With the theme of “Connecting Minds, Creating the Future” Dubai has finally won the bid to host World EXPO 2020 on 27th November 2013. Dubai has been voted by the majority of the members of Paris based Bureau International des Exhibition (BIE), having many competitors like Sao Paulo, Brazil, Izmir, Turkey, Yekaterinburg and Russia. The mega event is due to start in October 2020 and continue till April 2021. EXPO 2020 is being sponsored by Emirates leading agencies like Dubai Airports, Emirates airline, Emirates NBD, etisalat, DP World and Jumeirah Group. With total budget of $7 Billion dollars, the Emirate is going to build the brand new expo site which is well equipped with ultra modern infrastructure and transportation facilities. With total area of 4.4 kilometers, the exhibition site is set to be constructed at Jebel Ali in close proximity with Al-Maktoum International Airport.
It is the first time in history that an international fair is going to be held in the region of MENA. And after winning the bid for mega event, Dubai has become the first city of this region, which has been selected to host any international fair/exhibition. Significant escalation is expected in business, trade, and the real estate sector that will boost up Emirate’s economy. This mega event is supposed to attract 25 million visitors across the globe with 70% of non-UAE visitors. In addition to economical benefits and growth in the tourism sector, this event is expected to create 277,000 jobs in UAE.
Having considered the victory of World EXPO 2020 the two premier real estate consultancies, CBRE (US consultancy) and Jones Lang LaSalle (international real estate consultancy) have predicted the new face of the Dubai real estate sector. After in-depth analysis of current market trends, they revealed some facts to guide investors, buyers, and landlords. Despite winning the bid of the world event, Dubai real estate has already shown good progress. Significant rises in property price and rent have already been observed in all prime neighborhoods of Dubai.
Robertson, the regional head of Jones Lang LaSalle (JLL) mentioned that the mega event will not benefit all sectors of the market to some extent. The most benefited sectors after residential and retail segments are the hotel, tourism, trade, and logistic sectors. Emphasizing the consequences of the success of EXPO’s 2020 bid, JLL has notified everyone that in order to enjoy long term benefits to the economy and real estate market, entrepreneurs have to handle the short term impact carefully. JLL also revealed that the real estate sector will be in focus from 2014 to 2019. The market study also revealed that developers, who have major landholdings around Dubai World Central, are set to inaugurate construction work on mega projects in the coming months for completing them to deliver before 2020. Well planned infrastructure and real estate project investments proffer remarkable growth opportunities for other related industries like tourism, manufacturing, media, and education. Besides completing mega real estate projects before this event, Emirate is also focusing to upgrade existing infrastructure. The major example of such infrastructure projects is an extension of the Dubai Metro Purple Line. The overall market optimism has efficiently dragged investors to make long term investments in iconic real estate projects. Instead of sprouting new investment opportunities, substantial rises in asking price and rents for land plots, villas, and apartments have also been observed in projects near to the EXPO site i.e. Dubai World Central and Jebel Ali Area. The possibility for rising in asset prices near the site of EXPO has already been predicted by our residential real estate agent Naveed Khan. According to his estimate
“If Expo 2020 is confirmed, I expect some price increases specifical prices in the Dubai Word Central area.”
Analysts also predicted that there could be an instant bounce in asset prices with a regular increase in demand. In contrast with prices, rents are not expected to increase on an immediate basis. Because real consumers take some time to mobilize business to enter the market. Whereas Dubai’s Real Estate Regulatory Authority (RERA) has also established a proper rent index to control asset rent for commercial and residential assets across the Emirate. Having considered the significant rises in the asset demand, real estate developers can make positive contributions to enable Dubai to execute the lifestyle needs of its visitors.
Besides these positive effects on the business and real estate sector after winning the bid for world events, there could be certain negative outcomes. A short term dip has been expected for residential and land sectors. Moreover, the success of becoming the first Middle Eastern county to host this event may also result in increasing the cost of living in Dubai. CBRE also mentioned that developers should estimate the actual demand and supply to avoid creating another bubble. It is essential to understand the need of constructing any project rather than just consider building developments for only a single event.
This Expo 2020 is believed to give a new face to the business sector of Dubai while attracting local and foreign investors across the world.