Infrastructure impact on property values

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It is a well-established fact that scheduled infrastructure projects tend to impact property prices in the nearby area of development. For developers and property owners, modern infrastructure becomes part of an area’s unique selling point (USP).

However, the development of modern infrastructure can have a different impact on different types of properties in different areas across the UAE. Increased access to public transport will definitely add value to low to mid-income property segments and have less of an impact on high-end property prices as their use of and reliance on public transport will be significantly less.

Similarly, some modern infrastructure developments may end up having a negative impact on property values in some areas. New roads, airports and metro stations will add benefit and access and, therefore, value to some properties; however, they will also increase noise, traffic and crowds.

Within the commercial real estate area, such modern infrastructure as airports will tend to result in increased opportunities for employment and logistics. A perfect example of this is the addition of modern infrastructure in anticipation of Expo 2020. The expansion of the Dubai International Airport and the construction of the Al Maktoum International Airport will allow Dubai to capitalize on its unique location as a strategic hub.

The number of business opportunities created by this strategic location and the growth and development of the UAE’s airports and airline networks is almost limitless. New companies are being set up every day and international companies flock to the UAE to establish a branch. Commercial properties are, therefore, seeing an increase in demand which boosts not only prices but also developments and supply. A knock-on effect will also be seen in the residential property segment as this influx of new business opportunities tends to be accompanied by an increase in demand for housing.

Handy Hints
•Modern infrastructure is considered one of a property’s USPs
•It has positive and negative effects depending on property type
•It increases business opportunities for commercial structures

Source: Nicholas Baker, Special to Properties
The writer is a freelancer


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