Bridging Continents: Inbound Investment from the UAE to Australia

Singapore Inbound Investments Report
  • Report
  • 10 minute read
  • February 01, 2025

The United Arab Emirates (UAE) has emerged as Australia's foremost trade and investment partner in the Middle East. This economic relationship is set to be further strengthened by the signing of the Australia-UAE Comprehensive Economic Partnership Agreement (CEPA) in 2024, which will enhance opportunities in key sectors such as agriculture, technology, and renewable energy. Australia’s robust economic partnership with the UAE is further reinforced by UAE investments in the Australian economy over the past decade, particularly in sectors such as industrial, retail and consumer, and energy utilities and resources (EUR). These investments underscore the natural economic complementarities and the trusted relationships at both government and business levels that have developed over the years. 

 

This report delves into the diverse nature of UAE investments, highlighting their positive impact on various sectors of the Australian economy and their crucial role in fostering growth and innovation.

UAE's Outbound Investment by Destination

UAE’s overseas direct investment (2012 – 2023)

Overseas direct investment by country

  • As of early 2024, the UAE has invested an estimated US$2.5 trillion globally, with the United States as the leading destination. 
    • The United States alone has attracted US$65 billion in bonds and US$50 billion in direct investments from the UAE. Following the U.S., Egypt has received US$65 billion, while the UK and India each secured US$40 billion, and Morocco US$30 billion. Despite global economic fluctuations, the UAE’s international investments continue to perform well.​
  • Around 72% of the UAE’s overseas investments originate from sovereign wealth funds, with government-owned and quasi-governmental companies contributing another 18%. Family-owned and private businesses account for 7.5%, while UAE banks provide the remaining 2.5%, reflecting a primarily state-driven but diversified investment strategy.​
  • The UAE's Foreign Direct Investment (FDI) outflow has grown steadily over the past decade, rising from US$2.5 billion in 2012 to a peak of US$24.8 billion in 2022. Despite occasional declines, such as in 2016 (US$15.7 billion) and a slight drop in 2023 (US$22.3 billion), the overall trend shows consistent growth in overseas investment.​
  • The UAE is expanding its global reach, currently invested in 90 countries with a particular focus on emerging markets like India, Indonesia, ASEAN countries, Egypt, Morocco, and Central Asia, as well as developed economies such as the UK, France, Germany, the US, and Canada. Gulf sovereign wealth funds primarily allocate investments to the US, while China holds a comparatively minor portion of their portfolios.​

UAE’s Inbound Investment in Australia

Key Highlights

  • Investment Value: UAE’s investment in Australia has fluctuated, peaking in 2015 (A$13,144.7 million), 2018 (A$9,400 million), and 2021 (A$11,173.2 million), primarily due to Tawreed Investments Ltd and partners acquiring major infrastructure assets like TransGrid and WestConnex. However, values declined to A$7-4 million in 2023-2024. The overall trend indicates substantial UAE involvement in high-value Australian infrastructure acquisitions.​

  • Number of Deals: The deal volume for UAE investments in Australia has also shown fluctuations, with a peak in 2015 at 7 deals, followed by a generally steady range of 2-5 deals per year from 2016 to 2024. The most active years were 2015, 2021, and 2022, each seeing higher deal counts, while other years maintained moderate activity, averaging around 3 deals annually.​
  • Investment Rank: The UAE stands as Australia’s leading trade and investment partner in the Middle East, with investments reaching about A$12.7 billion in 2023. The Abu Dhabi Investment Authority (ADIA) has invested in key infrastructure such as ports, TransGrid’s electricity network, and Queensland Motorway. Other UAE sovereign wealth funds are also actively assessing further investment opportunities in Australia.
  • Key Sectors: The Industrials sector leads with a 34.1% share of the overall M&A deals, followed by Consumer at 26.8%, indicating a strong focus on essential and consumer-driven industries. Other sectors, including EUR (14.6%), Real Estate (7.3%), Financial (7.3%), TMT (7.3%), and Health (2.4%), hold smaller shares, highlighting a diverse yet concentrated investment pattern favoring industrial and consumer sectors.

