NEW DELHI: The horrific slaughter of diners at a Dhaka cafe has fanned fears that surging terrorist violence may imperil the giant garment industry in Bangladesh, which built its economy on cheaply supplying fashion to the world’s big-name brands.
Gunmen stormed the Holey Artisan Bakery in the capital’s diplomatic quarter on Friday evening, rounding up foreign hostages before murdering 20 people with explosives and machetes, in a brutal targeting of the small expat community.
Terrorists released gruesome images of corpses lying in crimson pools on the cafe floor as they claimed responsibility for the deadly 11-hour siege. Most of the victims were Italian or Japanese.
“This attack will turn away foreigners,” said Faruque Hassan, senior vice president of the Bangladesh Garment Manufacturers and Exporters Association, which represents 4,500 factories.
“The impact of this attack will be very damaging for the industry. We are now extremely worried,” added Hassan, whose Giant Group supplies clothes to retailers including Britain’s Marks & Spencer and Next.
Even before the cafe siege, Bangladesh, the world’s second-biggest exporter of apparel after China, was reeling from a wave of Islamist-linked killings of religious minorities, liberal activists and foreigners, including an Italian aid worker last September.
Concern is mounting that the South Asian nation, wracked by political instability since independence in 1971, is sliding into deeper chaos, with under-pressure police arresting 11,000 people last month in a desperate crackdown.
“The hostage crisis in Dhaka is a terrible tragedy reflecting how security has deteriorated in the country,” said Sarah Labowitz, co-director at the NYU Stern Center for Business and Human Rights in New York.
The violence presents “a serious threat to the economy,” Labowitz said.
“This kind of attack will surely keep (fashion) buyers away in the months leading up to the holiday shopping season.”
Although a quarter of its 160 million people still live below the poverty line, Bangladesh has clocked growth of around six percent nearly every year since the turn of the millennium.
That’s largely thanks to garment exports, the lifeblood of its economy, accounting for more than 80 percent of total outbound goods last year.
Between them the nation’s clothing factories employ more than four million people, most of them rural women.
Ulrica Bogh Lind, a spokeswoman for H&M, which sources many of its clothes from Bangladesh, told AFP the Swedish chain was “deeply sad about the tragic incident.”
“We are of course monitoring the situation in Dhaka closely.”
Trade-dependent Bangladesh may suffer the same fate as Pakistan, fears Ahsan Mansur, a former representative for the International Monetary Fund in Islamabad.
“I saw the decline of a promising economy into a terrorist hotspot. This attack reminds me of those days, although I hope things won’t turn out that way,” said Mansur, now executive director of the Policy Research Institute in Dhaka.
When extremist violence began to spread in Pakistan, he said, the first sign of financial malaise was expat families packing their bags, then trade and investment crumbled.
“The perception that Bangladesh is a potential terrorist hotspot can seriously hit our export potential and growth prospects.”
Yet plucky Bangladesh has ridden out numerous storms, seeing off threats from labor unrest, mass transport blockades and large-scale political paralysis — as well as workplace disasters.
Clothing exports swelled nearly 10 percent in the year to June, to $27.3 billion, industry figures show.
The deadly Rana Plaza factory collapse that killed at least 1,138 workers in 2013 shocked the world, heaping opprobrium on Western retailers seen as exploiting impoverished workers.
But the tragedy prompted retailers to act on appalling safety conditions in their factories, where fires and other accidents are frequent.
Brands set up two global alliances to make workshops safer and cleaner — although it remains a work in progress.
While retailers will watch Bangladesh closely, industry experts point out that unrest plagues many developing countries where labor is cheap.
As Islamist attacks in France, Brussels and the US over the past year show, the threat of extremist violence is not confined to single countries.
“If foreigners give in to fear, terrorism’s political mission will have succeeded,” said Devangshu Dutta, chief executive of Third Eyesight, a retail consultancy in New Delhi.
“Exports and foreign investment are both critical (in) the upliftment of a very large poverty-stricken population,” Dutta told AFP.
“The contribution of foreigners is vital. It is important for everyone to remain engaged.”
Bangladesh garment industry fears for future after attack
Bangladesh garment industry fears for future after attack
UAE’s residential real estate market to see softer home sales
- Moody’s sees mild softening of prices over the next 12 - 8 months as rising completions add supply
RIYADH: The UAE’s residential real estate market is expected to see a modest decline in developer sales and a mild softening of prices over the next 12 to 18 months as rising completions add supply, Moody’s said.
Despite near-term easing, the credit ratings agency noted that developers are supported by strong revenue backlogs and solid financial positions, while regulatory measures have reduced banks’ exposure to the construction and property sectors, helping to preserve robust solvency and liquidity buffers across the financial system.
