5 reasons why Expo 2020 is benefitting Dubai real estate
Historically, hosting the World Expo has brought pride and prestige to its host city and has paved the way for strong economic growth. For the UAE, it holds even greater significance, as Dubai becomes the first city to host such a large-scale international event in the Middle East.
With the Expo just a few years away, Dubai’s industries are gearing up to benefit from the mega-event. The hospitality sector, retail, transportation, banking, and real estate are all expected to enjoy substantial growth as a result. Furthermore, 2017 is predicted to be the year where Expo 2020 preparations are to gain full momentum.1 So, with the major event just around the corner, let’s have a look at all the benefits associated with hosting the event within in the real estate sector.
Expo 2020 will boost infrastructure and construction
Dubai can expect sharp growth in the lead-up to Expo 2020. The positive effects are already becoming apparent, as major real estate projects and infrastructure developments accelerate towards completion. A few examples include projects such as the Dubai Water Canal, numerous theme parks and the Museum of the Future.2
Earlier this year, Expo 2020 Dubai revealed plans to award 47 construction contracts in 2017 worth AED 11 billion in preparation for the event. This is in addition to the 1,200 contracts that were awarded in 2016, worth around AED 2 billion to the economy.3
Dubai is attracting foreign investments
With real estate development spearheading economic growth among other industries, the UAE is likely to attract more foreign direct investment by 2020.
Already, Dubai is a coveted market for foreign investors thanks to its excellent reputation as a thriving global business, tourism and retail hub, with the UAE as a whole being the largest investment-attracting country in the MENA region, according to a United Nations trade body.2 The UAE will remain a favourite destination for FDI because it enjoys stability, security and regulatory framework to protect capital and create an environment that is conducive for investment.
Given the surge in real estate investment opportunities thanks to Expo 2020, the city’s appeal is only set to increase in the eyes of international investors.
Increased tourism will lead to expansion of the hospitality sector
Dubai is expecting around 25 million visitors by Expo 2020, of which around 70% will be from overseas.3 The six-month-long event will provide a big boost for the city’s hospitality sector to cash in huge revenues.
According to a report by STR, a market research firm, the UAE is leading the expansion of the hospitality sector in the region. There are around 99 hotels under construction, which is the highest number in the Middle East and Africa region, and with Expo 2020 around the corner, supply is expected to increase.2
Creation of new jobs to boost demand for residential projects
It goes without saying that the development of Dubai in the run up to Expo 2020 will create ample job opportunities as it’s the third largest global event. Standard Chartered’s report states that around 300,000 direct new jobs will enter the market due to the Expo 2020.1 Therefore, an increasing workforce and rise in jobs will subsequently lead to a greater demand for housing. To support the population and demand, a range of affordable and luxury properties are underway to cater to the diverse demands.
It doesn’t end there – the legacy
Over 80% of the 4.38-square-kilometre Expo 2020 site will be reused or repurposed after the event with a focus on four ‘high priority’ industries (namely: education, transport and logistics, travel and tourism, and real estate) as part of a wide-ranging legacy plan.4 This includes infrastructure, and cutting edge technologies, as well as roads and public transport systems put in place to host the Expo; whilst the conference and exhibition centre will become a major events venue for the city. There will also be residential communities and a vast retail element.
Cities have flourished under the Expo in the past, and with Expo 2020 drawing closer, the city’s economy is set to swell in all aspects and industries.
Sources: 1: Khaleej Times; 2: Gulf News; 3: Expo2020dubai.ae; 4: ArabianBusiness.com