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For most expat residents, life revolved around Bur Dubai, Deira, Karama, Jumeirah and Shaikh Zayed Road to some extent. During that phase, people couldn’t imagine the immense potential of developments such as Dubai Marina, JBR, JLT (Jumeirah Lake Towers) among other such major developments.
There was no Metro connectivity then and these zones were seen as major disconnected clusters from the central hub — old Dubai, so to speak. However, things changed, the nucleus has shifted and, today, new Dubai has made its mark and is one of the most sought after destinations for investors from all over.
There are several areas in London and many states in the US that have gone for regeneration or redevelopment... but an urban city such as ‘Dubai South’ is being developed from scratch. The efforts required are huge. The key thing is to develop a self-sustainable city embedded with all the formulas to succeed.
Dubai South is a brand new chapter in itself and is being touted as the next growth corridor. Strategically located, this 145-square kilometre city was given a major marketing and branding push recently, which has attracted the attention of not only the local but international investors as well. The nucleus of activities is set to shift once again when this new cluster gets ready.
The development seems to provide an ideal mix for an integrated community with residential and commercial options. Proximity to major airport will further drive values once the community is completed. An arid landscape once, Dubai South is evolving into one of the most prominent destinations in UAE.
The masterplanned city is designed with the capacity to accommodate in excess of 1 million people, who are expected to live and work within its boundaries. Dubai South is also expected to generate 250,000 jobs as it is bound to trigger a wave of economic activity in that area.
As the ‘city’ has been divided into several districts, we feel it will clearly define the profile of each individual cluster. This augurs well for the project as it will cater to a specific audience within each of the defined districts and will help boost sales.
The development will add 2 million square feet of office space spread over 11 buildings. A retail strip, schools and a civic centre will be bundled up into an easily accessible community core. This format of development will surely attract families.
We have observed that many developers have tapped this opportunity early and launched their projects at affordable rates with easy payment schemes.
Damac Properties will deliver the first homes in Dubai South development within the next few months. MAG 5 and MBM Holding have also launched an affordable residential project where prices start at Dh500,000 for a studio while a two-bedroom is being offered at Dh880,000.
The price per square foot works out to be in the range of Dh800–Dh1,000, which is at the same level as developments in secondary locations. Dubai South has recently launched a rent-to-own scheme for buyers at its upcoming ‘The Villages’ project, which is another great opportunity for investors.
The upcoming ‘city’ has all the ingredients to succeed as a solid investment destination. It hosts the now-operational Al Maktoum International Airport, which will become the world’s largest once complete. it will be equipped to handle 220 million passengers and several million tonnes of cargo a year, and will play a crucial role as a major contributor to the emirate’s gross domestic product and as an employment generator.
The development is poised to become a logistics hub for the region, while Dubai South is also home to the World Expo 2020 site.
Route 2020, the 14.5-kilometre extension of the Dubai Metro Red Line, will further boost potential as connectivity challenges will not exist anymore. This route is expected to be linked to Etihad Rail at Al Maktoum International Airport, which will serve as the convergence transit point for Dubai South.
Dubai South provides a compelling investment proposition to investors as it provides an ideal mix of location and a community lifestyle. The upside potential very much hinges on the timely completion of the infrastructure and individual projects, which will improve connectivity to the area. Pricing will also be critical as investor appetite remains subdued under current market conditions.
Source: Robin Teh, Special to Gulf News
The writer is the Country Manager at Chestertons MENA.