Dubai Mall takes the lion's share of luxury goods sales

The Dubai Mall accounts for about half of all luxury goods purchases in the emirate, according to a study by Bain & Company.

In total, Dubai represents about 30 per cent of the regional market and 60 per cent of the UAE's luxury goods sector, the report said.

Worldwide revenues from luxury goods sales are expected to grow up to 50 per cent faster than global GDP, with an increase of 4 to 5 per cent this year and 5 to 6 per cent annual average through 2015.

The Middle East is growing at a steady pace, with Dubai remaining the "centre of gravity" of the region and the only city that attracts foreign luxury consumers from countries such as Russia and India.

"The Middle East is now the 10th largest luxury goods market with sales exceeding €6 billion [Dh28.34bn]," said Cyrille Fabre, a partner with Bain & Company, who leads the retail and consumer products practice for the Middle East.

"Local consumption, intra-region tourism and the strong historic relevance of hard luxury and perfumes [and] cosmetics are key market drivers. Dubai is the heart of the regional market."

Globally the luxury goods sector is being fuelled by a change in tourist consumption habits as they seek out new destinations such as Dubai and become more savvy about what they buy, said the report.

Every year, more "high earnings but not rich yet consumers", who are also known as Henrys, become potential customers.

And a rise in the middle class in emerging countries has created a new generation for luxury brands to target.

Globally, absolute luxury items - high-end products with no logo - lead the way, while watch consumption has declined as retailers destock and Chinese consumers buy fewer timepieces. Leather goods and other accessories continue to be strong and spending on apparel has enjoyed some recovery.

Around the world, Japan will return to growth at 5 per cent and Europe remains a challenge for luxury retailers, with flat to 2 per cent growth.

The Americas will experience overall growth of 5 to 7 per cent, while China is expected to stabilise at 7 per cent.

South East Asiais expected to outpace them all to record 20 per cent growth.

gduncan@thenational.ae

The rules on fostering in the UAE

A foster couple or family must:

be Muslim, Emirati and be residing in the UAE
not be younger than 25 years old
not have been convicted of offences or crimes involving moral turpitude
be free of infectious diseases or psychological and mental disorders
have the ability to support its members and the foster child financially
undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially

A timeline of the Historical Dictionary of the Arabic Language

2018: Formal work begins
November 2021: First 17 volumes launched
November 2022: Additional 19 volumes released
October 2023: Another 31 volumes released
November 2024: All 127 volumes completed

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UAE currency: the story behind the money in your pockets

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.”

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