The Bureau of International Expositions (BIE) met last month to assess the validity and readiness of the five city bids for the 2020 World Expo. Due to a lack of government support, Thailand's Ayutthaya was withdrawn, leaving Yekaterinburg (Russia), Izmir (Turkey), Sao Paolo (Brazil), and Dubai (UAE) to woo the 166 BIE representatives before the final closed session vote in late November. Qatar for sale | Apartments for sale
With the launch of many new mega projects and the government's collaborative efforts to carry the 2020 Expo to the Middle East for the first time, Dubai's chances seem to have changed significantly over the last six months. The Dubai Metro's $1.4 billion (AED5 billion) Red Line extension to Al Maktoum International Airport in Jebel Ali and the Expo 2020 site is expected to be completed quickly, demonstrating the authorities' commitment to the bid.
Dubai's list of world's largest, tallest, and most audacious superlatives has given the emirate a global reputation; however, a strong bid will help to cement Dubai's re-emergence on the global stage, following the debilitating effects of the "great recession." Even now, financing for the newly launched mega projects is difficult; the Sovereign Wealth Centre in London recently indicated that, due to Dubai's boom-bust cycle, sovereign funds (SWFs) will avoid the emirate. In order to compensate for the reluctance of banks and SWFs to extend credit to Dubai's new real estate ventures, it is clear that Dubai Inc will have to rely on alternate outlets, such as bond markets, to a greater extent in the future. To some extent, the effectiveness of this will be determined by the global appetite for risk.
The declaration by British Foreign Secretary William Hague in May in Westminster of Britain's official support for Dubai's bid follows London Mayor Boris Johnson's recent visit to the UAE, where he, too, endorsed the emirate's bid. Cluttons expects a surge in cross-border investment activity from the United Kingdom, which is Dubai's second largest FDI source, with the United Kingdom's support. With France's announcement in June that it will endorse Dubai's bid for Expo 2020, the bid appears to be gaining traction.
A successful bid would likely see the acceleration and rejuvenation of many more of Dubai's iconic real estate ventures, which are already making a gradual comeback. Some may also be accelerated to coincide with the planned October 2020 start date for the Dubai World Expo, according to Cluttons.
Government-backed schemes that play into the hands of Dubai's main pillars of strength—trade, tourism, and hospitality—are boosting overall levels of investor trust. Increased economic development is translating into higher levels of job activity, and as a result, housing demand is increasing, as shown by capital value growth rates. House prices have risen between 14.6 percent and 20.2 percent in the six months leading up to the end of Q1, indicating that Dubai is very likely to end 2013 as one of the world's highest performing residential markets.
Dubai already has a world-class transportation system and a reputation for hosting international events, putting it ahead of the competition. Cluttons is optimistic that, with the UAE government's full support, authorities will pull out all the stops to make the 2020 Expo an exciting global extravaganza that will help highlight what has been accomplished in the run-up to the UAE's Golden Jubilee in 2021.