UAE Country Overview

1
For More Information about information contained
in this presentation please contact Megastar
Realty Group - Commercial/Ameristar
Commercial7800 Preston Road, Ste 132, Plano, TX
75024Direct Line 972-867-1000 or
972-377-3837Fax [phone]email
northtxland_at_yahoo.com
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UAE Country Overview Investment Opportunity

• November 25,2007

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United Arab Emirates Overview
4
Snapshot United Arab Emirates
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Map of the United Arab Emirates

• The UAE borders Qatar to the west, Saudi Arabia
  to the south and Oman to the east
• Dubai is a 1 ½ hour flight to Tehran and a 1 hour
  flight to Baghdad
• Historically, there is a large Persian (Iranian)
  population in the UAE who are now considered
  Arabs of Persian descent
• UAE citizens travel freely throughout the Middle
  East and pass across borders via auto with ease

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History

• The land was initially inhabited by seafaring
  people who converted to Islam in the 7th Century
• later, during the 16th century, a portion of the
  nation came under the direct Influence of the
  Ottoman Empire.
• The area was constantly harassed by pirates
  despite patrolling by both European and Arab
  Navies
• In 1820, the local rulers and Britain signed a
  treaty to combat piracy along the Gulf coast,
  following which the area was known as the Trucial
  Coast.
• The Trucial states came under the official
  protection of the British crown in 1892 and
  Britan virtually colonized these areas and it had
  complete control over these states.
• Oil was discovered in 1950s and was exported for
  the first time in 1962.
• In 1968, Britain announced its decision to end
  the treaty with the seven Trucial Sheikhdoms
  including Bahrain and Qatar, which had been
  together under the British protection

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History (continued)

• The Trucial Sheikhdoms along with Bahrain and
  Qatar attempted to form a union of Arab emirates
  before the expiration of British treaty.
• Since the unification deal was not accepted by
  Bahrain and Qatar, they decided to separate and
  have their own existence.
• Among the seven Trucial Sheikhdoms, six of them
  entered into a union called the United Arab
  Emirates on December 2, 1971.
• Ras al-Khaimah joined the union as the seventh
  emirate in early 1972.

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General Information

• The United Arab Emirates (UAE) is a federation of
  seven states formed in 1971 by the then Trucial
  States after independence from Britain
• Dubai, Abu Dhabi, Ajman, Fujairah, Ras
  al-Khaimah, Sharjah and Umm al-Quwain are the
  seven states or emirates, that collectively form
  the UAE.
• Although the emirates maintain a large degree of
  independence, the UAE is governed by a Supreme
  Council of Rulers made up of the seven emirs, who
  in turn appoint the prime minister and the
  cabinet.
• The Emirates (seven sheikhdoms) are located in
  the southeastern corner of the Arabian Peninsula
  and bordered by Oman and the Gulf of Oman to the
  east, Saudi Arabia to the south and west and by
  the Arabian Gulf to the north

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The Seven Emirates

• Abu Dhabi
• Abu Dhabi is the largest of the seven emirates
  and is the capital of UAE.
• Oil was first discovered in Abu Dhabi in 1958 and
  since then, revenues from oil and gas have
  transformed the emirate into one of the world's
  richest locations.
• Abu Dhabi is currently focused on an economic
  diversification program in an effort to reduce
  its reliance on hydrocarbons, The oil surplus is
  being used to move towards sustainable long-term
  economic growth.
• Sheikh Khalifa bin Zayed Al Nahayan is the
  hereditary ruler of Abu Dhabi and the president
  of UAE. Abu Dhabi has an area of 67,340 km² with
  1.85 million people.
• Dubai
• Dubai has been ruled by the Al Maktoum dynasty
  since 1833. The citys current ruler, Mohammed
  bin Rashid Al Maktoum is also the Prime Minister
  and Vice President of the UAE.
• Revenues from petroleum and natural gas
  contribute less than 3 of Dubai's US 46 billion
  economy (2006). It is an example of
  diversification for the rest of the region.
• A majority of the emirate's revenues are from the
  Jebel Ali free zone authority (JAFZA) and,
  increasingly, from tourism and other service
  businesses.
• Dubai is developing as a hub for service
  industries such as IT and finance.