The broader trend is reflected in the UAE’s real estate market, which recorded a strong performance during the first three quarters of 2025, according to Markaz.
In Dubai, transaction values increased 28.3 percent year on year to 554.1 billion Emirati dirhams ($150.88 billion), while Abu Dhabi recorded total sales of 58 billion dirhams, up 75.8 percent year on year. The number of transactions in Abu Dhabi rose 42.3 percent to 15,800.
The report said: “After five years of extraordinary growth in the UAE’s residential real estate market, particularly in Dubai, we expect developer sales to decline modestly and some price softening over the next 12 to 18 months as rising completions add supply.
“From 2026 to 2028, around 180,000 new units will be completed in Dubai, a significant increase from prior years that is likely to weigh on demand and slow price growth.
“However, fundamentals remain supportive, underpinned by continued population growth and an influx of high-net-worth individuals. Rated developers’ credit quality will remain resilient, supported by strong revenue backlogs, front-loaded payment plans and solid financial positions.”
Munir Al-Daraawi, founder and CEO of Dubai-based Orla Properties, told Arab News the Moody’s report underscores what the firm is seeing on the ground, namely “a market that is successfully transitioning from a period of extraordinary growth to one of sustainable stability.”
He added: “While a mild softening of prices and a modest decline in sales are anticipated over the next 12 to 18 months, these are natural adjustments for a maturing global hub like Dubai.”
Al-Daraawi believes the the projected delivery of 180,000 units between 2026 and 2028 is not a cause for concern, but “a reflection of the UAE’s long-term appeal to high-net-worth individuals and a growing population.”
The CEO added: “The report rightly points out that fundamentals remain supportive, underpinned by Dubai’s 2040 Urban Master Plan and a significant influx of global talent.”
He went on to note that the resilience of the sector is further bolstered by the solid financial positions of developers and the strong regulatory measures that have shielded the banking sector from excessive exposure.
“This creates a robust ecosystem where credit quality remains high, even as we navigate a more competitive landscape. For boutique and luxury-focused developers, the current environment emphasizes the importance of quality, execution, and strategic capital allocation — factors that will continue to define the UAE’s real estate success story,” said Al-Daraawi.
The current environment emphasizes the importance of quality, execution, and strategic capital allocation.
Munir Al-Daraawi, Founder and CEO of Orla Properties
Riad Gohar, co-founder and CEO of BlackOak Real Estate, told Arab News that while Moody’s is correct to say that supply is rising, the conclusion of a broad slowdown ignores the structure of this current economic cycle.
He added: “First, this is not a debt-fueled market. Around 83 percent of Dubai residential transactions in 2024 and 2025 were non-mortgaged. That means the market is equity-driven, not credit-driven. When cycles are not built on leverage, corrections are typically shallow and segmented, not systemic. “
He added that the macroeconomic backdrop is stronger than in past cycles, driven by sustained non-oil gross domestic product increase, structural reforms, population growth, and capital inflows aligned with long-term national plans.
“Demand is not purely speculative; it is driven by migration, business formation, and wealth relocation,” the CEO said.
“Third, prime vs. non-prime must be separated. Any pressure from increased completions is more likely to affect marginal locations, not established prime areas supported by global HNWI inflows. Historically, prime assets in Dubai have shown resilience even during broader market pauses,” Gohar added.
He continued to clarify that for smaller developers, some may feel margin compression if sales moderate, but this becomes a consolidation phase, not a systemic risk.
“Banks’ real estate exposure has already declined to around 12 percent of total loans — from 19 percent in 2021 — and NPLs (non-performing loans) are low at 2.9 percent, meaning financial contagion risk is limited. Regulatory escrow structures and stricter oversight further reduce spillover,” the CEO said.
“We are in a capital-rich, cash-driven cycle, regulated market with strong GDP and population growth. If anything, weaker fringe players exiting would strengthen the core not destabilize it,” he said.
The Moody’s report highlighted that while most developers it rates will generate “substantial excess cash” over the next two to three years, there will be fewer opportunities to make significant investments, especially within the Dubai real estate market.
As well as prompting a shift toward corporate governance and, in particular, how developers deploy their rising liquidity, some firms are looking to diversify beyond their core business models.
“For instance, Binghatti has recently launched its first master-planned villa community, marking a departure from its historical focus on single-plot high-rise developments, as demand for villas continues to outperform that for apartments,” said the report.
It continued: “Others are looking beyond Dubai and the UAE for growth, whether through geographic diversification or expansion into unrelated sectors.
“For example, Damac’s owner, Hussain Sajwani, has announced significant planned investments in data center development across the US and Europe.
“Emaar continues to develop actively in Egypt and India and is evaluating potential entry into China and the US. Aldar has started development projects in the UK and Egypt, while Arada has begun building in Australia and the UK and Sobha is expanding into the US.”
