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Monday, February 27, 2006

American Interest in the Dubai Marina

...amid acrimony over the Dubai Ports World deal.

Al Fattan Towers & Jumeirah Beach Residences in Dubai Marina. Photo by AltinD, from Forums

The question of American interest in the Dubai Marina seems relevant for a number of reasons. Firstly, the United States, as the world's wealthiest nation in gross terms and among the wealthiest per capita, is exactly the kind of market that the huge development schemes in Dubai depend upon for success. The emirate, with a population of just over a million and only a fraction of that wealthy enough to afford properties starting around US $200,000, needs to attract buyers from abroad to purchase the upto 100,000 units being built in the Dubai Marina and adjacent Jumeirah Lake Towers developments alone. Although there is enough wealth spread out across the globe, being able to successfully tap into the largest and wealthiest market would make the task all the easier.

Page hits and visitors by country to Dubai Marina Communities website. USA 3rd with 75 out of 600 hits or 12.76%. (Click on graphic to enlarge.)

So, it makes sense to try to guage the level of American interest in the local property market. One measure of that could be the level of visitor activity at this and other Dubai Marina related websites. In Internet parlance, page hits (clicks on web links) from the US consistently rank among the top three, together with hits from the UK and the UAE. Part of this can be explained by the fact that the sites in question are in English, and the United States probalby accounts for the largest number (gross) of Internet users for any single country. Removing these factors the US would probably rank no higher than 3 or 4, among non-Arabic speaking countries, with regard to level of interest in Dubai Marina--in terms of online acitivity. Considering the general prominence of the United States on any number of levels, such a ranking is not particularly high.

American Johnny Rockets hamburger joint at Marina Walk.

Other ways to guage the level of interest among Americans may be more anecdotal but nonetheless revealing. Before the current Dubai Ports World controversy, there was little mention of Dubai or the UAE in American media, even while much attention was being paid to the region at large. The average American, prior to the emergence of DP World on newspaper front pages, would probably have never even heard of Dubai, much less consider it a place to buy property. Again, this seems to contrast dramatically with the UK (as highlighted in an earlier post entitled The British Are Coming!) where Dubai is seen entering the ranks of Spain, Greece, Cyprus or Turkey as the optimal place to consider for a second home, retirement or investment opportunity.

As an American myself and resident observer of the local scene over the past 5 years, I would highlight three reasons for the low level of American interest in Dubai (and by extension the Dubai Marina):

  • the great distance between the two geographically.
  • the general perception that the region is dangerous and unstable (post 1970's oil shocks, Iraq wars 1 and 2, 9/11, etc.).
  • the fact that America is large and diverse enough (climatically, geographically and culturally) that there is little need to venture abroad anywhere to buy property.
The first and third factors will more or less remain constant, although faster and more direct flights between the US and the UAE can lesson the geographical gap. The key variable is the second, which if reversed could result in a dramatic increase in American interest. The perception of danger and instability does not at all match the reality of the situation in Dubai, but the effect of that perception is to reduce the likelihood of Dubai coming to mind in America as a potential vacation or real estate destination.

Ask the man on the street in America to choose the statement below which best characterizes the UAE, and see what he chooses.

    The UAE is...

    a)  awash with an ideology of Islamofacism.
    b)  an oasis of tranquility amidst a sea of turbulence.
    c)  neither of the above.
The best answer? Well, neither of the above--c. But if one were to look at Dubai in terms of opposite extremes, b most closely characterizes the situation there today. While not quite tranquil, the UAE is, by comparison to countries in the larger region, politically docile with practically no religious or social unrest to speak of. There are issues of worker exploitation and problems that tend to plague other modern urban communties, like traffic congestion and high housing prices. But none of this would suggest that the UAE is in any sort of turmoil much less gripped by Islamofacism or any other volatile ideology or activism. In reality there is a large measure of polical apathy as the population are either content with things as they are or, being largely expatriate, not willing to risk losing the welcome mat that allows them to live and work here for indefinite periods of time.

Statement a, above, could hardly be further from the truth. Yet these were the exact words of an American pundit discussing the DP World controversy on a recent National Public Radio (U.S.) broadcast. The misfortune for Dubai regarding the DP World controversy is that such negative (and inaccurate) perceptions become reinforced. But there is an upside, one that brings to mind the common saying, "There's no such thing as negative publicity." In large part Dubai was simply an unknown quantity in distant America. DP World has changed this--faster than the Burj Dubai, the man-made Palm islands or any other of Dubai's imaginative new development projects ever could. Some will venture beyond the headlines to discover the jewel in the hat (of the Middle East) that Dubai more closely resembles. It is common to see in the local blogosphere the expat community rally around the cause of DP World--as at UAE Community Blog. It isn't simply a matter of cheering on the local team, but rather a reflection of the awareness gained from living in Dubai and experiencing it is a desireable place to live and invest one's assets in.

  Another take on Jumeirah Beach Residences.

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