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The Seven Emirates (continued)

• Sharjah
• Sharjah is the second largest emirate by area,
  and is the only one to have land on both the
  Persian Gulf and the Gulf of Oman.
• Sharjah is ruled by Sheikh Dr Sultan bin Muhammad
  Al-Qasimi, a member of the Supreme Council of the
  UAE and Sheikh of Sharjah.
• The emirate covers 2,600 km² and has a population
  of 636,000 (2003).
• Ajman
• Among the other emirates, Ajman is comparatively
  smaller in area with just 260 square kilometers.
• It is presently ruled by His Highness Sheikh
  Humaid bin Rashid Al Nuaimi.
• Umm al-Quwain
• Umm al-Quwain is located between Sharjah to the
  west and Ras Al Khaimah to the east.
• The emirate had 62000 inhabitants in 2003 and has
  an area of 750 square kilometers.
• Umm al-Quwain is ruled by Sheikh Rashid bin Ahmad
  Al Mu'alla

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The Seven Emirates (continued)

• Ras Al Khaimah
• Ras Al Khaimah is in the northern part of the
  Arabian Peninsula and is the fourth largest of
  the emirates with an area of 1700 km² and has a
  population of 191,753 as of 2007 estimates.
• It is ruled by Sheikh Saqr bin Mohammad
  al-Qassimi and the city has two main sections.
• RAK is known to have large lime stone deposits,
  hence it home to one of the largest ceramics
  producer in region called RAK Ceramics. The
  emirate will have one of the largest single
  location cement plants in the world.
• RAK has also launched RAK Free Zone and Rak
  Airlines as a part of its long term economic
  strategy.
• Fujairah
• Fujairah is the fourth largest emirate in the UAE
  in terms of area. It covers 1150 square
  kilometers or about 1.5 of the whole UAE.
• The emirate is ruled by Shaikh Hamad bin Mohammed
  Al Sharqi, since the death of his father in
• 1974.
• Fujairah's economy is based upon the subsidies
  and federal government grants distributed by the
  government of UAE.

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Government Political System

• The UAE is a federation of seven emirates, each
  with its own ruler. The constitution established
  the positions of president (chief of state) and
  vice president, each serving 5-year terms.
• The Council of Ministers (cabinet) headed by the
  Prime Minister is the executive authority for the
  federation while the Supreme Council, made up of
  the rulers of each emirate, is the top
  policymaking body.
• The basic concept in the UAE Government's
  development as a federal system is that a
  significant percentage of each emirate's revenues
  should be devoted to the UAE central budget,
  although each emirate has controlling rights over
  its oil and other mineral reserves.
• Each of the seven emirates has its own local
  government and follows a general pattern of
  municipalities and departments.
• The relationship between the Federal and Local
  Governments are laid down in the Constitution,
  and allows for a degree of flexibility in the
  distribution of authority.
• Sheikh Khalifa bin Zayed Al Nahyan was elected as
  the President on 3 November 2004, following the
  death of Sheikh Zayed bin Sultan Al Nahyan, who
  held the post from the foundation of the State on
  2 December 1971 until his death on 2 November
  2004.

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Legal System

• Legal System Court Structure
• The United Arab Emirates has a civil law
  jurisdiction, influenced by French, Roman,
  Egyptian and Islamic law.
• The legal system comprises of the three main
  branches civil, criminal and Sharia law.
• Although there is a federal court structure with
  a final court of appeal in Abu Dhabi (the Abu
  Dhabi Supreme Court), Dubai and Ras Al Khaimah
  are not part of the federal judicial system.
• Dubai and Ras Al Khaimah have their own court
  systems, which are not subject to the federal
  Supreme Court.
• However, the hierarchical structure of the courts
  in the country follow the same pattern.
• Court of First Instance
• The court of first instance is the first stage in
  judicial process. The court hears all claims
  ranging from commercial matters to maritime
  disputes. In case of dissatisfaction, the parties
  have the right to appeal to the Civil Court of
  Appeal within 30 days of the date of judgment.
• The Court of Appeal
• The court of appeal is the second stage in the
  judicial process. This court acts as an appeal
  court to the First Instance Court.
• The Court of Cassation
• The Court of Cassation is the third stage in the
  judicial process, which deals with the challenges
  to the judgments of the court of appeal.

