By Andy Sambidge
Real estate expert says homes, offices close to metro could see 10-20% uplift.
Homes and offices located next to the Dubai Metro could see price uplifts of 20 percent but it may take up to five years to happen, a global real estate advisory firm said.
A report by DTZ said both residential and commercial properties within 400 metres of the city's new rail system could benefit by between 10-20 percent.
But Andrew Edwards, associate director at DTZ and author of the report, added that the price impact would not be even across the station network.
He said: "If the Dubai Metro proves popular and efficient then it is very likely we will see a significant impact on the values around stations. As a general rule, the larger the modal share (the percentage of people using the Metro in relation to other forms of transport), the larger the impact on surrounding values.
"The early signs have been positive. DTZ considers the potential uplift in the immediate vicinity of the Metro stations...could be in the region of 10-20 percent for both residential and commercial uses.
"Furthermore, those price hikes may not be seen immediately and it will take time for the Metro to be widely used and the accessibility benefits to be understood. In some cases, it has taken three to five years for price uplifts to filter through."
Edwards added: "The impact is likely to be more significant at certain destinations such as Jumeirah Lake Towers for residential and Dubai International Financial Centre for commercial. This is because there is a high concentration of residential use at JLT and commercial use at DIFC which is likely to translate into a high level of trip generation."
The report suggests that the current state of the property market was also a major factor and if it was in a downturn, the degree of accessibility would be irrelevant as prices were still likely to decrease.
DTZ added that Central Business District (CBD) locations were less likely to benefit from large uplifts because they were already accessible before the Dubai Roads and Transport Authority launched the metro on September 9.
One of the key findings of the report, DTZ said, was that land use and development was likely to change in Dubai as a result of the Metro with future development more concentrated within walking distance of the Metro stations.
DTZ employs more than 10,000 staff across 148 cities in 43 countries.
Another obviuos comment to try and push up and prop up real estate. Next he will prices will rise because the sky is blue but then again may not as it is darker when the sun goes down!! On a huge positive note- Why not just let the metro settle down and become an integral part of everyday Dubai rather than the novelty it is at present. Would it not be great to see an expansion of the service like connecting the monorail of the palm or more importantly creation of a circular line to other areas - it could be based on a normal tram at ground level - not as glamourous but just as effective. But the largest need would be connecting Shajah and Dubai - anybody driving in/out any day or time of the week can clearly see why - that would be a mass transit system to be proud of and with justification could be held up to rival that of other global cities.
"Homes and offices located next to the Dubai Metro could see price uplifts of 20 percent", 20% uplift from what price? The 2008 price, the sept 09 price or the Dec 09 price which could be lower than current prices, based on predictions from many so called experts?? This is another misleading article, I guess it should say that real estate next to the metro should command a premium over other locations by 10 to 20%, that would make more sense...
that's what he means karim. Prices will be 10% - 20% up on comparable properties, regardless of the market cycle, by virtue of their proximity to these stations. The problem with the article is that it claims the price variance would become more obvious over 4 or 5 years. Why? Research on other cities with metros will teach us that there are two points in time when the introduction of a transport network has a positive impact on the price of surrounding property. 1: When the scheme is first announced by the government; smart real estate market players rush to acquire property near to where the stations will one day be 2: Just before the system becomes operational; ie when it is a tangible, functional facility that can be seen to improve the lives of commuters and property users, it is then factored into prices. After that, price variance between property near to a station and further away from a station remains static. This is to say that no matter whether market prices move up or down, the difference between a property near a metro and one further away, will remain the same. That Dubai hasn't already experienced this worries me, it shows a complete lack of understanding of what it is to incorporate a mass transit system into an urban environment, both on behalf of the city planners and more so the real estate market. So much for real estate professionals. These guys are less professional, and more just a bunch of hobos who think they know what they're talking about and are in Dubai just to make a buck. I wonder how many of them would have left by now if the global economic situation was fine and it was just Dubai that had been hit.
Come on people; let's not try to fool ourselves like we did in 2008, speculating/planning 5 years ahead, to land up in the state that is, the hard facts of running on dreams. I personally think the Real Estate Industry (if you want to call it so) who are currently licking their wounded egos, need to start thinking how to manage current conditions rather than lead the public onto something that is a far cry. This is only the end of the beginning, we have'nt see the light of day when it comes to the reality of realty.
Guys don't jump on each article that brings positive news about Dubai and the UAE. As if you only want to believe negative vibs popping here and there attacking Dubai... Well to be honest I still believe Dubai has some great potentials and time will tell. There is no doubt that the Dubai Metro will uplift the surrounding areas and there is no doubt that the real estate market in Dubai will recover sooner or later, to what extend nobody knows. I would suggest that people who are not happy living in the UAE returns to their so called fancy destinations.
After reading a number of these recent expert articles on property in UAE, now I write comments for the sheer fun of it!!! Guys, don't take them seriously, they are meant for entertainment so just read them and enjoy the comedy. These experts, sitting in their fancy offices, keep bombarding us with their opinions based on assumptions and distorted facts and figures. By the way Alex, Dubai Sharjah Metro will never materialize. For example, if you come from Sharjah to Dubai on Beruit Road, check the time of the first Dubai traffic signal, then check the long cues on Sharjah side and how many cars are allowed to enter Dubai at a time. Bottom line is, easier commuting to Sharjah is not in the interest of Dubai, i guess you know what I mean. Keep writing comments and keep having fun.
Regarding the office prices, it depends on how many managing directors, CEOs and general managers want to catch a metro train to go to office! Funny, isn't it? Otherwise who is going to pay high rent so that her/his receptionist could easily go to the office!
Could'nt agree more Puma...and just by thinking loud does not portray unhappy people. Dubai certainly has a lot more to offer to its residents, and I hope all the unhappy people take Alan's advice.
Yes Alan you are right, Dubai has potential and it will recover, like rest of the world will, and thats about it.... But if any one is trying to convince me that the rip off land lords here will again be minting money by sucking every drop of a tenent's blood and properties will be sold at ridiculously high prices, well that probably will not happen. And you know what, that is the way it should be, this is a lesson for this land lord and property mafia, if they could understand... by the way, Dubai might have a lot of potential, but trust me what they are banking on is in many ways only wishful thinking and what they are building is not a sustainable community. If they think that 80% of their population is or will be able to rent studios at 100K or more, they are living in a fools paradise. In any normal society, majority of the population is middle and lower middle class. Can anyone give me a figure what percentage of Dubai development is being done to cater that segment??
Puma, Could you elaborate on what you were inferring about commuting to Sharjah and the traffic lights, I didn't understand (well it is near the end of the week)