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GCC’s luxury sector demonstrates resilience amid global economic uncertainty

GCC's luxury sector demonstrates resilience amid global economic uncertainty

June 2016

The region’s luxury sector is continuing to demonstrate resilience in spite of economic challenges, driven by investor recognition of the many opportunities the current market landscape presents, UAE industry experts claim.

Record-low oil prices have had a ripple effect on global economies, however with growing private wealth in the GCC – reaching a cumulative USD 2.2 trillion, according to the most recent statistics by Strategy& (formerly Booz & Company) – the propensity to spend remains buoyant in the region as buyers shift their focus from product to value.

“The market for luxury products is not dissolving, but evolving,” said Erwin Bamps, CEO of Gulf Craft, one of the world’s leading superyacht shipyards.

According to the Luxury Goods Worldwide Market Study by Baine & Company, worldwide luxury spending surpassed AED 4 trillion in 2015, with the Middle East listed among the top 10 big spenders at AED 34 billion.

Similarly, Cluttons’ 2016 Middle East Private Capital Survey indicated that real estate continues to be a preferred investment route for the GCC’s high net-worth individuals.

“Ultra-high net-worth individuals understand that this could be the best time to make an investment because of the prospects presented by current market conditions – lower prices, greater value, and a higher return on investment in the long-term,” said Cesar Latrilla, CEO of luxury property firm Engel & Völkers Dubai.

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