The UAE maintained its position as the third-best logistics centre among 50 emerging markets surveyed by the Dubai-listed logistics firm Agility, which plans new investments in the country this year as global trading conditions improve.
“We have definitely seen an uptick in the economy and our preliminary results for 2017 are positive,” Bassel El Dabbagh, the chief executive of Agility Abu Dhabi, said yesterday. “We have continued to have growth and are optimistic about 2018.”
This buoyant outlook is reflected in the ninth annual Agility Emerging Markets Logistics Index.
The UAE was ranked third after China and India in the index, and top in the Middle East and North Africa region, scoring highly in the compatibility and connectedness sub-indexes, which measure market accessibility and ease of doing business.
The country also took the No 1 spot for quality of infrastructure and transport.
“The UAE maintains its high ranking across several indices with its abundance of free trade zones, no corporation tax, the offer of full ownership and unlimited repatriation of profits still setting the benchmark for emerging markets,” said Elias Monem, the chief executive of Agility Middle East and Africa.
“The capital Abu Dhabi has several high-profile infrastructure projects coming online, and we are accommodating that growth through our expanding business.”
Mr El Dabbagh said Agility invested Dh125 million in Abu Dhabi last year, some of which will spill over into this year.
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“The Abu Dhabi investment we initiated in 2017 was across a set of larger projects that are still under development. The 21,000 square metre warehouse in Mussaffah and expansion into Kizad [Khalifa Port Free Trade Zone] are on track, meaning the investment is in full swing and ongoing,” he said.
In 2017, the company expanded its overland transportation fleet by 50 trucks to service the domestic and regional market. In 2018, Agility will be investing an additional Dh10 million to Dh15m to grow its truck fleet by another 30 vehicles as well as ongoing capex investments.
The company plans Dh1 billion of investment into developing Abu Dhabi’s Reem Mall, in which it committed Dh225m in 2015. It is currently in talks with banks to secure additional financing, Mr El Dabbagh said.
Meanwhile, Agility plans to expand some of its existing warehouses across the Arabian Gulf, as well as build new ones.
GCC countries in general outclassed other emerging markets in the 2018 index, with the UAE, Oman and Bahrain occupying the top five spots in ease of doing business, followed by Saudi Arabia in eighth position and Kuwait in 16th.
The GCC also ranked close to the top in infrastructure and transport connections, with Bahrain coming below the UAE, in fifth position, and Oman and Saudi Arabia taking sixth and seventh positions, respectively.
Kuwait was the only Gulf state that did not feature in the top 10 because of its weaker transport and infrastructure networks.
Of all emerging markets, India, China, Vietnam, the UAE and Brazil were considered the top five most popular investment destinations for the next five years, while the most promising sector for investment in Mena was oil and gas, Agility said.
Almost half (45 per cent) of respondents said emerging markets would be “unaffected by Brexit”, and 25.4 per cent said emerging markets would benefit from Brexit as the UK sought to draw up new trade agreements.
Agility, which is traded on the Kuwait and Dubai stock exchanges and has about $4 billion in revenues, does not provide a profit breakdown of its logistics business.
However, group net profit increased 17.4 per cent year-on-year to 17.8m Kuwaiti dinars (Dh217.6m) in the third quarter of 2017, and revenue increased 15 per cent to 358.5m dinars. Full-year 2017 results are due to be announced in the coming weeks.
Explainer: Tanween Design Programme
Non-profit arts studio Tashkeel launched this annual initiative with the intention of supporting budding designers in the UAE. This year, three talents were chosen from hundreds of applicants to be a part of the sixth creative development programme. These are architect Abdulla Al Mulla, interior designer Lana El Samman and graphic designer Yara Habib.
The trio have been guided by experts from the industry over the course of nine months, as they developed their own products that merge their unique styles with traditional elements of Emirati design. This includes laboratory sessions, experimental and collaborative practice, investigation of new business models and evaluation.
It is led by British contemporary design project specialist Helen Voce and mentor Kevin Badni, and offers participants access to experts from across the world, including the likes of UK designer Gareth Neal and multidisciplinary designer and entrepreneur, Sheikh Salem Al Qassimi.
The final pieces are being revealed in a worldwide limited-edition release on the first day of Downtown Designs at Dubai Design Week 2019. Tashkeel will be at stand E31 at the exhibition.
Lisa Ball-Lechgar, deputy director of Tashkeel, said: “The diversity and calibre of the applicants this year … is reflective of the dynamic change that the UAE art and design industry is witnessing, with young creators resolute in making their bold design ideas a reality.”
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
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
The specs
Engine: Dual 180kW and 300kW front and rear motors
Power: 480kW
Torque: 850Nm
Transmission: Single-speed automatic
Price: From Dh359,900 ($98,000)
On sale: Now
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Zayed Sustainability Prize
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
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.”
UAE currency: the story behind the money in your pockets
Crazy Rich Asians
Director: Jon M Chu
Starring: Constance Wu, Henry Golding, Michelle Yeon, Gemma Chan
Four stars
