger operations on 27 October.
When fully completed the airport will be able to handle 12 million tons of cargo and 160 million passengers annually, making it the largest international airport by some margin.
Besides this, Dubai has also initiated an expansion plan for its existing Dubai International Airport to increase its existing capacity from 60 million to 90 million passengers per year by 2018.
Winning the Expo can further facilitate the “Dubai Vision” target of handling 20 million tourist arrivals by 2020.
Increased tourist arrivals and an upbeat business climate are positives for the hotel and leisure industry as well as the retail sector.
About 25 million visitors are expected for the World Expo 2020 event, 71percent of which will be non-domestic visitors.
Dubai was voted as the host city to conduct the World Expo 2020 event in the Bureau of International Expositions’ 154th General Assembly.
This will be the first World Expo to be hosted in the MENASA region.
Dubai was able to outbid the competition from Sao Paulo (Brazil), Ekaterinburg (Russia) and Izmir (Turkey) with its theme of “Connecting minds, Creating the Future”.
The Expo Live support package of 150 million euros for developing countries to aid their participation and the 100 million euro Partnership Fund to spur innovations, ideas and entrepreneurship on sustainable development projects helped sway the votes in Dubai’s favor.


Saudi-backed SoftBank to ramp up tech investment

Updated 20 June 2018
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Saudi-backed SoftBank to ramp up tech investment

  • SoftBank CEO Masayoshi Son to step up company's "unicorn hunting" investment strategy
  • Saudi Arabia's PIF has contributed $45 billion to SoftBank's Vision Fund

LONDON: Japanese conglomerate SoftBank will double down on its ambitious tech investment strategy, in a move that could create opportunities for further collaboration with Saudi Arabia’s Public Investment Fund (PIF).
SoftBank — which owns Japan’s third-largest telecoms operator — has emerged in recent years as one of the world’s largest tech investors, acquiring stakes in companies including Chinese e-commerce giant Alibaba, and UK chipmaker ARM Holdings.
It last year launched the $100 billion Vision Fund, boosted by a $45 billion investment from PIF. It attracted $93 billion in funds last year, aided by contributions from Abu Dhabi’s Mubadala Investment Company, Apple, Foxconn and others, making it the world’s largest buyout fund.
The Vision Fund has invested in disruptive firms, especially those in the technology space, including Swiss pharmaceuticals startup Roivant, office space company WeWork, and enterprise messaging service Slack.
CEO Masayoshi Son signaled that such dealmaking will become even more of a focus for SoftBank.
“I have spent 97 percent of my time on managing the telecoms business and only 3 percent on investing,” he told investors at the group’s annual meeting on Wednesday, Reuters reported.
Reversing that balance will allow SoftBank to grow faster, he said.
Son’s comments fit with a transformation underway at SoftBank from a domestic telecoms firm to “unicorn hunter” — as Son termed it — focusing on late-stage startups around the world.
Last month, SoftBank invested $2.25 billion in GM Cruise, the carmaker’s autonomous vehicle unit, complementing its shareholdings in China’s Didi Chuxing, the world’s largest ride-sharing app, as well as rivals Uber, Grab and Ola.
The Vision Fund will initially invest $900 million in GM Cruise Holdings, investing the remaining $1.35 billion when GM’s Cruise AVs are ready for commercial deployment. The investment gives the Vision Fund a 19.6 percent stake in GM Cruise.
Saudi Arabia’s PIF has been key to SoftBank’s tech investment strategy with its contribution to the Vision Fund, with the Kingdom also benefiting directly from partnerships with SoftBank.
Son said in November that SoftBank planned to invest as much as $25 billion in the Kingdom in the next three to four years, and aimed to deploy up to $15 billion in Neom, a futuristic city to be built on the Red Sea coast.
PIF and the Vision Fund in March announced a partnership to build the world’s largest solar project in Saudi Arabia, with a capacity of up to 200 gigawatts, in line with the Kingdom’s solar ambitions as set out in Vision 2030.
The agreement will establish an electricity generation company in Saudi Arabia, and will commission two solar plants with a capacity of 3GW and 4.2GW by the end of next year. It envisages localizing a significant portion of the renewable energy value chain in the Saudi economy, including research and development and the manufacturing of solar panels.
SoftBank shareholders on Wednesday approved the appointment of three executive vice presidents — SoftBank unit Sprint Corp’s former chief executive, Marcelo Claure, and former bankers Katsunori Sago and Rajeev Misra.
Bolivian-born billionaire Claure was appointed SoftBank’s chief operating officer in May, tasked with driving cooperation between the group’s portfolio companies. Former Goldman Sachs executive Sago became chief strategy officer on Wednesday and will focus on group investment. Misra runs the Vision Fund.
Son yesterday bemoaned the so-called conglomerate discount weighing on SoftBank’s shares at its investor meeting.
He said when the market value of stakes the firm holds in companies such as Alibaba Group Holding and ARM Holdings are taken into account, SoftBank’s shares should be trading above 14,000 yen ($127), rather than about 8,000 yen currently.