Overseas Exposure? Think Dubai.

Dubai is currently undergoing a property and construction boom driven by a fast growing tourism industry; a strong economy underpinned by oil and gas revenues; and favourable government policy.

In 2002, the Dubai property market opened up to allow foreigners to purchase freehold properties. This was a significant development for Dubai's property market and consequently the city has boomed in construction and real estate. The primary driver of the legislation reform is to build a tourism industry to offset an expected reduction in oil revenues in the medium term. Market commentary suggests that Dubai will see US$200bn in projects by 2020.

Currently, the main drivers of Dubai's property market include:
1. Strong population growth (approx. 5% pa);
2. Oil and gas revenues;
3. Favourable government policy, infrastructure spending; tax free jurisdictions; freehold land for expatriates; increasing investment to diversify away from oil revenues;
4. A growing tourism industry - Visitors expected to reach 15m by 2010 (double today); and
5. Sound economy. Dubai is seen as a safe haven. Economy in the region (Gulf) is primarily sensitive to two main factors including the price of crude oil and political stability. Oil accounts for approx. 85% of the region's GDP.

Challenges. We expect key challenges and risks to include travel shocks; terrorism (although expect Dubai to be a key beneficiary of any instability in the region given its "safe haven" image); labour shortages; and increasing input costs.

The question is... What's the best way to profit from the growth in Dubai? Below are a number of companies who are set to benefit from this growth.

CDD Cardno  - Provides professional services associated with the planning, design and delivery of physical and social infrastructure. Sewerage privatisation and marina development in Jabel Ali, Dubai.

MFS Ltd  - Funds management, leisure.

SDG Sunland Group - Dubai pipeline is valued at around A$2.7bn and includes: Palazzo Versace Dubai (A$840m) and D1 (A$500m)

MPY MFS Living and Leisure Group - Currently building the world's largest aquarium in a shopping mall in Dubai.

OAK Oaks Hotels & Resorts 2.06 Hold -  Agreement with Maysan Real Estate Investment Company to lease the hotel section of a 41 storey property (Liwa Heights) located in the Jumeirah Lake Towers Development, Dubai.

If you would like to know more about these companies and how they would benefit your portfolio contact your adviser on 07 4771 4577.