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UAE: Etihad Rail connecting 11 major cities set to spur property market growth

When fully operational, the railway will be carrying over 60 million tonnes of freight and 36.5 million passengers

The national rail network of the UAE, Etihad Rail, is expected to contribute to the country’s economy and sustainability, with the real estate sector leveraging the most benefits, property analysts said.

The rail network, which will be linking the seven emirates from the Saudi Arabian border to the Oman border, will transform the economic landscape of the country by connecting 11 major cities of the seven emirates. The 1200-kilometer-long project will play a pivotal role in bridging the gap between the seven emirates, making commutation easy for UAE residents, according to Zoom Property Insights.

When fully operational, the railway will be carrying over 60 million tonnes of freight and 36.5 million passengers.

The railway service will allow passengers to travel from Abu Dhabi to Dubai in 50 minutes, and from Abu Dhabi to Fujairah in 100 minutes. No start date for the passenger service has been made public to date.

“Communities and neighbourhoods located close to the Etihad Rail stations will record a price hike. Moreover, there will be an increase in rental value as well. Apart from the boost in the real estate sector, the pioneer project will also bring economic prosperity and sustainability while reducing carbon footprints,” Ata Shobeiry, CEO of Zoom Property said.

“The inter-emirate rail connectivity will be a major boost to economic activity across the UAE. It will contribute to the population migration, GDP growth, and economic development of the country,” Shobeiry said.

The $11 billion railway network, which was started in 2009, is being built in stages. Stage One has been fully operational since January 2016, transporting up to 22,000 tonnes of granulated sulphur each day from Habshan and Shah to Ruwais on behalf of Adnoc.

Etihad Rail recently announced its first passenger train station will be located in Fujairah and will connect 11 regions across the UAE once completed.

There’s no firm completion date for the second stage albeit the project is moving forward rapidly as more than 70 per cent network has been built, according to Zoom Property Insights. The second stage will connect Ghuwaifat and Fujairah.

The UAE Railways program falls under the ‘Projects of the 50’ which is a series of developmental and economic projects that aim to accelerate the UAE’s development, transform it into a comprehensive hub in all sectors and establish its status as an ideal destination for talents and investors.

Shobeiry said while the railway will certainly make commutation a breeze within the UAE, there will be a significant impact on the property markets across the emirates as well.

“It’s hard to give estimates on how much the price will increase once this first-of-its-kind project is ready to serve residents, but given the magnitude of the project, we can safely say the changes in the Dubai property market will be quite significant. For example, when areas such as Dubai Investment Park, Discovery Gardens, and Jumeirah Golf Estates will get connected to this $11 billion project, this will result in an increased demand for properties in these areas and subsequently a rise in price,” Shobeiry said.

The rail will pass through some of the notable communities in Dubai, such as Arabian Ranches 2, Damac Hills, Town Square, Al Furjan, Green Community, Arabella, Mudon, Reem, etc. The impact will not only be limited to these areas, but communities located close to them will also benefit from this mega project, as they will witness an increase in property prices.

According to analysts, the rental market will also benefit from this project. Once operational, it will take 50 minutes to reach Fujairah from Dubai and 100 minutes from Abu Dhabi through Etihad Rail. This ease of commutation will give a boost to the property market in Fujairah.

Currently, many people live in Sharjah and work in Dubai due to the lower living cost. With Etihad Rail’s second phase becoming operational, Fujairah will be another prospect for tenants working in Dubai. This will impact its rental market.

Etihad Rail’s connectivity to GCC countries will also benefit the rising UAE property market. It aligns with the UAE’s economic goals and agenda, such as the UAE 2050 Net Zero Initiative and UAE Centennial 2071 project.

— issacjohn@khaleejtimes.com