Picking and choosing the winning locations

Business Bay from Burj Khalifa. The upcoming Dubai Water Canal extension will transform it into a maritime development / Image Credit: Sankha Kar/ Gulf News Archives.Business Bay from Burj Khalifa. The upcoming Dubai Water Canal extension will transform it into a maritime development / Image Credit: Sankha Kar/ Gulf News Archives.

Whether it’s a first-time buyer or a seasoned investor, the astute property buyer will look for areas that have it all — an attractive built environment, solid infrastructure, reliable transport links and a likely return on investment.

Some investors try to identify up and coming locations where they can get in early, at a reasonable price, in the expectation of enjoying potential future gains which prove to be above normal market performance.

Some follow new transport links as property price rises often follow new routes, others identify ‘underpriced’ areas which are adjacent to more expensive districts and considered well-placed for a future price rise. Others look to new developments that offer a quality build with the likelihood of valuation gains after some maturity.

Just over a decade ago, Dubai Marina, The Gardens and Arabian Ranches were considered remote locations, as Dubai was centred around Deira and Bur Dubai. However, intervening years have seen massive infrastructural delivery adding new highways, bridges and intersections as well as a new airport and the Dubai Metro and Tram networks.

Dubai has since been able to expand southward towards Abu Dhabi along the Shaikh Zayed Road (E11) as well eastward, towards Mohammad Bin Zayed Road (E311) and Emirates Road (E611).

These improvements opened up previously outlying lands to create new development zones. Around 28 projects have been launched so far this year — with scheduled completion dates up until Expo 2020.

Certainly, investors in some of the new locations will hope to benefit from lower off-plan prices and attractive payment plans, in the hope values will rise post-completion.

What about already established areas of Dubai? Our research found some locations can take advantage from new infrastructure, retail developments, tourist attractions as well as leisure developments by 2020 and beyond.

Dubai Sports City, Jumeirah Village and International Media and Production Zone (IMPZ) will soon benefit from a major mall opening, the first phase of Al Futtaim’s City Centre Me’aisem.

As the mall opens this year, and with further expansions by 2020, surrounding areas could enjoy improved capital and lease values and stronger rental absorption rates as a result of improved local retail facilities.

Within five years, Discovery Gardens, Al Furjan, Green Community and Jumeirah Golf Estates could benefit from the Metro 2020 expansion plan recently announced by the Road and Transport Authority (RTA). When completed, this could potentially add a price premium for both sales and rentals of buildings within 5-10 minutes walking distance.

Moving towards the coast, we find the well-established Jumeirah Beach Residence is further enhanced by the Tram and The Beach commercial development by Meraas. Work is also underway on the nearby Blue Water — a landmark mixed-use development in the form of a man-made island that will hold the world’s largest observation Ferris wheel.

These improvements could all translate into a potential uplift in capital and rental values, with a possible ripple effect spanning beyond JBR towards Dubai Marina.

Tecom is another area that potentially offers a strong upside due its location on the main E11 artery and the D61 connecter, as well as having Metro links. While opportunities for single unit purchases in Tecom are limited, investors will have noted that the future of this freehold area may be boosted by the arrival of the ‘Mall of World’, on which construction is expected to start soon.

Business Bay is going through a major transformation. The Dubai Water Canal extension, 33 per cent complete, will soon link the existing Business Bay Creek with the sea, transforming the area from a business centric location to a major maritime style development similar to Dubai Marina, encouraging new waterfront retail development.

Once the canal is complete, apartments could be expected to enjoy a boost to their capital values as well as rents, particularly for the more secondary type units that are not within walking distance of Downtown Dubai or don’t already enjoy views of Burj Khalifa. This is in addition to the considerable lift that Business Bay has enjoyed since 2012, as a result of the exceptional market dynamics in adjoining Downtown Dubai.


Source: Declan King, Special to Gulf News

The writer is Director & Group Head — Real Estate, ValuStrat.



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