Dubai's Population Boom: Salik, Parkin, DEWA, Du, And Dubai Taxi In Focus : Comments From Century Financial


(MENAFN- Mid-East Info) Dubai's population is 3.8 million. The city's population growth is being evidently and tangibly felt by residents. Of late, the number of cars on the road has increased, malls are more crowded, and traffic delays have become the talk of the town. Population growth in Dubai is expected to land around the figure of 3% from 2023's 3.7 million. The average population growth rate stands to be approximately 2.97% since 2020. Moreover, when talking about Dubai, we must consider tourists. In the first six months of 2024 alone, Dubai welcomed 9.31 million visitors. The city hosted visitors 2.45 times its resident population. In 2023, Dubai opened up to 17.15 million tourists. The city has many things going for itself. It offers a life of luxury and ease, no income taxation, a good geographic location at the crossroads of the world, backed by strong government support, excellent safety, growing corporate opportunities and a rising global influence or soft power. Due to these very powerful reasons, Dubai is expected to reach 5.8 million in population by 2040. The rise in population spells potential opportunity for a few key players listed on the Dubai Financial Market. For example, Salik could see more cars passing through its gates. Parkin may fulfil the city's need for vertical parking infrastructure. More heads mean more homes & these homes would need water, electricity and connectivity. A win for utility stocks. And finally, the city's taxis would gear up to service the mix of residents and tourists. It's important to note that Salik, DEWA, Du, and Parkin operate as monopolies. While Dubai Taxi is not a monopoly, it currently holds the majority of the market share.

The Toll Collector: Salik:
Salik is positioned well to benefit from the rising population and, with it, the increasing number of cars in the city. Dubai's layout almost makes owning a car a necessity. The numbers back this up: in 2023, the population was 3.7 million, while registered vehicles slightly exceeded that at 4 million-an average of 1.08 cars per person. While this ratio isn't literal, it highlights the steady rise in vehicles as the city grows. In 2022, the population stood at 3.6 million and cars at 3.7 million, and in 2021, both figures were 3.5 million. As Dubai expands, the number of cars on its roads will only continue to grow. Up till 2023, Salik had eight toll gates running. From November this year, that number has gone up to 10. Moreover, the company has now introduced dynamic pricing, increasing the tolling fees during peak hours. With a projected 2040 population of 5.8 million, we can estimate around 1,008 total revenue-generating trips, potentially bringing higher revenue from the ten toll gates alone.

The Space Keeper: Parkin
As Dubai's population grows, so do its traffic and parking woes, creating a demand for efficient parking solutions. With a 49-year concession agreement and over 207,000 parking spaces, Parkin dominates the city's on-street and off-street parking market. Despite a public parking utilization rate of only 26%, the company posted AED 103.7 million in revenue for Q3 2024. More importantly, the 26% number highlights significant room for increased profitability as more people and cars hit the city's roads, driving the utilization rate higher. Finally, in densely packed areas like Bur Dubai, JLT & Business Bay, the need for vertical parking is the need of the hour, and developing infrastructure to meet this need could drive the utilization rate and revenue higher in the years ahead.

The Essentials: DEWA & Du:
From 2018 to 2023, DEWA has seen steady and strong growth, with electricity accounts up 6.8% on average and water accounts rising by 6.94% on average. Naturally, as Dubai's population grows, so does the demand for essential services like water and electricity. Moreover, with new developments like Dubai South and a wave of off-plan projects, DEWA's customer base will only rise. In addition, Du, a key player in Dubai's telecommunications sector, has experienced an average growth of 8.62% in its mobile customer base over the past two years. With DEWA holding a monopoly in the city and Du capitalizing on the growing demand for mobile services, both companies are well-positioned to benefit from this population-related macro-uptrend.

On the Move: Dubai Taxi:
Dubai Taxi Company, the city's largest taxi operator, has a 46% market share, serving a mix of residents and tourists alike. In the first nine months of 2024, DTC facilitated 35.5 million trips. As Dubai expands, developments in new areas will likely contribute to higher trip volumes and longer average journeys. Dubai's population is forecasted to grow by 3% in 2024, ensuring steady transportation demand. Additionally, Dubai welcomed 9.31 million international visitors in H1 2024, marking a 9% YoY increase and further straining the mobility network. By 2025, annual tourist arrivals are expected to exceed 25 million, significantly boosting demand for taxi services. To address this, DTC expanded its fleet by 19% YoY to 8,793 vehicles as of September 2024. Moreover, as disposable incomes rise, the company is ready to capture the increasing demand through its premium taxi and limousine services.

In conclusion, Dubai's population boom presents substantial growth opportunities for key players in the city's infrastructure, utility and services sectors. As the population expands, so does the demand for essential services like electricity, water, telecommunications, transportation, and parking. Salik, Parkin, DEWA, Du, and Dubai Taxi are all strategically positioned to capitalise on this macro-uptrend, with their monopolistic or dominant market positions enabling them to ride the wave of growth.

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