Dubai's Aerotropolis big draw for investors

Dubai South, spread over 140 square kilometres, is projected to become the logistic corridor of the Menasa region / Image Credit: Archives,

Superlatives abound. Dubai South, the planned mega-mixed use development and Dubai's next flagship project, is one of the largest and most expensive urban developments ever undertaken and will complement what is to become the world's largest airport in the near future, Al Maktoum International Airport.

Thus it came as no surprise that the $6.8 billion (Dh24.9 billion) cluster Dubai South, around the airport, has been highlighted as one of the world's biggest real estate hotspots in the coming years in Knight Frank's Global Cities 2016 report.

The project has been nicknamed ''Aerotropolis'' due to its sheer size and its focus on aviation-connected businesses.

While Al Maktoum International Airport is designed to become the world's largest airport at completion in around ten years, Dubai South will span over 140 square kilometres, an area almost twice the size of the island of Hong Kong, and is estimated to be the future home of up to one million people. Combined with the airport, this is expected to draw additional businesses and tourists not just to Dubai and the UAE, but to the wider Middle East as a central transportation and logistics hub for the Middle East, North Africa and South Asia, or Menasa.

This market comprises a quarter of the world's population, had a combined GDP of about $5.4 trillion in 2014 and is expected to exceed $8 trillion in 2019 and $12 trillion by 2023, according to consultancy Frost & Sullivan. The entire Menasa region is forecast to reach average growth rates of over 5 per cent per annum up to 2019, compared to an average global increase of 3.83 per cent, 2.8 per cent in the US and 1.8 per cent in Europe. And Dubai South wants to be this region's ''logistic corridor.''

''The development potential of this rapid urbanization is huge, offering considerable opportunities to firms and investors that operate globally,'' said John Snow, Knight Frank's Head of Commercial Property.

Although full completion of the huge development is still some way off, some new office buildings in Dubai South are already functional and ready for occupation, and tenants such as Emirates SkyCargo, Nestlé and CEVA Logistics have already moved in.

Dubai South is at the core of the UAE's rapidly growing role as an international aviation logistics hub. Logistics and aviation districts will surround the airport as specialised free zones focusing mainly on logistics, cargo and aviation industries. Additionally, the project encompasses a number of commercial and residential real estate developments.

Al Maktoum International Airport, in turn, will be developed into the world's biggest airport at costs of $32 billion and with an annual capacity of up to 220 million passengers. Al Maktoum Airport will also have the capability to handle hundreds of Airbus A380-sized aircraft at any point through five runways and four terminal buildings, according to Khalifa Al Zaffin, Executive Chairman of the Dubai Aviation City Corporation (DACC), who spoke on the project at a press conference last year.

Surrounding Dubai South has been divided into six districts: Residential District, Commercial District, Logistics District, Aviation City, Dubai Exhibition City and Golf District.

One central part of Dubai South will be a residential city, starting with ''The Villages'', which offers a wide range of housing options in an integrated community environment, including two- to three-bedroom apartments, loft apartments, townhouses and villas. The development will also include an interconnected network of parks, open spaces and plazas, wellness center, schools, healthcare centers, religious facilities, post offices, police stations and public libraries.

The development will also be connected to Dubai's existing metro rail network and to future Etihad Rail routes. Its first phase will see the launch of 6,000 apartments to be delivered in 2019. At completion, there will be a total of 20,000 apartments across the development. Sales are scheduled to start early next year when development begins, said Dubai South's Vice President of Real Estate Mohammed Al Awadhi.

The Commercial District will consist of around 850 towers with up to 45 floors, along with 25 hotels and other amenities spread over 14 square kilometers and designed to become a workplace for an estimated 225,000 people.

The district will be set up in several phases and comprise an ''urban village'' with mid-to-high end low density homes, a lake district as a community hub focused on retail, leisure and offices based around a lake, a seven kilometer-long plaza on the water edge, a business district for finance and banking, a luxury residential area, a creative commercial district as a hub for media, fashion and other creative industries, as well as a two-kilometer long park for leisure activities together with two transit stations as a central gateway to the rest of Dubai.

The other two main business hubs will be Logistics City and Aviation City. The former is designed to become a free zone for modern warehouses and distribution centers and will have a connection to Jebel Ali Port and Jebel Ali Free Zone, as well as provide additional features such as light manufacturing and assembly. Aviation City is being built on 6.7 square kilometers, which will make it the world's largest maintenance, repair and overhaul (MRO) center in the world. The district will also be home to all of Dubai South's aviation related operations, including manufacturing and associated industries. There will also be an executive jet terminal.

Another part of Dubai South is a recreational zone, Golf City, spread over an area of around 20 square kilometers. It will upon completion boast 18-hole golf courses, retail, residential and office buildings for around 160,000 people.

''We expect Dubai South to be home to around one million people and there will be 500,000 job opportunities developed here alone driven by the Dubai Plan 2021 vision,'' Al Awadhi said.

In fact, the project is the first that will be accessible not only by air and road, but through its connection to Jebel Ali Port – the largest container port between Rotterdam and Singapore – by sea and by Etihad Rail, which eventually will connect the emirates with neighbouring countries. The existing red line of the Dubai Metro will be expanded from Jebel Ali to Al Maktoum International Airport. Moreover, the road network leading to Dubai South is currently being improved in order to cope with an anticipated rise in traffic ahead of and during the World Expo 2020 that will be hosted at Dubai South.

''The [Dubai South] free zone is in a strong position to appeal to firms looking for international reach,'' the Knight Frank report concludes, adding that ''a four hour plane ride from Dubai allows access to a third of the world's population, and an eight hour flight to two thirds.

Get a glimpse on the big shift to affordability

Source: Arno Maierbrugger, Special to Property WeeklyPW


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