The global logistics firm DHL has invested Dh100 million in a new Dubai facility the size of two-and-a-half football pitches as it banks on rapid growth in the region, fuelled by demand from the rising number of small and medium businesses.
The need for the new 186,000 square foot hub – unveiled at Meydan yesterday – has been driven by growth in the SME sector, the lack of available space at Dubai International Airport and the rebound in business confidence in the country, DHL said.
"We are consolidating three ground operation facilities and two office facilities, freeing up space in the airport which we need badly," said Nour Suliman, the chief executive of DHL Express Middle East and North Africa. "That will see about €11 million [Dh55.03m] invested there. We have seen strong double-digit growth for the past four years, with extremely strong growth in the SME segment. When it comes to the multinationals the growth is not as strong. We are healthy, but the SME sector has jumped massively,"
Situated between Dubai’s two airports, the new head office and logistics centre features a 300-metre long conveyor and sorting belt and offers more than 10 times the space that was previously available. The added capacity will help DHL to compete with Aramex, FedEx and UPS. Recently UPS added Dubai to its handful of global hubs linking the US, Europe, Middle East and Africa.
“This is the fastest-growing region in the world, not just from trans-shipment but pure commercial business on the ground,” said Ken Allen, the chief executive of DHL Global. “Globally our business has grown 8 per cent in Q1. We held back somewhat in 2009-10, with regard to investment, and we are on a bit of a catch-up. Nobody realised the bounce-back in the region would be as strong as it’s been.
“We are gaining from the global business in general: Europe is coming back, the US is strong and that is why we are investing in an airside hub at Egypt’s Cairo airport, which will open in August. In Saudi Arabia we have invested in big facilities in Dahran, Riyadh and Jeddah and we are now sitting in the investment in the UAE.”
Last year Dubai’s economy expanded at the fastest rate in six years, thanks to growth in the retail and manufacturing sectors.
The economy grew to Dh325.7 billion, up from Dh311bn the previous year, data released this week by Dubai Statistics Centre showed. AT Kearney also said this week that retail sales in the UAE grew 5 per cent last year to $66bn.
A landmark law supporting SMEs was passed in the UAE in April, granting Emirati-owned businesses customs duty exemptions and other incentives. Sultan Al Mansouri, the Minister of Economy, said he expects the contribution to GDP by SMEs to increase to 70 per cent by 2020 from 60 per cent currently.
The DHL parent Deutsche Post aims to be the global leader in the parcel delivery business by 2020 thanks to the growth of online retail, expected to double in Europe to around €323bn by 2018 from 2012 levels, according to the market research firm Mintel.
While global air freight dropped 1 per cent last year, Dubai International Airport increased its activity by 3.6 per cent, shifting the fifth largest amount of cargo in the world as the Middle East market continued to power ahead.
Abu Dhabi International Airport cargo volumes soared by 30.3 per cent – the highest increase in the world for the period.
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UAE tour of Zimbabwe
All matches in Bulawayo
Friday, Sept 26 – UAE won by 36 runs
Sunday, Sept 28 – Second ODI
Tuesday, Sept 30 – Third ODI
Thursday, Oct 2 – Fourth ODI
Sunday, Oct 5 – First T20I
Monday, Oct 6 – Second T20I
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.”
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Reading List
Practitioners of mindful eating recommend the following books to get you started:
Savor: Mindful Eating, Mindful Life by Thich Nhat Hanh and Dr Lilian Cheung
How to Eat by Thich Nhat Hanh
The Mindful Diet by Dr Ruth Wolever
Mindful Eating by Dr Jan Bays
How to Raise a Mindful Eaterby Maryann Jacobsen
UAE currency: the story behind the money in your pockets
