Land prices in master communities along Dubai Metro's proposed Route 2020 extension could see an upsurge in the lead-up to Expo 2020 as developers take advantage of accessibility afforded by the network, experts opine.
"Demand for properties at these locations is expected to increase as they are seen as more affordable areas in Dubai in view of their popularity afforded by better accessibility to the metro. It is difficult to assess as to how much this will impact the sale prices and rents, but we can only expect them to go up. And the same can be said of land prices," Dana Salbak, Head of ME Research at Knight Frank, told Zawya Projects.
Already established locations in the emirate are dense, leaving little room for land prices to shift, she added.
"Less developed areas such as Dubai Investment Park will probably see an increase in land prices. The same can be said for locations such as IMPZ and Jumeirah Village where plot values have remained stable and can be expected to record gains in the run-up to the Expo as development pace picks up," she explained.
Historically, areas around key public transit nodes globally are known to outperform those not connected to such nodes. But a project's viability cannot be based solely on this factor, said Andrew Love, Partner - Head of Investment and Commercial Agency, Cavendish Maxwell.
"Whilst infrastructure projects have been a proven catalyst for growth and regeneration, land and real estate prices are still ultimately determined by supply, demand and availability of credit," Love said.
"In line with the general economy, we expect the real estate market to improve with prices gradually increasing as the Expo nears. However, the exact percentage increase for certain areas is difficult to predict with accuracy at the moment," he added.
While land prices along the rail route would be given a 'sentimental boost', developers looking to cash in on accessibility need to be wary of demand, warns Ed Macura, Partner, Cushman & Wakefield Core
"Developers may need to evaluate their product offerings keeping in mind the supply and demand dynamics as about 8,000 to 9,000 new residential units are expected to be delivered until 2019 in adjacent areas such as DIP, Al Furjan and Jumeirah Village," he said.
Love added that while most medium-to-large-sized developers have already secured plots in new 'strategic' areas, they may not choose to plan new projects just yet.
"The largest under-construction supply until 2020 is in these emerging areas, though project completions have been delayed over the past few months. This again is a factor of where developers are choosing to deploy their funds at the moment," he said.
"New projects with a completion horizon ahead of the Expo have already been announced over the past 12 months and developers will focus efforts towards completing these projects on time as the credit situation and other economic factors improve," he added.
On June 29, 2016, Zawya Projects reported that the Expolink Consortium led by the France's Alstom, Spain's Acciona, and Turkey's Gulermack, had been awarded the 10.6 billion dirhams ($2.89 billion) contract to extend the Roads and Transport Authority's (RTA) Route 2020 rail project.
The 15-km route will extend the Red Line of Dubai Metro from Nakheel Harbour and Tower station to the Expo 2020 site, serving enroute districts including the Gardens, Discovery Gardens, Al Furjan, Jumeirah Golf Estate and the Dubai Investment Park.