In the past 18 months, many positive indicators have emerged signalling a market wide recovery in the real estate sectors. Increased activity in the first half of 2013 has not only strengthened investor confidence, but also saw rent structures being revised with increased rents. Experts point out that Dubai will continue to see growth in rental rates and property prices if it wins the bid to host the World Expo 2020.
Sandrine Loureiro, Head — Commercial Sales and Leasing, Better Homes, says, “A successful bid will further increase speculative investments in the commercial sector with an exponential growth in hospitality, tourism, trade and finance sectors. We also anticipate a steady increase in rental prices based on supply and demand factors as well as consolidation and relocation of firms already in the market. We also expect a healthy growth in the number of new businesses entering the Dubai market.”
World expos have been a turning point for most host countries. After spending $45 billion (Dh165.2 billion) on hosting the World Expo in 2010, Shanghai not only jumped up the ranks of the world’s metropolises, its real estate, retail and hospitality industry enjoyed a tremendous growth spurt.
The UAE is currently developing the blueprint for Dubai Trade Centre — Jebel Ali, the site for the expo. It will be in the heart of the Dubai World Central development, a highly connected transport and logistics environment that will leverage Dubai’s position as a global trade, business and tourism hub.
Dubai competes with three other candidate cities, São Paulo (Brazil), Izmir (Turkey) and Ekaterinburg (Russia), to win the bid for hosting the World Expo. The winning city will be announced in November, following the vote by 161 member nations of the Bureau International des Expositions.
What will the expo bring?
A successful bid is likely to accelerate the iconic real estate projects in Dubai that are already starting to make a comeback. “We expect that some projects may even be accelerated to coincide with the proposed Dubai World Expo kick-off date,” says Richard Paul, Head of UAE Residential Valuation at Cluttons.
The additional infrastructure that the expo will require will provide long-term improvement of important facilities. It will attract new commercial entities and also add value to current Dubai-based companies. “We foresee expectations from international investors and businesses increase dramatically. However, clarity of information and data concerning real estate needs to improve in order to allow Dubai to compete on an international level,” adds Paul.
Growth in new areas
If the bid is successful it will further trigger major transport infrastructure works around the proposed Jebel Ali site. Perhaps, the most exciting element could be the win acting as a catalyst to give momentum to passenger services on Etihad rail between the emirates and the major cities, says James Lewis, Director, Knight Frank UAE. “Enhanced transport links will open up previously inaccessible locations such as new business, retail and residential destinations. We hope to see real estate development around these locations.”
The growing economic activity in the past one year has already translated into rising levels of employment and demand for new housing projects. A successful bid is projected to bring more than 25 million visitors to Dubai between October 2020 and April 2021. This will lead to a further spurt in overall demand in the residential market.
“The government is focused on supporting long-term value creation in the real estate sector and has announced projects such as the Mohammed Bin Rashid City, which will cater to the needs of Expo 2020, taking Dubai’s ability to meet the needs of its visitors and residents to the next level,” says a spokesperson of Emaar Properties.
Dubai has also established its credentials globally in developing iconic real estate assets in the past few years. “We believe that Dubai has put in place a strong property infrastructure that will support the expo bid. We are in the process of creating new infrastructure that further strengthens the city’s infrastructure through additional retail and hospitality assets, particularly in Downtown Dubai,” adds the spokesperson.
