How will Expo 2020 Dubai impact the local real estate market and shape future trends?
Since the announcement of Expo 2020, there has been an increase of residential and commercial development at the site. New shopping centres, hotels and over 400 restaurants as well as luxury housing and cycling paths, will be completed prior to the highly anticipated event.
According to a recent Ernst & Young report, titled ‘The economic impact of Expo 2020 Dubai’, the event is estimated to bring in Dhs122bn to the overall UAE economy. While that will largely be made up of the tourism, hospitality and F&B industries, there has been a noticeable uptick in demand for rented apartments as a projected increase of visitors are expected to gather in Dubai. It is the perfect opportunity for landowners and investors who are on the lookout for a strong market for their properties.
Despite the recent challenges posed by the Covid-19 pandemic the ‘UAE & MENA Real Estate Report’, which was produced by Informa Markets in 2021 found that 74 per cent of respondents are anticipating a recovery for the MENA region’s real estate industry within one to two years since 2020. A key proponent of this growth is regional mega-events such as Expo 2020.
Developers need to understand the changing demands of potential investors and organisations especially with Expo 2020 ready to open its doors to potentially hundreds of new businesses. Offering value for money for either larger units or high-end facilities, which will be key to attracting buyers. Commercial real estate developers will need to offer flexible areas for investors to create the perfect space for their business as opposed to pre-structured floorspace.
We are already seeing the implementation of these changes firsthand. Developers are focusing on adding high-end facilities such as gyms to established living spaces. Environmentally friendly buildings are also in the making. In addition, developers have been eager to start constructing new apartments and villas. The interest rates have been lower than usual, just like the property prices and mortgage rates, making them extremely attractive to those looking to buy in the market.
With a surge of new visitors to the emirate for Expo 2020, we expect that there will be a surge of prospective investors in Dubai’s real estate sector. The likelihood of investing in Dubai has become increasingly more attractive due to several proactive government incentives such as the introduction of new visas; special investor and retirement visas, golden long-term visas, and the reduction of the loan-to-value (LTV) for first time homebuyers to 20 per cent initiated by the UAE Central Bank. These initiatives will provide a significant boost to the industry and, in turn, the economy.
Businesses have already begun to review the way they structure and operate in commercial and private spaces. As these changes continue to impact businesses, we will see developers review their traditional approach to design and react accordingly.
In terms of future trends, Expo 2020 has opened a new focus for investors in areas such as Business Bay, Jumeirah Village Circle, Sports City, Barsha South and areas close to the Expo site. While the property occupancy is still low, the expansion of Maktoum airport has anticipated a dramatic increase in tourism to these areas. With upgraded infrastructure including new metro links, additional commercial and residential spaces – the area is rapidly growing. There has been an influx of tourists who have been working from home, from Dubai and this is expected to steadily increase.
Furthermore, with the addition of the Dubai 2040 Urban Master Plan, which will see large-scale changes to the city’s developed areas, Expo 2020’s legacy will continue to have an impact of the emirate’s real estate sector.
The initiative has outlined and divided the city into key areas for continued urban development, focusing on efficiency, sustainability and mobility. With a clearly outlined road map on the future development of these areas, it really is an exciting time for Dubai’s real estate.