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Taxes, Tariffs Regulations
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Economic Indicators
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Economy Oil Sector

• According to the statistics (1998) published by
  the government , the UAE has an estimated oil
  reserve of 98.2 billion barrels, and gas reserves
  of 5.8 billion cubic meters.
• The nominal GDP has grown by 22 CAGR over since
  2002 to AED 598bn as of 2006.
• Growth in 2006 tapered off due to lower YOY
  growth in oil prices.
• High oil prices have led to a current account
  surplus of of AED 129bn, which is 21 of GDP, as
  of 2006 from AED28bn, 9 of GDP in 2003.
• With average oil prices in 2007 almost 20-25
  higher than last years average, the robust growth
  momentum and the high surpluses is likely to
  continue

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Economy Non Oil Sector

• Although crude oil contribution to total exports
  and re-exports has gone up from AED 81 BN in 2003
  to AED 213.37 BN in 006, it is largely due to
  high oil prices.
• In fact the growth of non-oil GDP has also been
  robust at 18 CAGR between 2003 and 2006.
• Non-hydrocarbon exports have registered a 3 year
  CAGR growth of 25 and re-exports have grown by
  25 CAGR, which is an indication of increased
  trading activity and manufacturing activity in
  the SEZs.
• Other activities like real estate and tourism
  have also contributed significantly to the
  non-oil sectors in the country.
• It is estimated that real estate activity in
  Dubai has increased to ED10bn in 2000 to
  AED165bn in mid 2006.
• With committed investments of over AED550bn in
  real estate and tourism in Abu Dhabi, the
  contribution of non-oil GDP will increase further.

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Major Drivers of Economy

• Hydrocarbons still major driver
• Oil With large reserves and an average
  production of 2.4 mnbbl/day, oil will remain the
  key driver for the UAE, like the other Gulf
  states.
• However, substantial grown in major non oil
  economic drivers
• Free zones These are special economic zones,
  which offer world class infrastructure and
  favorable legal systems and tax benefits to
  attract global investors. Although Dubai has had
  tasted the success in this field through Jebel
  Ali Free Zone, we believe it is still the
  beginning.
• Real Estate and Tourism Both Abu Dhabi and Dubai
  are investing heavily into this space, to augment
  the current infrastructure to facilitate a higher
  growth in tourists. In fact large investments are
  plan to make Dubai and Abu Dhabi life style
  destinations.
• Industrial complexes The emirates, especially
  Abu Dhabi and Dubai are to continue with the
  ongoing acquisitions and mergers of industries
  across the globe. The UAE is targeting to produce
  more success stories such as that of Duabl, Dubai
  Ports.

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Free Zones

• The purpose of free zones are to drive the
  development of UAE through providing innovative
  and unlimited possibilities for industrial
  development.
• Free zones offers world -class infrastructure,
  value added services and incentives.
• They have been the backbone of diversification
  efforts in the UAE, especially in Dubai.

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Benefits of Investing in Free Zones

• 100 foreign ownership
• Guaranteed 50-year tax exemption on personal and
  corporate income taxes
• 100 Capital Profit repatriation
• Long term renewable lease
• Transparent laws, regulations and fast track
  clearances
• Promotion centers in Dubai and Abu Dhabi
• Excellent seaport and International airport
  facilities
• Abundant energy supply

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Dubai
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(No Transcript)
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Major Industries

• Dubai Aluminum (DUBAL)
• The Dubai Aluminum Company (DUBAL) was
  established in 1979, since then it has grown to
  be the 7th largest global aluminum producer and
  the 1st in UAE.
• DUBAL is a major supplier of foundry alloy to the
  Far Easts automotive industry, extrusion billet
  for constructions markets while high purity
  aluminum are supplied to electronics and
  aerospace industries.
• DUBAL has clients in 44 countries as more than 92
  percent of the products are exported to global
  markets.
• DUBAL plans to expand its production capacity
  from 861,000 tonnes per annum (2006) to 920,000
  tonnes by the end of 2008.
• Dubai Ports World (DP World)
• DP World was formed in September 2005 with the
  integration of Dubai Ports Authority (DPA), which
  was focused on the UAE ports of Rashid and Jebel
  Ali, and DPI (Dubai Ports International)
• DP World acquired Peninsular and Oriental Steam
  Navigation Company (PO) of the United Kingdom,
  which was then the fourth largest ports operator
  in the world.
• As a group DP world is among the top three port
  operators in the world today.

