Welcome to the new Wild West.
No, not America, but the GCC in the eyes of Asia.
Wild, not as in there’s no Sherif in town, but rather the tremendous money making opportunities that Asian companies seek to take advantage of.
Thailand is the most recent country to throw its lasso into the GCC arena, but the real posse is much more massive and galloping its way into the region in a hurry.
The GCC is ‘most wanted’.
Thai real estate holding company Singha Estate has just unveiled a plan to enter several markets in the Middle East region within the next 3 to 5 years, the UAE National daily reports.
The firm will be looking to primarily invest in the GCC countries’ tourism and hospitality sectors.
“We see a lot of opportunities for investments in the region, either through asset acquisitions or joint ventures,” said Thiti Thongbenjamas, the chief operating officer at the Maldives-based mixed-used project Crossroads that Singha Estate is jointly building with UAE conglomerate Jalboot Holdings.
“Thailand and the UAE, in particular, have a lot of ties between them, in terms of trade links, direct flights, and other synergies,” he told The National.
These positive prospects are not unfounded. Research Konnection, a market research company in Dubai, stated that Dubai remains one of the leading performing hotel markets in the UAE regarding hotel revenue per available room (REVPAR) as the hotel occupancy rates hover around 75%.
According to Ernst & Young, Dubai hotels maintained the highest MENA occupancy in the first quarter of 2017 at nearly 87%.
The aviation sector seems to mirror these numbers, with Dubai International Airport reporting at the end of June that it expected to accommodate 1.1 million passengers between the days of July 5-8 alone.
Singha will also help local real estate operators and investors, as it is looking for Middle East partners to help it develop projects in the markets in which it already operates. Last week, it signed a deal with UAE-based Jalboot to manage a luxury marina at the Crossroads scheme in the Maldives.
Silk merchants on the high road
China, for one, has several plans for the region. The Middle East holds significant importance for Hong Kong and the Belt and Road Initiative, and the need now arises more than ever before to hold in-depth discussions about how the region can effectively contribute to the Initiative, said Vincent HS Lo, Chairman of the Hong Kong Trade Development Council (HKTDC), the Emirates News Agency (WAM) reports.
The Belt and Road initiative was announced in 2013 by Chinese president Xi Jinping, a sort of new-age restoration of the ancient silk road commerce route. Even Chinese officials have had difficulty specifying what the route exactly entails. Basically, it is a development project that will help connect China to the regions to its west, in Central Asia, the Middle East, and Europe.
According to the Belt and Road Action Plan released in 2015, the initiative will encompass land routes (the “Belt”) and maritime routes (the “Road”) with the goal of improving trade relationships in the region primarily through infrastructure investments.
“We are constantly reviewing the situation in the Middle East here in Hong Kong. We will be sending delegations to the region and definitely UAE will be playing a key role in this regard, as we need to discuss together exactly how,” Lo said to WAM.
Last month, China Daily reported that Alibaba’s logistics arm, Cainiao, had signed a Memorandum of Understanding (MoU) with Emirates Airlines’ freight branch, SkyCargo. This will allow both companies to streamline and improve the delivery of cross-border shipments, giving a boost to the e-commerce market in the region through its Aliexpress service.
South Korea played a significant role in the construction boom that took place starting in the 1970s and 80s, and the Asian nation continues to play a major role in the construction sector in countries like the UAE.
In 2014, the Financial Times reported that the Investment Corporation of Dubai, the emirate’s state holding company, signed an MoU for an alliance with the Export-Import Bank of Korea, the official trade finance agency of South Korea. Trade between the two countries amounted to $10 billion during that year.
Other than infrastructure and development projects, South Korea is increasing its investments in order to attract more tourists from the Middle East, the Diplomat reports. One way of doing so was by adopting UAE’s Halal certification. This introduction will increase the availability of halal food within South Korea and exports of Korean food products to the UAE.
South Korean pop culture is also big in the UAE, as it remains a tad bit more conservative in its appeal and clothing styles than that of Western media.
The land of the rising sun looks west
Saudi Arabia granted licenses to three Japanese companies and signed six MoUs with other entities with the kingdom seeking to open up its industries to foreign investors, the Saudi Arabian General Investment Authority (SAGIA) announced in a statement earlier in the year.
The National reports that bilateral Saudi-Japanese trade exceeded $26.6 billion (100 billion riyals) in 2016, with Saudi exports accounting for around 72% for the volume. Some 96 Japanese enterprises invest in the kingdom with a total capital spending of $14 billion (53bn riyals). Around 96% of investments in the kingdom are in the industrial sector, mainly petrochemicals.