per cent. Another high-profile draw is the US rapprochement with Cuba. After more than five decades of hostility and trade embargoes, the Obama administration has presided over a thawing in relations with the communist nation. While it is still unclear what this will mean, the economic benefits are bound to be “significant” for Miami, according to Richard Jordan, the senior vice president of global markets at US property brokers Douglas Elliman. The Knight Frank-Douglas Elliman 2016 global wealth report placed Miami 12th in its list of the most important cities to ultra high net worth individuals, just behind top-ranked London, New York and Singapore. “It is too early to talk about in great detail as it has just happened but there is a large Cuban base in Miami and lifting the embargo allows for travel between both countries and potential trade and business alignments between Cuba and those in South Florida. There is going to be a significant opportunity around that for both markets,” says Jordan. GCC businesses are already riding the wave. The Dubai government-owned property developer Nakheel invested $375 million in the Fontainebleau Hotel in Miami Beach in 2008 before later selling its stake. With Dubai ranking fifth on the wealth report list, Jordan says there is a fundamental similarity between the two business hubs. “Both have a similar climate and provide a great quality of life. Additionally, both are gateway cites. Miami is the gateway between the US and Latin America while Dubai is the gateway between Europe and Asia.” But with so much of Miami’s economy tied up in property, are there any potential risks? As the world witnessed in 2008, the property market has the potential to cripple economies with global repercussions.
Jordan says Miami is safely diverse, citing developing medical care and technology industries, tourism and the Miami port extension of the Panama Canal. Art Basel founded its US fair in 2002 and the city’s cultural side is growing. “Miami in years back was heavily dependent on the property market but it has continued to push itself as a global destination and diversify its business platforms. Markets will fluctuate but it has a sustainable economy behind it and an infrastructure in place.” Zalewski has a slightly different perspective on the risks inherent in Miami on account of the city’s relative youth. “The city of Miami was created in 1896. When you put that into perspective, this a city in its infancy. Because of that there is tremendous potential but there is also tremendous risk. The infrastructure we currently have is so new, so fresh and is basically not equipped to handle what’s coming with globalisation and then you have the issue of rising sea levels and what impact that will have on Miami.” Zalewski also points to the possibility Cuba might actually act as a rival to Miami in terms of enticing investors and developers. Proposed US legislation to identify big-ticket investors could also drive people away from Miami while the increased focus on rising sea levels as a result of climate change might be a deterrent. “These are three big factors that could potentially keep people on the sidelines,” he says. However, on balance he does not believe such threats will be potent enough to stop investors from flocking to Miami and reaping the benefits—at least not in the short term. “Miami has the potential to emerge as one of the top potential destinations like Hong Kong or London, where a lot of business can get done between continents. That ultimately is the carrot.”
"Miami has the potential to emerge as one of the top potential destinations like Hong Kong or London"
Traditionally Miami has relied on property but in recent years its economy has become safely diverse with medical, technology industries and tourism all propping it up
2016 MAY / JUNE