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Major Industries (continued)

• Emirates Airlines
• Emirates Airline (Emirate) is the national
  carrier of Dubai, UAE. It has nearly 2350 flights
  in a week to 94 cities across 60 countries.
• By 2010, Emirates plans to increase its share of
  flights in and out of Dubai International Airport
  to 70 percent from the present 50 percent.
• Emirates airline aims to build a fleet of 180
  aircraft flying to more than 110 destinations
  that could make it the world's largest
  international carrier by 2015.
• The reported revenue has grown by 29 YOY from
  AED 23.05bn in 2005 to AED 29.83bn in 2006, while
  operating profit grew by 26 YOY to AED 3.33bn in
  2006 from AED 2.65bn in 2005.

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Major Upcoming Projects - Dubai

• Dubai Metro
• The Dubai Metro will be a driverless, fully
  automated metro with an expected cost of
  approximately AED15.5 billion for the first
  phase.
• The projects is to be completed over two stages,
  the first stage is expected to be completed by
  September 2009 and the second by March 2010.
• Dubai Airport Expansion
• The Department of Civil Aviation plans to
  increase the passenger traffic through Dubai
  International Airport to 70 million passenger by
  2016 and 100 million by 2025.
• The World (man made island)
• The World(man made island) will consist of 250 to
  300 smaller private artificial islands divided
  into four categories - private homes, estate
  homes, dream resorts, and community islands.
• The project will cover an area of 9 kilometers in
  length and 6 kilometers in width, surrounded by
  an oval shaped breakwater. These islands will be
  connected by marine transport.

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Financial Markets of the U.A.E.

• The UAE at present has two domestic stock
  exchanges (ADSM and DFM), a commodities exchange
  (DGCX) and an international financial market
  (DIFX).
• The two domestic exchanges are Abu Dhabi
  Securities Market (ADSM) and Dubai Financial
  Market (DFM) and the commodities market is Dubai
  Gold and Commodities Exchange (DGCX).
• Both the domestic exchanges and the commodity
  market are supervised and controlled by an
  independent regulator, the Securities and
  Commodities Authority.
• The Dubai International Financial Exchange
  (DIFX), is located in the Dubai International
  Center (DIFC), a financial free zone. Financial
  activities in the DIFC are governed by an
  independent regulator, the Dubai Financial
  Services Authority (DFSA)
• The DIFX plans to attract investors and
  corporates across the globe, as it maintains an
  international standard at par with the leading
  international exchanges in New York, London and
  Hong Kong.
• DIFX currently lists shares, bonds, Sukuk and
  structured products. The exchange plans to
  introduce other securities such as derivatives
  and exchange-traded funds, many of which do not
  currently exist in the region.

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Dubai Financial Market

• Dubai Financial Market was established on March
  2000 as a public institution having its own
  independent corporate body and was recently
  listed on the exchange
• There are 61 companies (including foreign
  companies) listed as of September 2007 and it
  encourages both local as well as foreign
  investors to invest.
• The listed companies are segregated on the basis
  of their activity into 9 sectors Banks,
  Insurance, Investment, Real estate,
  Transportation, Materials, Consumer Staples,
  Telecommunication and Utilities.
• The DFM was one of the best performing indices
  globally with the market going up by 350 between
  2003-05.
• However, the market was one of the worst
  performing market in 2006 as it lost 44.
• Increasing speculation and overstretched
  valuations were the main reasons for the market
  to collapse.

