DUBAI/LONDON: For a key to the recovery of Dubai's real estate market, one need look no further than the Burj Khalifa, the world's tallest tower, which rises out of the desert floor of the city's gleaming downtown area.
Figures released by the Dubai government this week showed Indian citizens were the main buyers of luxury apartments and commercial space in the Burj Khalifa during the first half of 2012, spending $222 million. Iranians came second with $128 million.
For the Indian buyers, Dubai property is a refuge from currency depreciation that has taken the Indian rupee down about 20 percent against the US dollar since the third quarter of 2011. For the Iranians, Dubai provides a safe place to park money as international sanctions ravage the Iranian economy.
Four years after a property price bubble burst in Dubai, triggering a slide that cut home prices more than 60 percent from their peak, the market finally appears to have stabilized and is recovering in some areas. A major reason is an influx of foreign money using the emirate as a safe haven.
"A lot of people in the Middle East and Russia, Pakistan, the Asian sub-continent are looking for a safe haven," said Farouk Soussa, Middle East economist at Citigroup in Dubai.
"Perceptions are that the real estate market has bottomed out. If you are looking for more long-term investment, the market in Dubai seems reasonable."
Because of the importance of real estate in Dubai's economy — it contributed about 13 percent of gross domestic product last year, almost as much as manufacturing — a healthier property market is likely to have a string of positive effects. Among other things, it may reduce the pressure on indebted state-linked companies that are restructuring their loans.
The recovery is not being felt throughout the market; in less popular areas, especially less affluent districts in northern Dubai, prices have stayed weak, analysts say.
But positive signs have mounted in the first half of this year. Real estate agent Knight Frank's quarterly prime global cities index showed apartment prices in Dubai rallied over 5 percent in the second quarter compared with six months ago.
Average apartment rents in Dubai are estimated to have increased 2 percent in the second quarter, according to a report by property consultants CBRE. Particularly well-situated communities such as Emirates Living and Downtown Dubai may have seen rises of 5 to 8 percent quarter-on-quarter, it said.
The real estate recovery has supported a rebound in Dubai's stock market. Shares in its biggest property developer, Emaar Properties, hit a 15-month high last week and are up 32 percent this year — though much of the company's rising earnings are due to its successful diversification away from residential real estate into hotels and retail.
"We see Dubai real estate performing well over the medium term," said Graham Stock, strategist at frontier fund manager Insparo in London, adding that Dubai to some extent resembled London in the way that safe-haven buying by foreign investors was aiding property prices.
In London, prices have been boosted by investors from countries such as Russia and China because of Britain's political stability and strong legal system, while the sector has also attracted buyers from crisis-hit Greece.
Dubai lures buyers from the Indian subcontinent and Iran because of geographical proximity, easy access through its well-developed web of international links, and large Indian, Pakistani and Iranian communities. Meanwhile, the United Arab Emirates' political stability has attracted Arab money to Dubai.
Money from Afghanistan, created by international aid there, is believed to be flowing to Dubai as nervous businessmen prepare for the withdrawal of most foreign troops from that country by the end of 2014.
Foreign investors bought real estate assets in Dubai worth 28.3 billion dirhams ($7.7 billion) in the first half of 2012, up 36 percent over last year, Dubai government figures show.
Nobody is expecting the market to come close to resuming the wild boom seen before 2008; prices will take many years, perhaps decades to regain their peak levels.
"Dubai's property market will improve, but gently. Not at the 40 percent growth per quarter that we saw during the boom," said Loic Pelichet, Dubai-based assistant vice president for research at NBK Capital.
"The boom of 2008 is very unlikely ever to happen again. That was just massive speculation. There is recovery in certain places, but there's still a lot of inventory coming into Dubai."
Twenty-four thousand new residential units are scheduled to be delivered in Dubai during the second half of 2012, and a total of 41,000 units by the end of 2014, consultants Jones Lang LaSalle said. The existing number of residential units is estimated to be about 344,000.
Pelichet also said it was unclear whether property prices would continue rising when safe-haven demand related to the Arab Spring eventually dried up.
But there are reasons to think the market may continue recovering for some years at least. One is the fact that by the standards of the top international cities, Dubai is still fairly cheap in the wake of its market crash.
Apartments in the 828-meter Burj Khalifa range from about $710 to $1,035 per square foot, according to real estate brokers. This is much cheaper than average prices in prime areas of London, which can hit $3,000 or more per square foot.
Secondly, Dubai may attract new flows of safe-haven money even if its existing ones start to dry up. The UAE dirham's peg to the US dollar will help to make Dubai attractive if, for example, a partial collapse of the euro zone sends funds fleeing from European currencies.
The exposure to the dollar's exchange rate could turn sour if the United States is caught in a debt crisis. But in that case, the comfortable budget positions of Gulf economies — the UAE is expected to post fiscal surpluses of over 5 percent of gross domestic product this year and next, according to a Reuters poll of analysts - mean that more than almost anywhere else, the Gulf will be able to spend its way out of trouble. That could attract investors from around the world to Dubai.
Safe haven status aids Dubai real estate recovery
Safe haven status aids Dubai real estate recovery
Saudi Arabia sets global benchmark in AI modernization
- Executives hail the Kingdom’s robust infrastructure and strategic workforce programs
RIYADH: Saudi Arabia is emerging as a global leader in artificial intelligence, according to executives from OpenText, one of the world’s largest enterprise information management companies.
