New downtown emerging in Dubai: Areas in demand around Expo 2020
80% of the Expo-built environment is planned to be retained for District 2020.
As Dubai works on building different downtown neighborhoods as part of its urban planning, a new centre is emerging fast on the horizon of Dubai’s property market, attracting a large number of end-users and investors due to its economical proposition for tenants and better return for investors.
Industry analysts say that areas around Expo 2020 and Al Maktoum Airport such as Dubai South, Meydan City, Mudon and Town Square etc will be the next big downtown area, as they are already seeing a faster inflow of residents. Since massive developments are taking place in terms of infrastructure and mobility, it is expected that property prices in those areas are likely to go up faster and offer a better return in the years to come, compared to areas which are already developed such as JBR, Dubai Marina, and Downtown Dubai.
As part of Expo 2020, the Roads and Transport Authority is expanding the Dubai Metro, which will connect the Expo 2020 areas with the rest of its Red and Green Lines network, making mobility even easier for the residents there. In addition, the other key reason for attraction is that these projects are backed by top-rated developers such as Emaar, Meydan and Dubai Properties.
The development of Al Maktoum International Airport and Dubai’s plan to transform the Expo 2020 site into a tourist destination post-event will continue to attract a large number of visitors and residents to that area in post-Expo 2020 period.
Analysts and market players noted that residential properties near Expo 2020 site are garnering strong interest from end-users and investors due to strong rental returns, proximity to exhibition’s site, and more affordable rates.
According to Bayut, the studio apartments for sale in Dubai South average at Dh385,000, while 3-bedroom villas are at Dh1 million. In Meydan City, prices are predictably higher with 3-bedroom villas going for an average of Dh3.3 million and studios averaging at Dh450,000. However, the premium amenities of the neighbourhood, which includes a golf course, equestrian centre and mall easily justify the higher price tag, Bayut said.
“We can be optimistic about the growth of areas near Expo 2020 such as Dubai South, Meydan City, Town Square and Mudon in the next few years. They are well-integrated neighbourhoods which already offer a high return on investment to investors. This could improve further when more handovers are completed and tenants have a wider portfolio of properties to choose from,” said Haider Ali Khan, CEO of Bayut.
In the Legacy period of May 2021 to December 2031, the Expo site will be redeveloped to District 2020, which is expected to include tenant companies and an expanded Dubai Exhibition Centre (DEC). Over 80 per cent of the Expo-built environment is planned to be retained for District 2020, and eventually expand into a city covering more than four million square metres.
According to EY forecast, the legacy era will see Expo 2020 contributing Dh62.2 billion with main contributions coming from event orgsanisation and business services at Dh54.2 billion, retail at Dh2.5 billion and restaurants and hotels at Dh2 billion. While around 548,300 full-time equivalent jobs will be created during May 2021 to December 2031 years, which will come to around 53,800 full-time equivalent jobs.
Fadi Nwilati, CEO, Kaizen Asset Management Services, said affordable housing is a definite trend that is prevalent in all of the Expo 2020 surrounding communities.
“Tenants also have good negotiation power in these areas, since handovers will only increase in the latter part of 2019. We have seen the success of Sustainable City in the past, and now Dubai South wants to position itself as a smart and sustainable city, allowing this area to attract a specific investor/tenant class who don’t mind paying that higher price tag,” said Nwilati.
He said that the core fundamentals for end-users and investors will be location, developer reputation, finance options, and payment plans.
“Expo 2020 has only increased the market sentiment for these emerging districts. Areas like Meydan, Dubai South, Mudon and Town Square have created a lot of investor/tenant interest over the past 12 months. These projects have been built by world-class developers like Emaar, Sobha, Meydan and Dubai Properties, and this only adds to the credibility of these projects,” Nwilati added.
He pointed out that these communities also come with an extensive list of amenities which includes equestrian centres, golf courses, malls, and schools ensuring that they can charge that higher price tag. “These well-integrated communities have created a surge of interest in the past year, and this will only increase in the coming months.”
Lewis Allsopp, CEO of Allsopp & Allsopp, believes that investors are showing more and more interest in the Dubai South development and rightly so because the price points are exceedingly attractive as a 3-bedroom townhouse in Urbana can be purchased for as little as Dh1 million.
“With the location so close to the Expo 2020 site, residents will benefit immensely from the infrastructure including metro and tram lines with easy access to top spots of the city,” he said.
“Investors who are not looking for immediate return but are willing to invest for the future could see a great return on investment in the next five years. I believe Dubai South will be one of Dubai’s most popular areas with it being so close to what will be one of the world’s busiest airports – Dubai World Central and with the Expo 2020 site becoming a lively business hub,” he added.
Lewis Allsopp disclosed that sales in Green Community have increased 10 per cent and it can be attributed to its proximity to Expo 2020, which is witnessing very fast development in terms of infrastructure.
“Tenants and end user buyers are anticipating taking advantage of the infrastructure that will come with the Expo. Green Community will become more accessible from other areas of the city due to the extended tram lines,” he noted.
“Regarding tenants and end users, we are seeing an increase in the interest levels, although they are still relatively low. The reason for this is that tenants and end user buyers like to see, touch and feel a property before they show interest. Once handover begins, which should be over the next few months we expect to see the interest ramp up as viewings can take place,” he concluded.
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