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If any doubt remained whether the UAE real estate market has put its global recession woes behind it, they were well and truly dismissed at last week’s International Property Show (IPS). The three-day event, which has grown in stature over the years to become one of the most important regional real estate meeting platforms for developers, investors and international companies, positively hummed with good vibrations.
Exhibitors came from all over Europe, Asia Pacific and Africa, and included representatives from different industry segments. Held at the Dubai International Convention and Exhibition Centre, the IPS is a show-and-tell exercise for countries keen to promote their newest, most ambitious property developments, while looking to attract top-level investors.
Countries such as the US and up-and-coming Namibia were keen to make an impression with bright colours and a party atmosphere at their stands. But it was the UAE's visionary and futuristic glass-encased displays that appeared to be attracting the most interest. A raft of new major projects were being showcased, leading rather tantalisingly to the main regional industry event - Cityscape Global 2014, which takes place in Dubai in September.
And a certain logo, which featured prominently on every wall and most stands at the exhibition, gave a new impetus to the proceedings - that of the World Expo 2020. Indeed, the show was as much about the emirate's successful bid to host the Expo as it was about the real estate industry, although the two are clearly going to be inextricably linked in the next few years.
"It is the first edition after Dubai won the bid to host Expo 2020,'' said Dawood Al Shezawi, CEO of Strategic Marketing and Exhibitions, organiser of the IPS. "There is growing interest from real estate developers from all over the world in the local market, especially Dubai, which is witnessing dynamic growth in the construction and infrastructure sectors.
"The UAE real estate market is attracting international companies and service providers that are keen to expand their presence in the region."
A good example of a new area attracting investor interest is Jumeirah Village, which is located between New Dubai and the so-called Future Dubai - a district that straddles the site of the Dubai World Central. The new Plaza Residences in Jumeirah Village was featured in a vast model and it is clear that this pristine neighbourhood is targeting well-to-do businesses with a need for access to both Dubai and Abu Dhabi and a global flight hub.
Currently in Phase A, which covers 13 residential communities of 1,050 villas adjacent to a Greg Norman-designed golf course. Jumeirah Golf Estates was also pulling in the crowds due to a dominating stand and its emphasis on glamour and sporting prestige.
Away from the glitz, there was also a very strong focus on green developments and low-impact construction planning. Even the top brass from the Dubai Electricity and Water Authority were out in force to flaunt the utility service provider's massive new solar power facility near Jebel Ali. Dubai is boldly aiming to be named the world's most sustainable city by 2020, which underlines the importance of these projects.
This goal is exemplified by the ambitious Sustainable Village, a 120-acre green city launched by Diamond Developer to accommodate around 10,000 residents. It is slated for completion in 2016. Planned features of the project include a biogas production plant, wind tunnels, community gardens and water recycling facilities. CEO Faris Saeed said the company will unveil specific plans in May.
"Each house will produce its own electricity by using solar panels," he says, adding that the project will have a sustainable transportation system for residents and their visitors to go around the city.
Apparently, horses are among the transportation options being considered.
It seems you really can't put a price on optimism and positive thinking, and there is no doubt the Expo 2020 has caused a surge in adrenaline in the country's property market. Pauline Leale, Managing Director of Sloane's Real Estate, believes the Expo is a boost to both new and existing projects.
"The Expo 2020 is great for Dubai. It will bring in a lot of industries and jobs, which will in turn help the market,.. she tells Property Weekly. "Also, areas near the Expo site will be developed and projects under construction will get finished, which will enhance the appeal of the emirate.”
Aside from new luxury developments, she says mid-range real estate is creating a lot of interest. "Hotel apartments and small villas are drawing a lot of investment. It is still possible to get between 5 per cent and 7 per cent return on investment per year and that is attracting money from other markets where the rates have dropped to 2-3 per cent per year," she explains.
It is quite tough to find a dissenting voice when it comes to the real estate outlook of Dubai and the UAE as a whole, on the back of the World Expo 2020 success. Money talks and, right now, it's positively bellowing. Just last week, it was confirmed that Dubai property deals surged by a 38 per cent to top Dh61 billion in the first quarter.