M&A Activity: 2014 – 2024

M&A deals split by Industry (2014-2024)

UAE inbound snapshot 

41

Closed deals (2014-24)

27th

Foreign investment ranking (2023)

34.1%

Investment in Industrials

10th

FIRB approval ranking (2023)

Major Deals by Sectors

Industrial

Industrials sector completed deals

There were 14 inbound investments from UAE in the Industrial sector in the last decade. Some of the most significant transactions have been included below.

Vega Industries

CWL Capita

Vega Industries (Middle East)

Transurban Group

Sterling and Wilson Solar Ltd

Unique Group

DP World Limited

Transurban Group

Dar Al-Handasah Consultants

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Retail & Consumer

Retail & Consumer sector completed deals

In the Retail & Consumer sector in Australia, there were 11 M&A deals with investment from UAE in the past decade. Some of the most significant transactions have been included below.

Ghassan Aboud Group

Dale Ventures

Ghassan Aboud Group

Dnata

Enayat Ghias

GA Group

Action Hotels

Emami International

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Energy, Utilities & Resources

EUR sector completed deals

In the Energy, Utilities and Resources sector in Australia, there were 6 M&A deals with investment from UAE in the past decade. Some of the most significant transactions have been included below.

Dubai Investment Fund

Dubai 2020 Limited

Masdar and Tribe Infrastructure Group

A consortium comprising

Exchange Minerals

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Healthcare

Healthcare sector completed deals

In the Healthcare sector in Australia, there was only 1 M&A deal with investment from UAE in the past decade, which have been included below.​

Strata Manufacturing PJSC

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Financials

Financials sector completed deals

In the Financial sector in Australia, there were 3 M&A deals with investments from UAE in the past decade, which have been included below.​

Insurance House PJSC

Mirae Asset Financial Group

Abu Dhabi Capital Management LLC

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Tech, Media & Telecom

TMT sector completed deals

In the TMT sector in Australia, there were 3 M&A deals with investments from UAE in the past decade, which have been included below.

AiDevLab, LLC

Dale Ventures FZE

Tawreed Investments Ltd

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Real Estate

Real Estate sector completed deals

In the Real Estate sector in Australia, there were 3 inbound investments from UAE in multiple subsectors in the past decade.

International Real Estate Partnership Holdings

Abu Dhabi Investment Authority

Abu Dhabi Investment Authority (ADIA)

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Key Investment Sectors

Industrials Sector​

  • Over the past decade, the UAE's investment in Australia's industrial sector has seen significant spikes in specific years, notably in 2018 (A$9,260 million) and 2021 (A$11,100 million), while other years experienced only limited deal activity. This pattern indicates a focus on strategic, large-scale investments rather than consistent annual activity, with a total of A$20,604.3 million across 13 deals.​
  • A consortium including Tawreed Investments acquired Sydney Motorway Corporation in 2021 to access Sydney's key toll road network, securing long-term revenue and strengthening their footprint in Australia’s infrastructure sector. ​

  • UAE entities, primarily led by its Sovereign Wealth Funds, have focused on sectors such as transport and utilities, in aligning with the UAE's strategy to expand into stable, high-demand markets like Australia's infrastructure sector.​

Retail & Consumer Sector​

  •  UAE M&A activity in Australia’s Retail & Consumer sector has been inconsistent, totaling 11 deals from 2014 to 2023 with a combined value of A$218 million. The years 2016 and 2022 had the highest number of deals, with a notable increase in deal value in 2022 (A$102.5 million).​
  • There is a recent trend toward larger investments, especially in 2021 and 2022, indicating a growing emphasis on high-value deals in Australia’s Retail & Consumer sector.​

  • Notable investments include partnerships and acquisitions of well-known Australian brands, as well as the establishment of new ventures aimed at capturing market share in Australia's robust and affluent consumer market. ​

M&A activity in Industrials (2014 – 2024)

