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RB, Aldar Clearly a core driver is demographics. Abu Dhabi has grown to being a city of 1 million people in short order from the late 1960s to now. It will grow to 3 million by 2030. In addition, people realize that we are building a sustainable economy, not simply one based on oil and natural gas, and that we have an extremely robust economic model.

NM, CBRE I completely agree. The quantity of stock that is being developed at the moment will only work if we continue to attract people to come and live here. And to put it into context, the quantity of offices in Dubai at the moment is around 30 million to 33 million square feet or so. We think that there’s probably approximately another 80 million square feet under construction, and that requires a population of 4 million or 4.5 million people here by 2015 to make it work. If this doesn’t happen, there’s going to be a very high amount of vacancy in Dubai, and that’s going to impact on Abu Dhabi as well. So the key for the success of the country, and all the Emirates, is the continued attraction of people to come and live here.

KTQ, Nakheel Another key reason is the fulfilment of the need for a hub between the Asian time zone and London. So a major driver for the development of Dubai is as a hub for global commerce, much as Singapore and Hong Kong developed. So Dubai has a very fast-growing port, a very fast-growing free zone now with a critical mass of companies and a growing airport. The only difference here is that development seems to be running at 10 times the speed! And we should give credit for that to the government and its commitment to sustainable, well-planned development.

IO, JLL Jones Lang LaSalle’s World Winning Cities Programme reviews the competitiveness of cities around the world based on a host of metrics and drivers of real estate and city success. The programme is also used to predict the rising urban stars among emerging markets. In 2008, we’ve identified Abu Dhabi as a standout, having the most favourable prospect of any of the emerging World Winning Cities. By way of comparison, when we first launched the survey in 2002, Dubai was assessed with a similar status and is now firmly established as one of the 21 Emerging World Winning Cities. So these two cities over a range of measures are places that investors recognize that they have to be.

NM, CBRE Another change that will encourage investment here is that some of the local organizations, particularly families, are finding that they’re over-invested in the GCC or the Mena region and are looking for opportunities to export their capital. The easiest way to do that is through co-investment. So we’re seeing, particularly in Abu Dhabi, some of the trading families eager to attract European investors, not to exchange capital but for asset swaps. This means that we export capital and have inbound capital in the same transaction, and it allows each entity to understand the other’s market. It’s a way to quickly open up the market, and by the year-end I expect one or two major deals of this kind.

Stability and proximity

KTQ, Nakheel Another point: Dubai and the UAE as a whole have always been regarded as a safe haven. The area is politically stable in an unstable part of the world. That attracts investment. And clearly the position of the UAE is perfect: take a four-hour flying radius from Dubai and there are 1.6 billion people inside that circle, from Pakistanis to Russians.

IO, JLL That’s an important point. People looking in from the west often perceive the Middle East generally as a higher-risk market. Those 1.6 billion people see the Gulf very differently: as a safe haven for investment. If you’re from the Asian subcontinent or some other neighbouring countries of wealth, this is a commercially compelling safe haven for inbound investment. A lot of western investors miss that point, but it is a key underpinning for the market.

Macro versus speculation

Euromoney Is the buy side taking this long-term, macro view, or is the region seen more as a flip?

TH, Pramerica A little bit of both. There is a strategic element, because we don’t think that the oil money and the liquidity and the demographics are going away. At the same time, there is such a dearth of good modern office space that we can find projects in which we build and sell in the short term and generate very high returns.

NM, CBRE I think one of the important things is that the transfer of money is now two-way. For the first time over the past 12 months or so we’ve seen the arrival of foreign institutional capital here as part of the global trend of increasing appetite for cross-border investment. We reached a milestone at the end of last year with more than 50% of every penny spent in real estate investment being spent out of the country of origin. In addition, we have great returns to be achieved in this marketplace, we’ve got an immature investment market, and the arrival of foreign capital into the Middle East region at the moment is only around 11% of the total money spent. This comes at the same time when the allocation of cash to real estate as a proportion of overall portfolios has gone up, and it’s increasing from around 6%, probably to around 10% by 2012. So there’s more money invested and the allocation’s going up. People need new locations.