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Dominic James

Is the Gulf the safe-haven everyone thinks it is?

Everyone saw it as such but I think that changed when Lehmans went bust [in mid September] and since then we’ve started to see the impact of the downturn.

Which Gulf states are most at risk?

I think the Gulf states will weather the storm but the Dubai bubble has burst in the past two or three weeks. A real estate crash is happening. If you drive past apartments in Dubai at night you will see the lights are off because no one is living there.

Is it worth bothering with Dubai?

I think if you are new company looking at Dubai, I would avoid it for now. It is no secret that Dubai construction and real estate is a bubble and confidence is thin on the ground. Projects are either being stalled or cancelled. Dubai is based on real estate, shopping and tourism. I think people will stop going there in the numbers that they have been previously.

So nothing is going on in Dubai, then?

Infrastructure projects like transport, water and power will be completed because they need to happen. There will be new infrastructure programmes as well.

Is the rest of the Gulf as fragile as Dubai?

No single market or sector is immune from what’s happening. Abu Dhabi is a good market because it has most of the oil. It is built on more solid foundations because of a more conservative policy by its rulers. They don’t want to be a sun and sand tourist destination and they’re not building real estate and malls and are therefore less at risk.

Where else is relatively ok?

Qatar is a huge market because it has a lot of gas there Oman is fine and as a strong workload. It’s quite conservative compared to Dubai and has a bit of catching up to do. Saudi Arabia is a sleeping giant.

What’s the long-term future?

These markets will come back. If you took away the financial crisis, the Dubai real estate market was always a bubble because it’s unsustainable to have prices going up 60% every year. These markets still have great potential for UK companies and will be god medium-term bets. I hope what’s happening is a much-needed correction, not a crash.