It reiterated that pilgrims require a Haj visa and it can be obtained through recognised official channels
"Dubai has arguably already experienced some of the Expo effect. In terms of future impacts on pricing, this will really be down to the supply and demand dynamics in the build-up to the event. However, from an economic perspective, the coming years are likely to see some of the most noticeable differences, with the commencement of major infrastructure and real estate projects," says Matthew Green, head of research and consulting, CBRE Middle East.
In terms of supply, the areas in and around Al Maktoum International Airport such as Dubai South, the main venue of the World Expo, and Al Furjan are already seeing a lot of development activity. This includes a number of residential projects that feature affordable housing options and hotel apartments. The Villages, The Pulse, Emaar South, projects by Danube Properties, Mag Property Development and Azizi Developments are a few among those taking shape.
"With much of the adjacent land currently undeveloped, these areas are regarded as emerging locations and hence more affordable. As more critical mass is created and communities established, we can then expect to see demand levels rise and performances improve. However, in the short term, occupiers considering these locations are typically value-driven," informs CBRE's Green.
Although the Expo is expected to see a spike in Dubai rents and property prices in general, only price-conscious tenants and occupiers are likely to initially move to communities close to the Expo as they will offer good value for money. Locations in close proximity of the Expo site are unlikely to compete directly with established lifestyle locations such as Downtown Dubai or Dubai Marina, which offer world-class entertainment, retail and residential facilities.
Population growth
In terms of demand, population growth is a critical factor that will stimulate demand for real estate. Dubai is expected to host up to 25 million visitors during Expo 2020.
"Expect developers to target delivering projects in 2018-2019 and majority would be looking to deliver their projects by 2019. However, it is likely that some projects would be handed over in the beginning of 2020 since projects often encounter construction delays," advises Atheer Al Owainati, head of real estate, GRMC Advisory Services.
Says CBRE's Green: "For those developers not already building, many will have earmarked 2017 as potentially a key period for getting spades in the ground, assuming a minimum three-year construction period."
The Expo 2020 is expected to have a positive impact on the Dubai market as a whole, with increased investment into the emirate's infrastructure, helping to improve public transportation systems and major road networks. Case in point being the opening of the Al Houdh Interchange near DIP and the proposed extension of the Dubai Metro's Red Line to the Expo site.
Meanwhile, in a cost-sensitive market, developers are being careful with price expectations and not factoring in a premium to account for the Expo effect.
"Sales rates will be ultimately influenced by supply and demand rather than a single event, specifically the available supply of similar unit types within the catchment area or competing locations. With a huge number of new off-plan units currently being launched in Dubai, developers are having to be slightly more cautious in their pricing expectations, with a general drive towards affordability and value in the market at this time," Green concludes.
- deepthi@khaleejtimes.com
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