With 22 years of international AI experience, Harald Adams, OpenText’s senior vice president of sales for international markets, said the Kingdom’s modernization efforts are now setting a global standard.
“From my perspective, Saudi Arabia is not only leading the modernization towards artificial intelligence in the Middle East, I think it is even not leading it only in the MENA region. I think it is leading it globally,” Adams told Arab News.
In an interview, Adams and George Schembri, vice president and general manager for the Middle East at OpenText, discussed the Kingdom’s significant investments in AI during the inauguration of OpenText’s new regional headquarters in Riyadh.
“So for us (OpenText), from our perspective, it was a strategic decision to move our MENA headquarters to Saudi Arabia because we believe that we will see here a lot of innovation coming out of the country, we can replicate not only to the MENA region, maybe even further to the global level,” Adams said.
The new headquarters, located in the King Abdullah Financial District, will serve as a central hub for OpenText customers and partners across the Middle East. Its opening reflects a broader trend of tech giants relocating to Riyadh, signaling the Kingdom’s rise as a hub for global AI innovation.
Adams attributed Saudi Arabia’s lead in AI modernization to a combination of substantial financial backing, a unified national strategy, and a remarkable pace of execution.
“I mean, a couple of things, because the ingredients in Saudi Arabia are of course, quite interesting. On the one hand side, Saudi Arabia has deep pockets and great ambitions. And they are, I mean, and they are executing fast, yeah,” he said.
“So from that perspective, at the moment, what we see is that there are, especially on the government side, I can’t see any other government organizations globally moving faster into that direction than it is happening in Saudi Arabia. Not in the region, not even on a global level, they are leading the game,” he underlined.
Schembri added, “Saudi’s AI vision is one of the most ambitious in the world, and AI on a national scale is not good without trusted, secured, and governed, and this is where OpenText helps to enable the Saudi organizations to be able to deliver on the 2030 Vision.”
“The Kingdom’s focus on AI and digital transformation creates a powerful opportunity for organizations to unlock value from their information,” Schembri stated.
“With OpenText on the ground in Riyadh, our customers gain direct access to trusted global expertise combined with local insight — enabling them to manage information securely, scale AI with confidence, and compete on a global stage,” he added.
DID YOU KNOW?
• Saudi Arabia ranks 5th globally and 1st in the region for AI growth under the 2025 Global AI Index.
• The Kingdom is also 3rd globally in advanced AI model development, trailing only the US and China.
• AI is projected to contribute $235.2 billion — or 12.4 percent — to Saudi Arabia’s GDP by 2030.
The inauguration of OpenText’s new regional headquarters was attended by Canada’s Minister of International Trade and Economic Development, Maninder Sidhu, and Jean-Philippe Linteau, Canada’s ambassador to Saudi Arabia.
Sidhu emphasized the alignment of Saudi Vision 2030 with Canada’s economic and innovation goals.
“His Highness (Crown Prince Mohammed bin Salman) and Vision 2030, there is a lot of alignment with Canada, as you know, with the economic collaboration, with his vision around mining, around education, tourism, healthcare, you look at AI and tech, there’s a lot of alignment here at OpenText Grand opening their regional headquarters,” Sidhu told Arab News.
Saudi Arabia’s AI ambitions are projected to contribute $235.2 billion — or 12.4 percent — to its GDP by 2030, according to PwC. The Saudi Data and AI Authority, established by a royal decree in 2019, drives the Kingdom’s national data and AI strategy.
One flagship initiative, Humain, chaired by Crown Prince Mohammed bin Salman, was launched in May 2025 under the Public Investment Fund. It aims to build a full AI stack — from data centers and cloud infrastructure to models and applications — positioning Saudi Arabia as a globally competitive AI hub. The project plans to establish a data center capacity of 1.8 GW by 2030 and 100 GW of AI compute capacity by 2026.
Saudi Arabia is also expanding international partnerships. In May 2025, Humain signed a $5 billion agreement with Amazon Web Services to accelerate AI adoption domestically and globally, focusing on infrastructure, services, and talent development.
The Kingdom ranked fifth globally and first in the Arab region for AI sector growth under the 2025 Global AI Index, and third worldwide in advanced AI model development, behind only the US and China, according to the Stanford University AI Index 2025.
Education is another pillar of Saudi AI strategy. Starting in the 2025-26 academic year, AI will be taught as a core subject across all public school grades, reaching roughly 6.7 million students. The curriculum will cover algorithmic thinking, data literacy, and AI ethics.
OpenText executives emphasized their commitment to supporting Vision 2030 and the national AI strategy through workforce development.
“OpenText has put a lot of investment in the Kingdom, right. We brought cloud to the Kingdom, we’ve opened our headquarters in the Kingdom, we’ve basically hiring Saudis in the Kingdom, We basically building, if you like, an ecosystem to support the Kingdom. And on top of that, what we’re doing is we’re putting a plan together, if you like, a program to look at how we can educate, if you like, the students at universities,” Schembri said.
“So this is something that we are looking into, we are basically investigating and to see how we can support the Saudi nationals when they come into the workplace. And I’m really excited. I have Harry who is, our leadership who’s supporting this program.”
“It’s something that we are putting together. It’ll take some effort. So it’s still in play because we want to make sure what we put it basically delivers on what we're trying to achieve based on the vision of Saudi,” he added.
“The younger generation is sooner or later either working for us or maybe for a partner or for maybe for a customer. So that’s why we are to 100 percent committed to enable all of that,” Adams said.
