Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum, has unveiled plans to construct a US$8.16bn ‘Wholesale City’, which observers say is likely to bring in a flood of new expatriate workers over the next 10 years.
As currently planned, the new development will be located close to Al Maktoum International Airport and is “set to span over 550m sq ft, with an expected development cost of AED30bn over 10 years”, according to a report on the ArabianBusiness.com website, which cited as its source the WAM news agency.
The development is planned as a means of boosting the UAE’s share of the global wholesale trade sector, “which is valued at $4.3trn and expected to grow to $4.9trn in the next five years”, ArabianBusiness.com added.
The announcement of the new project comes days after the United Arab Emirates government and the five other members of the Gulf Cooperation Council revealed that they planned to introduce a 5% value-added tax in 2018, in response to concerns that these oil-revenue-dependent countries, which have shunned the idea of taxing their citizens in the past, were likely to face continued hardship as oil prices remained low.
In comments to the press on Tuesday, Sheikh Mohammed said the development was part of the UAE’s “strategic plan” to diversify its economy away from its “dependence on oil”.
On his Twitter account – where he is a prolific commentator, mainly in Arabic – Sheikh Mohammed added: “The City will be the capital of international wholesale, tying together four continents with the largest gathering of global wholesalers”.
He also posted several photographs of himself with images of the planned development (see above).
Robert Parker, chief executive of Holborn Assets, an expat-focussed wealth management firm founded 16 years ago in Dubai, said the impact on Dubai of the new development wouldn’t be immediate, but would likely achieve Sheikh Mohammed’s aims eventually.
“Of all the projects that have emerged from Dubai’s planning board – some downright crazy and shelved, and others downright crazy and now built – the Wholesale City Project makes perfect commercial sense,” he said.
“And it will eventually be a resounding success, though probably not for another decade, [as this is] when Emirates Airline are planning their move to Maktoum International. In the meantime airlines prefer the current airport [Dubai International] for its hub and spoke capabilities.”
‘Specialised parks, exhibition facility’
According to ArabianBusiness.com, the new trade complex will be developed by Dubai Holding, a Dubai government-owned company, and will consist of “specialised integrated trading parks that meet all the requirements of wholesale traders under one roof, as well as an international trade exhibition facility”. More than 15,000 wholesale traders are expected to take space in the facility.
A “Country Pavilions” complex, to include the offerings of various countries from around the world, is also planned.