M&A activity in Retail & Consumer (2014 – 2024)​

Key Enablers and Linkages

Trade Relations

The UAE ranks as Australia's top trade and investment partner in the Middle East, with a trade value of A$9.9 billion for goods and services in 2023, positioning it as Australia’s 21st largest global trading partner. Australian exports to the UAE, totalling A$5.2 billion, primarily include alumina, meat, and oilseeds. Imports from the UAE to Australia, valued at A$4.7 billion, mainly consist of petroleum products and urea.​

Australia-UAE Comprehensive Economic Partnership Agreement (CEPA)

The Australia-UAE Comprehensive Economic Partnership Agreement (CEPA) eliminates tariffs on 99% of Australian exports, enhancing opportunities in key sectors like agriculture, technology, and renewable energy. It also positions the UAE as a central hub for Australian businesses in the Middle East, streamlining regulations and boosting trade and investment between the two nations.

Australia-Gulf Cooperation Council

Australia and the GCC (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE) share a robust economic relationship, with goods trade hitting A$11.0 billion in 2023. This partnership spans goods, services, and investments, with growing opportunities in infrastructure, education, and renewables. Energy collaboration, particularly in hydrogen and renewable projects, combines Australia’s resources with the GCC's investment focus to advance sustainable energy goals.​

Council for Australian-Arab Relations (CAAR) Grant Program

This was established to enhance bilateral relations through increased public awareness, partnership development, and engagement capacity between Australia and Korea. The Australia Foundation offers annual grants ranging from A$10,000-A$50,000 to support projects advancing Australia's engagement with Korea across various fields including business, education, arts/culture.​

Potential Headwinds and Tailwinds

Tailwinds

The five Investment Cooperation MOUs under the CEPA package will enhance UAE investments in Australia across key sectors like Green Energy, AI, and Agriculture. The MOU on Food and Agriculture will drive investment by promoting sustainability, improving supply chains, and fostering innovation in Australia's agriculture sector. This collaboration aims to strengthen Australia's capabilities, boost climate-smart technologies, and support bilateral economic growth.

The recently concluded Australia-United Arab Emirates Comprehensive Economic Partnership Agreement sets a robust foundation for enhancing mutual investment between the two countries. It prioritizes sectors essential to Australia's energy transition, including critical minerals, which play a vital role in sustainable energy initiatives. Additionally, the agreement offers benefits to the Australian mining sector, with reduced tariffs on key exports like alumina—valued at A$1 billion in 2023 and integral to various industries. Overall, this trade agreement marks a significant step toward a deeper and more beneficial economic partnership between the two countries.

The Australian Government highlighted significant investment opportunities from increased ties with the UAE, leveraging their substantial Sovereign Wealth Funds. This capital influx aligns with Australia's renewable energy goals. The new trade agreement is set to open new markets for Australian exporters, farmers, and businesses, potentially increasing exports by A$678 million annually. Beyond financial gains, it promises better jobs, more business opportunities, increased investment, higher domestic production, and lower household costs.

Headwinds

Despite a strong trade relationship supported by initiatives like CEPA, UAE investors face significant competition in the Australian market from established global partners, including the United States, UK, Belgium, and Japan. In 2023, the UAE was ranked 27th among Australia's investment partners, with investments totaling approximately A$12.7 billion. By contrast, Malaysia, ranked 20th, contributed A$25 billion. This competitive environment poses challenges for UAE investors seeking opportunities in key sectors such as mining, finance, and real estate.​

Australia plans to tighten scrutiny on foreign investments in critical sectors due to growing national security threats. This aligns with global trends as other countries also enhance their oversight of sensitive areas. Increased risks from international security changes and technological advances include potential control over critical infrastructure, espionage, and sabotage. Additional scrutiny targets supply chain resilience, sensitive data, technology protection, and ownership concentration. As a result, UAE investments, like all foreign investments in Australia, will face stricter regulations and greater scrutiny.

