On Sunday, Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, announced the expansion of a new passenger terminal at the Al Maktoum International Airport in Dubai South.
The planned expansions of the new airport in Dubai are valued at AED128 billion ($34.8 billion approximately), and is expected to be five times larger than Dubai International Airport (DXB) with the long-term objective of accommodating 260 million passengers every year. In addition, once the construction is finished, all operations will be transferred from Dubai International to Al Maktoum International.
Following this recent announcement, property experts revealed to Arabian Business why it is ideal to invest in Dubai South properties right now.
Dubai South property market ‘to thrive’
“Since its inception, Dubai South has been an attractive investment destination given the different unique value proposition that it offers to tenants, especially at The Residential District, which features state-of-the-art amenities for their comfort and convenience. These include an upcoming British curriculum school; public parks; sports courts; retail shops; a 50,000 square-foot hypermarket, a mosque; a petrol station; and a public bus route connecting the district to the Expo Metro station,” Nabil Al Kindi, CEO of Dubai South Properties said.
Al Kindi added that The Residential District at Dubai South is already home to over 25,000 residents who enjoy its “distinctive lifestyle, range of facilities, and several gated residential communities with apartments and townhouses.”
The Dubai South Residential District is a thriving community that is attracting more residents each year with an annual growth rate of around 20 percent, Al Kindi said, adding that recent data shows an 11 percent increase in residential property transactions compared to the previous year, indicating a growing demand.
In addition, he said that the Dubai 2024 Urban Master Plan recognises Dubai South as a key area for future urban development, and the development of Al Maktoum International Airport is seen as a significant step towards realising the government’s vision.
“It is inevitable that such initiatives will have a positive impact on the real estate sector in the short term and long term,” Al Kindi said.
Echoing the sentiment, Paul Kelly, Operations Director of Allsopp & Allsopp Group said that more developers are more likely to move their operations to Dubai South, with plans of building more projects, “making it a great time to invest there.”
“As demand for the area increases, the property market in Dubai South is expected to thrive, resulting in higher returns on investment (ROIs) and more properties becoming available. It’s a smart move to start investing now before prices start rising and to hold onto your investments for the long term,” he said.
Dubai South residential and commercial real estate to see ‘increased demand’
Aside from developers, Allsopp & Allsopp’s Kelly explained once the new terminal’s construction begins, commercial hubs, retail outlets, malls and other industries are also expected to relocate to Dubai South.
“We can anticipate Dubai South turning into the next centralised hub of the city, which in turn will increase demand for properties in the area. Given its close proximity to the airport, we can also expect multiple investors to capitalise on their properties by turning them into holiday homes or short-term rentals. The Expo’s redevelopment and community expansion plans already have families considering relocating to Dubai South, while Palm Jebel Ali is likely to drive sales further in the upcoming years,” he said.
“This new area of Dubai has been growing in popularity in recent years, and the new airport will further drive demand,” Simone Dobson, Chief Operating Officer, Chestertons MENA, said in a media statement.
Dobson further explained that both residential and commercial real estate in the Dubai South area, will particularly see “increased demand.”
“In terms of residential property, there will be significant demand from airport employees who will migrate from Dubai International Airport to Dubai World Central, with properties in the affordable price bracket likely to increase in popularity. There will also be more demand for commercial, industrial and warehousing space from companies who supply airlines and airport operations,” she said.
In addition, Dubai South Properties’ Al Kindi said that certain real estate projects like South Bay, The Pulse Beachfront, and a forthcoming apartment complex set to launch soon, are likely to “experience increased attention due to their proximity to the Al Maktoum Airport.
“With a huge potential, Dubai South presents exceptional investment opportunities. The new terminal announcement, is expected to create more job opportunities in the area, which will consequently increase the demand for properties in Dubai South. We expect this momentum to sustain with early investors expected to benefit the most,” he explained.
Best property types to invest in Dubai South
When asked about the best property types to invest in Dubai South, Al Kindi explained that the area offers a range of residential options such as villas, townhouses, mansions, and an upcoming apartment complex featuring advanced amenities.
“There is significant demand for properties at Dubai South, evidenced by the quick sell-out of every new phase released to the market. The company addresses the preferences of its clientele, catering to their individual needs with precision,” he said adding that the overall real estate sector has been witnessing unprecedented demand since last year.
“Dubai South provides good investment opportunities for different offerings, especially that most units across our developments are much more spacious than what is available in the market,” he added.
For those looking at Dubai South from a purely investment standpoint, Allsopp & Allsopp’s Kelly suggests looking at apartments, however, he advised offering them on a short-term or holiday home basis.
“By doing so, your audience base would consist of new expats, holidaymakers, those on short layovers, and even weekenders who fly down for an event. You will have a higher ROI in the holiday home market and be able to exit the investment with greater ease, should you need to,” he said.
Are property prices set to rise following the opening of the new Al Maktoum Airport passenger terminal?
According to Kelly, property prices in Dubai South and nearby areas are “expected to rise steadily in the upcoming years.”
“The general direction of these prices will be upward due to continuous developments, infrastructure improvements, and new entertainment options opening up in the area. It’s a clear upward trend, and starting from this week, we anticipate a significant increase in market activity in these areas,” he said.
Adding to this, Dubai South Properties’ Al Kindi said the completion of the airport is expected to “significantly increase” job opportunities in Dubai South area and “act as a catalyst for new properties, offices, retail, hospitals and other social infrastructure.”
“Based on the forecasted population growth to one million, pricing at Dubai South is set by thorough market research and reflects current market dynamics. The company’s commitment is to provide premium-quality offerings that elevate the lifestyles of its customers,” he said.
Chesterons MENA’s Dobson also explained established residential communities, such as Discovery Gardens, Dubai Investment Park and Al Furjan are also “set to benefit” as Dubai World Central becomes the new infrastructure centrepiece of Dubai.
“We predict new developments along Sheikh Mohammed bin Zayed Road (E311) and Emirates Road (E611). The already thriving industrial areas of Dubai Investment Park, Jebel Ali and Dubai Industrial City, as well as the new, but operational Dubai South Freezone, will also enjoy further growth.
“The new airport will play a key role in realising the Dubai 2040 plan, further reinforcing Dubai’s current position as world-leading hub for business, real estate, tourism and retail. Meanwhile, the site of the existing Dubai International Airport will offer prime space for new investment, opening up a golden opportunity to regenerate the area to bring further economic growth to the city,” she concluded.
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