Thursday 23 November 2017

Dubai real estate market to benefit from World Expo 2020

Thanks to the decision to award Dubai the right to host World Expo 2020, long-term job creation, as well as increased tourism, could benefit the real estate and hospitality sectors now and in the long term, according to a report by the real estate company, Jones Lang LaSalle.

Dubai real estate market to benefit from World Expo 2020

According to the official website Dubai World Central (DWC) is strategic initiative of the Government of Dubai, and a master-planned aerotropolis propelling the emirate's economy into the future

December 1, 2013

25 million visitors are expected to attend the Expo, and Jones Lang LaSalle estimates the hotel supply needed to accommodate that number is 45,000 additional rooms, with some of the demand spilling over in to neighbouring Oman.

However, Alan Robertson, regional chief executive of the company, said care needs to be taken, particularly in the short term, to ensure that boosted sentiment doesn’t lead to an unsustainable situation forming in the real estate sector.

Robertson said: “While the Expo will result in long-term benefits to the Dubai economy and the real-estate market, the short-term impact needs to be managed carefully to avoid the inevitable boost in sentiment translating into excessive price growth or over development”.

Expo 2020 is expected to add 2 per cent to Dubai’s Gross Domestic Product, as well as create 277,000 jobs with the hospitality sector in particular the “major winner” in terms of demand for real estate. Hotel occupancy in Dubai has already risen during the first 10 months of this year, to average 79 per cent, compared with 76 per cent last year.

Craig Plumb, head of research at Jones Lang LaSalle, said that increased demand would ordinarily mean price and rent increases over the next seven years, but owners should not misconstrue a long-term arc and immediately push up prices, as that could lead to a negative situation and prolong talk about the property market being a bubble.

The longer term effects of hosting Expo 2020 would be in the legacy of various infrastructure projects and the report notes that with passenger services launched in October at Dubai World Central, the special economic zone near the airport, winning the bid would be a catalyst for the airport, and the surrounding area’s further growth.

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