The UAE investors face challenges in Australia due to limited local partnerships, which are vital for navigating the market, regulatory landscape, and cultural differences. Without established networks, some investors may struggle with regulatory compliance, building credibility, and accessing strategic resources like distribution channels and customer bases. This lack of connections can slow down entry and expansion efforts, increase costs, and create potential resistance from local stakeholders.​

Emerging Opportunities, Trends and Consideration

Digital Trade​

  • Digital trade presents a major opportunity for UAE investments in Australia by streamlining cross-border transactions. New rules simplify trade with electronic documents, eliminate customs duties on digital transactions, and support standardized practices for e-signatures, e-invoicing, and e-payments.​
  • This framework enables smooth cross-border data flow while addressing public policy needs. It fosters collaboration on cybersecurity, emerging technologies, and technical support, providing a solid foundation for UAE businesses to invest and operate digitally in Australia.​

Sustainable Agriculture​

  • Australia's endorsement of the Emirates Declaration on Sustainable Agriculture at COP28 aligns with its goals for low-emission farming and inclusivity. This partnership signals promising areas for UAE investment in Australia, particularly in advanced agricultural technologies, resource-efficient practices, and climate-resilient projects.​

  • Investment in these sectors supports mutual food security and sustainable growth, positioning Australia as an attractive partner for UAE’s strategic investments in agricultural innovation and climate adaptation.​

Green and Renewable Energy​

  • The UAE-Australia MOU on Green and Renewable Energy, signed alongside the CEPA, aims to enhance collaboration on clean energy, focusing on solar, wind, and green hydrogen. By leveraging Australia's renewable resources and the UAE's financial and infrastructure strengths, the partnership seeks to drive sustainable projects, reduce emissions, and meet climate targets.​

  • This agreement strengthens bilateral ties and supports both countries' ambitions to lead in renewable energy, fostering innovation and expanding green energy capacity in Australia.​

Critical Minerals​

  • The UAE’s A$2.5 trillion Sovereign Wealth Fund is set to boost Australia’s critical minerals sector under a new trade agreement. This initiative aligns with the UAE’s aim to diversify away from oil while supporting Australia's green energy transition. ​
  • The deal includes tariff reductions and frameworks to encourage the UAE investments in key minerals like lithium and cobalt, essential for renewable energy and tech. This is expected to increase Australia’s export revenue by A$678 million annually, and the agreement also complements Australia's sustainable manufacturing goals.​

Memorandum of Understanding (MOU)

UAE and Australia have entered into several MOUs in recent years to enhance their bilateral relationships​

2024 - MoU on Investment Cooperation in Food and Agriculture​

The Australia-UAE CEPA includes a MoU to boost investment in sustainable agriculture and food exports. The deal eliminates tariffs on over 99% of Australian exports, including key agricultural products, with tariff savings estimated at A$50 million annually. It will also drive investment in sustainable agriculture and value-added food production. ​​

2023 - AACCI signs MOU with Dubai Chambers​

Dubai Chambers and the Australia Arab Chamber of Commerce and Industry (AACCI) signed an MOU to boost economic cooperation, trade, and investment between Arab and African countries. The partnership will leverage Dubai’s role as a global trade hub, promoting business exchanges, joint ventures, and improved market access across both regions.​

2021 - AusUAEBC Signs MOU with AusBG and ABCD​

The Australia-UAE Business Council (AusUAEBC) signed an MOU with the Australia Business Group (AusBG) and Australian Business Chamber Dubai (ABCD) to strengthen trade, economic cooperation and investment opportunities between Australia and the UAE.​

2021 - AUSTRAC-UAE FIU MOU Cooperation Agreement​

The MOU between Australian Transaction Reports and Analysis Centre (AUSTRAC) and the UAE’s Financial Intelligence Unit (FIU) aims to strengthen collaboration to combat financial crime and improve international information sharing on money laundering and terrorism financing.​

2019 - TEQSA and CAA MOU​

The MoU between the UAE's Commission for Academic Accreditation (CAA) and Australia's TEQSA focuses on enhancing collaboration in higher education quality assurance, including mutual recognition of accreditation, capacity building, and policy development. It aims to exchange best practices and expertise to improve standards in both countries.​

2019 - AUS - UAE Space Agencies Sign Partnership MOU​

The MOU between the Australian Space Agency and the UAE Space Agency aims to foster scientific cooperation, technology exchange, and joint research initiatives in space exploration and development.​

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