Abu Dhabi and Dubai have climbed the ranks of a global standard of living survey.
Tomorrow's exclusives tonight:
Industry Insights e-newsletter Stay ahead of the pack and get the pick of the premium Business content straight to your inbox. Sign up
Dubai offers the best quality of life in the Middle East, according to a report released yesterday by Mercer, a human resources, outsourcing and investment services consultancy.
Dubai was ranked 74th on the Quality of Living list, an improvement of one point from last year's report, while Abu Dhabi city moved up five steps, taking the 78th spot.
However, Abu Dhabi outperformed its neighbour in terms of personal safety, taking 23rd place. Dubai followed behind in the 39th spot in the ranking, which was based on internal stability, level of crime, effectiveness of law enforcement and the host country's international relations.
"Dubai and Abu Dhabi had an increase in criteria this year, mainly due to improvements in international schooling availability, medical supplies, and tackling infectious diseases, so these three criteria for Dubai have the maximum score … but we look at 39 different criteria," said Zaid Kamhawi, who leads Mercer's survey practice in the Middle East.
Regionally, Muscat came in 101st place, closely followed by Doha at 106, Manama at 113 and Kuwait City at 120. Baghdad was ranked last in 221st place due to ongoing security and stability concerns.
Globally, Vienna offers the best standard of living, with Zurich and Auckland following in second and third place, respectively. Munich was fourth, while Dusseldorf and Vancouver were both ranked fifth.
The survey is designed to help governments and companies calculate compensation packages when making overseas appointments.
But experts say cities that offer a good quality of life can also be more attractive to businesses and entrepreneurs.
"Bangalore, Palo Alto, and Santa Barbara, California are all said to have attracted entrepreneurship due to the quality of life," said Stephen Mezias, a professor of entrepreneurship and family enterprise at Insead business school in Abu Dhabi. Prashant K Gulati, an entrepreneur and angel investor based in Dubai, said the city had become even more attractive following the downturn.
"There's no question that Dubai is an attractive place for people to live, and in the last two years the cost of living has substantially reduced because of rents," he said.
Mr Gulati moved to the UAE 17 years ago intending to stay for a couple of years. He said it was easy to start a business in the country, but that was not why he stayed.
"It became something like that. The way we looked at it was it was a gateway to opportunity."
gduncan@thenational.ae
More than 60 per cent of owners in some apartments building in Dubai are not paying their service fees, creating havoc for cash-strapped homeowner's associations
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
COMPANY PROFILE
Name: Lamsa
Founder: Badr Ward
Launched: 2014
Employees: 60
Based: Abu Dhabi
Sector: EdTech
Funding to date: $15 million