Dubai property deals
The Dubai Land Department revealed that the number of transactions for the quarter reached 15,694, an 11 per cent increase on the first quarter last year. Analysts say these results reflect renewed investor confidence in Dubai's real estate sector and the positive momentum created by the release of details of the preparations for the World Expo 2020.
Middle East real estate giant Asteco also reported last week that sales prices for homes in Dubai rose significantly over the past quarter, with apartment prices going up by 3 per cent and villa prices rising by 6 per cent, compared to the last three months of last year.
If there is a concern over the effect of the Expo, it will come from tenants worried about massive rental hikes. Inflation in Dubai is running at the highest level since 2009, and in Abu Dhabi residential rents have grown by around 10 per cent in the past quarter, according to a new report by CBRE.
However, increased government regulation over landlords ramping up rents to unreasonable levels is now kicking in, which should help allay the fears of the UAE real estate market's understandably nervy tenants.
On a roll
But there is no stopping the Expo train and with massive investment and a determined will to make the UAE home to the greatest show on earth in 2020, residents can expect some seriously impressive new developments to rise around the country over the next couple of years. In case you were wondering,
The total development cost for the World Expo is estimated at around $8.9 billion (Dh32.7 billion).
Here are a few of the UAE's most dazzling new developments that are sure to wow the international crowd when World Expo 2020 arrives
Mohammad Bin Rashid City: MBR City is a massive mixed-use development that is going to break quite a few records. The complex, billed as a city within a city, will include the largest family leisure and entertainment complex in the Middle East and North Africa, featuring more than 100 new hotels, the Mall of the World, planned to be the largest shopping mall in the world, the largest area for art galleries in the region and the biggest swimming pool in the world at 40 acres.
Sobha City: India's Sobha Group is now on board to develop the multibillion-dollar Meydan Sobha City next to the glamorous Meydan Godolphin Parks on AI Khail Road. The development will comprise 280 villas, 13 high-rises, an entertainment and retail complex and schools - all spread across 743,000 sq m. It is the largest project to be launched in Dubai in the past four years.
Aladdin City: As Dubai Creek bids to become a Unesco World Heritage Site, a new project is being built nearby that personifies Dubai's creative flair. Aladdin City is inspired by the ancient tales of Sinbad the Sailor and Aladdin and will include commercial offices and hotels in three towers spread over 4S0m. The fantasy-like project is located along the traditional commercial vessels port at Dubai Creek in AI Rigga, out of the old area of Dubai.
Saadiyat: This breathtaking, huge. low-lying island just 500m off the coast of the capital is currently under development, but is already making great strides. A mixed commercial, residential and leisure project, it is slated for completion bang on the World Expo 2020. Expected to become Abu Dhabi's cultural centre, the stunning location will feature Zayed National Museum, Guggenheim Abu Dhabi and the Louvre Abu Dhabi.
Yas Island: This leisure and entertainment destination just outside Abu Dhabi is pretty much complete and has just added a fantastic water park, Yas Waterworld, to its offering. With a great location easily reached from both Dubai and Abu Dhabi, and the fact that it is home to the world-class Yas Marina Circuit and the Ferrari World Abu Dhabi, it will be a natural draw for visitors in 2020.
Sharjah: A range of impressive new projects is set to transform Dubai’s neighbour in time for the World Expo 2020. This includes the Dhl40-million AI Majaz Island project and amphitheatre, which will feature conference rooms, galleries, shops and green areas. Plus the stunning Sharjah Islamic University (AI Qasimia University) and Sharjah Quranic Gardens.
Ras AI Khalmah: The emirate has been quietly ramping up its hospitality offerings and has now launched some truly fabulous hotels. A prime example is the gorgeous Waldorf Astoria Ras AI Khaimah. Located just 50 minutes from Dubai International Airport. the hotel can easily match its peers in Dubai in the glamour stakes due to some stylish fine dining restaurants, a huge luxury spa, an 18-hole championship golf course and a 350m private beach.
The World Expo was first organized in London in 1851, making it one of the oldest international exhibitions.
• The six-month event takes place every five years.
• Before the UAE's tum in 2020, Italy will have hosting honours next year.
• More than an exhibition, the World Expo carries a great deal of prestige for the host country
Source: Kirsty Savage, Special to Property Weekly