Wednesday, Jul 06, 2016

Dubai: Dubai will benefit from the shock of the United Kingdom leaving the European Union as investors seek shelter, the chief executive of the world’s largest planned wholesale city has said.

The June 23 referendum result caught many by surprise, wiping trillion off global markets as investors sought safe-haven assets. Markets have since recovered though jitters remain over the UK’s exit from the EU.

Abdullah Bel Houl, the chief executive of Dubai Wholesale City, believes European investors will seek shelter in Dubai.

“Dubai will prosper from what happened,” he said in an interview at his offices in Dubai Studio City on Thursday.

Bel Houl did not say which sectors he thought would attract capital fleeing European markets but said that the dirham’s peg to the dollar was an advantage. The pound plunged to a 31-year-low after the vote, though has since rebounded, and the euro weakened too.

“It would be in the favour of Dubai,” he said.

Political stability

Regional investors seeking safe-havens traditionally favour property and equities with Dubai having benefited in the past from instability. The emirate saw an influx of foreign capital as private wealth fled Egypt, Syria, Tunisia and other Arab countries after the start of the so-called Arab Spring in early 2011. The UAE’s political stability and Dubai’s status as a major international business hub is a lure for many regional investors.

Launched in March by the Dubai government, Dubai Wholesale City plans to be the world’s largest wholesale hub. An estimated Dh30 billion will be spent over a ten year period building the 550 million square foot City that was once planned to be an industrial city. The plans include attracting European wholesalers.

By Alexander Cornwell Staff Reporter

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