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Dubai Real Estate Tourism

• The world famous man-made offshore developments
  along Dubais coast, such as The Palms and The
  World will ensure more hotels and resorts for an
  increasing number of tourists .
• Dubais Department of Tourism and Commerce
  Marketing (DTCM) sanctioned a AED 99bn (US27
  billion) project which includes a resort,
  shopping malls and entertainment complexes.
• The project would be spread over 13 million
  square meters in Dubai land and will feature a
  cluster of 31 hotels. It offers more than 29,000
  hotel rooms and will include the worlds largest
  hotel, the 6500-room Asia Asia hotel. I
• It is expected to accommodate more than three
  million tourists by 2016.
• The first phase of the project, which includes
  the Asia Asia Hotel is scheduled to be
  operational by 2010.
• Most of the real estate works are undertaken in
  order to attract more tourists to the country. In
  a way, the ongoing real estate projects are inter
  related to the tourism industry

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Dubai Real Estate

• Dubai growth has been staggering over the past 15
  years and continues unabated as its service
  economy and diversification strategy continues

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Population Drives Demand

• The statistics of 2005 show that the population
  of Dubai as on December 2005 was 1.4 M with an
  impressive annual growth rate of 9.5.
• With these figures the estimated population of
  Dubai by year 2010 would be approximately 2.2 M
  and an additional 200,000 households will be
  needed to cater the increasing demand.

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Demand Supply of Households
Source GRP
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Real Estate Buyer Diversity
Source Gulf Business (December 2006)
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Hospitality Investment Skyrocketing

• With 144 confirmed hotels and over 50,000 hotel
  rooms coming online by 2010, the UAE remains the
  largest single hotel market in the GCC.
• Bullish is the word to describe the state of the
  hotel market throughout the GCC in 2007.
• Any concerns over market saturation and over
  supply are continued to be brushed aside,
  resulting in record breaking number of hotel and
  hotel apartment project being announced.
• Dubai once again has taken the leap surprised the
  world, where the current availability is being
  increased by almost 100 where as the number of
  rooms in these projects are greater than the
  cumulative total of all the other developments of
  the region in the same time period.

Source Gulf Business (Issue 8 December 2006)
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Confirmed Rooms by 2010
Dubais burgeoning hotel market will face its
real test in terms of overall demand in 2008 and
2009 when 56 hotels and over 20,000 hotel rooms
open in the market. With a number of differently
categorized hotel projects coming up in the GCC,
the most lavish and spectacular one would be
offered again by Dubai called Al-Bawadi (A
totally different offering to Las Vegas). It
will constitute hotel developments like
Asia-Asia having more than 6500 rooms and
projects like Holly Bolly Hotel resort, Palaces
Hotel Resort, Pirates Cove Hotel Resort and
America Hotels Resorts with almost 3500 rooms
to offer
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Freehold Market Impact
Source GRP
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Legal Framework to Improve
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Residential Units to Double by 2010
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Market Segmentation
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Changing Buyer Climate

• The role of Dubais various residential property
  investors will evolve. High net-worth
  individuals, real estate agencies and speculators
  were the main investors initiating Dubais
  property boom in 2003.
• The phase of stability that started in 2006 will
  continue and demand will be driven by a different
  set of investors i.e. expatriates buying
  properties either as an investment or to avoid
  paying escalating rents.

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Expectation - Residential Property Market
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Marina Park
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The Palladium - Jumeirah Lake Towers
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Madinat Al Arab Dubai Water Front (Palm Jebel Ali)
The new Downtown and Central Business District of
Dubai in close proximity with Jebel Ali Intl
Airport A 20 storey Residential Plot in Sector
B Ideally located giving a clear sea view and
easily accessible through Dubai Metro, water
front Tram bus service
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Expectation Commercial Property Market
Source GRP
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Major Developments - Commercail
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Dubai Among Most Expensive Cities

• Dubai currently has the eighth most expensive
  commercial unit rent rates among 20 surveyed
  cities, making it a more expensive place to do
  business than well-established business centers.
• As of a November published survey the average
  rent in Dubai was US 87 per Sq. Ft.

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Ras Al kHAimah
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Following Dubai The Opportunity

• Set to become the premier tourist destination in
  UAE, Ras Al Khaimah is arguably the most scenic
  of the emirates being blessed with an untouched
  coastline, mountains and sand-dunes.
• It has also benefited from the foresight of its
  government who ensures that any development in
  this emirate will only serve to enhance the
  attractiveness of its natural beauty and not to
  spoil it with the building of high-density
  tower-blocks which may lead to pollution,
  over-crowding and congestion.
• With a government development office focused on
  life-style and industrial development, Ras Al
  Khaimah achieved an 18 growth in GDP in 2005 and
  this growth is set to continue.
• Supported by an excellent transport
  infrastructure with its own international
  airport and being just a 45 minute journey from
  Dubai City, it is a prime getaway location for
  international holiday-makers and Dubai residents
  looking for a weekend break.
• Property prices in RAK also sit at around one
  third of those in Dubai with the benefit of a
  more spacious, laid-back lifestyle

