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Tue 11 Feb 2014 10:47 AM

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Dubai, Abu Dhabi inching closer together

As both emirates develop their coastlines, the distance between them is shrinking

Dubai, Abu Dhabi inching closer together

The distance between Dubai and Abu Dhabi is shrinking as both emirates increasingly prefer to build along the coast rather than further into the desert, an analysis by Jones Lang LaSalle (JLL) shows.

Plans announced since the economic crisis show Dubai has changed development priorities from inland projects such as Dubailand, to infill, such as the Mohammed Bin Rashid City (MBRC) project announced last year, as well as areas in the south, particularly around the new Dubai World Central (DWC) and Jebel Ali.

Meanwhile, Abu Dhabi is edging north towards the new Khalifa Port, situated halfway between the two city centres but within the capital's boundaries, as well as filling in the centre.

"We think the trend will be for linear growth between [Abu Dhabi and Dubai]," JLL CEO Middle East and Africa Alan Robertson said during a media briefing on the two property markets on Monday.

"It's a healthy thing, because that's where the transport and infrastructure is and is coming, not just in terms of the new roads which are being built, but the railway as well.

"It makes sense to build around transport nodes rather than developing further and further inland into the desert; it makes more sense to develop along the coast."

JLL head of research for the Middle East and Africa Craig Plumb said the World Expo 2020 site at DWC also would drive more development near the emirates' border.

"[DWC is] strategically located between the two emirates, [and] with the new airport [and the] new port at Kizad, there definitely seems to be more cooperation between the two emirates," Plumb said.

"We do expect, as a long-term trend, to continue to see them grow together."

Plumb said Dubai had modified its development map since the 2008-09 economic crisis.

"Overall we think the city of Dubai is growing in two directions: it's growing more to the south and it’s also growing back in on itself, back towards the centre," he said.

"One of the interesting things about the MBRC (Mohammed Bin Rashid City) is that a lot of planning are things that were originally going to be in Dubailand - further into the desert - [and] are now being pushed into MBRC, back towards the centre of Dubai.

"So it's a deliberate policy to move the development back in for infill."

The second trend is moving south, towards Abu Dhabi and DWC.

"Again, a very deliberate policy," Plumb said.

"So rather than just growing into the desert, Dubai is being planned in a more strategic way."

The Kizad area in Abu Dhabi, less than 20 minutes from the Dubai border, also would become increasingly important as a strategic location between the two emirates.

Plumb said developers also had been increasingly working in collaboration since new projects were announced in the past year.

Dubai’s Emaar and Dubai Properties have tied up to develop The Lagoons, a 6m sqm master-planned city located within MBRC.

Meydan and Sobha also have partnered to establish a new company named Meydan Sobha Developers to build District One of MBRC.

“There is a greater recognition of the need for master developers to work more closely together and not necessarily just in competition with each other ... and therefore become less reliant on selling land to sub-developers,” Plumb said.

"We think that's a healthy thing in the overall market."

Also during his presentation, Plumb predicted Dubai properties sale prices would continue to increase this year, but at a lower rate than the 22 percent recorded in 2013.

Rents would rise by between 10-20 percent, compared to 17 percent last year, he predicted.

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