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General Overview

• Located on the UAE's west coast, Ras Al Khaimah
  is the countrys most northern emirate and
  arguably the most scenic. The Emirate boasts of a
  varied landscape ranging from fertile plains,
  mountains and desert regions.
• In 2004 the Investment Development Office of
  RAK was set up to create and enhance business
  development to the area. They are focused on 2
  core areas Lifestyle and Industrial
  Development.
• They have now attracted a number of real estate,
  leisure, educational and hospitality investments,
  plus its new and growing industries mean it will
  have over 50 of UAE Total Production capacity.
• An indication of the Emirates success is in an
  18 growth in GDP in 2005.
• Property prices are also more favorable in Ras Al
  Khaimah when comparing to Dubai making this
  emirate an attractive investment all-round.

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Tourism Natural Amenities

• With 64km of virtually untouched coastline, Ras
  Al Khaimah is set to become the premier tourist
  destination in the UAE with world-class luxury
  hotels, leisure facilities, marinas, eco resorts
  and Theme Parks.
• However, where there is development, the aim is
  to preserve the cultural heritage and natural
  beauty of the emirate. Any planned developments
  will only enhance the attractiveness of the
  emirate, by only constructing attractive,
  low-rise and spacious resorts.
• The surrounding area will add to the appeal of
  the area with the relaxed easy-going pace of
  coastal resorts, just a short drive will lead
  into the unspoiled Hajjar Mountains, red-hued
  sand dunes or 40km of pristine beaches.
• Alternatively, a 45 minute drive will take you to
  the vibrant city of Dubai or the same distance
  along a scenic coastal road will take you into
  the Musandam peninsula of Oman, renowned for its
  mountains, fjords islands where diving
  dolphin watching are popular pastimes.

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Al Hamra Village
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Investment in Rental Units
Source Royal Frontiers RE
53
Further Investment Options

• Acquire pre-release properties to include
  apartments detached villas retail plazas and
  hospitality
• Further development ongoing to include business
  plazas to support living quarters and industry
• Ras Al Kaimah has three Free Zones with over
  6,000 registered companies
• R.A.K., the government development company has
  expressed interest in joint development, purchase
  or pre-release acquisitions of above properties

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U.A.E Outlook

• Positives
• Strong Macro economic outlook With oil prices
  currently at their historical high of US80/bbl,
  expect the buoyant economic conditions in UAE (
  especially Abu Dhabi) to sustain.
• Proactive governments The governments in each
  emirate have recognized the need to diversify the
  economy and attract businesses to their country,
  in order to de-risk their economies from oil.
• The Dubai government has taken the lead in
  bringing fresh investments into the city by
  freeing up the economy and making the emirate an
  attractive lifestyle destination in the globe.
• Taking cue from Dubai the provisional governments
  of all the emirates are setting up free zones,
  real estate projects, industrial parks in order
  to attract investors and businesses.
• The sovereign funds of Dubai and Abu Dhabi are
  buying strategic stakes in a number of key
  companies globally, which will increase the
  country's influence in other parts of the world,
  which will hold in good stead over the long-term
  for the UAE and its businesses.
• Risks
• Over supply of free zones and real estate
  projects could cause a correction in the property
  market in Dubai, which could have a ripple effect
  through the other Emirates, trying emulate
  Dubais formula for success.
• Over dependency on Abu Dhabi by the smaller
  emirates, could be a potential threat to their
  viability, as Abu Dhabi looks to invest heavily
  in state sponsored projects.
• Key man risks This arises from the fact that
  country affairs are managed by powerful visionary
  leaders and the second chain of command is yet
  untested.

55
For More Information about information contained
in this presentation please contact Megastar
Realty Group - Commercial/Ameristar
Commercial7800 Preston Road, Ste 132, Plano, TX
75024Direct Line 972-867-1000 or
972-377-3837Fax [phone]email
northtxland_at_yahoo.com