By PNC Menon
The Dubai Expo 2020 will see an expected 270,000 new jobs created, causing greater demand in the housing market. Sobha Developers founder PNC Menon is seeing opportunities ahead.
2013 was a successful year for Dubai’s real estate industry showing strong recovery, improved regulatory framework and new project announcements. Backed by strong fundamentals, all indicators show that the market is recovering and poised for further growth in the coming years. Dubai enjoys the status as a developed city that is a safe haven for a diverse mix of nationalities.
Combine this with economic growth, an exchange rate that is pegged to the dollar and the availability of financing and you get a city that is extremely attractive to consumers and investors both from the East and the West. Further reaffirming that investor confidence is back in the real estate sector was the recent success of Cityscape Global 2013. The residential sector was the most dominant where 70 percent of all launches were offering residential villas and apartments at premium locations and price points. The exhibition saw billions of dirhams worth of projects announced including our own joint venture with Meydan Group. Meydan Sobha LLC FZ is an equally-split joint venture, responsible for developing over 47 million sq ft of prime freehold land in the heart of Dubai.
The first landmark project to be announced within Mohammed Bin Rashid City, it is aptly named District One. This expansive development will feature luxury residences, green parklands, waterways, a high-end shopping and dining pavilion and large recreational spaces creating one of the lowest density developments in the heart of any international city.
As you can see, market confidence in the future growth of the real estate industry is not a ‘myth’ but rather an actuality based on tangible and measurable recent performance. As you may recall the Dubai Land Department announced earlier in the year that the value of the real estate transactions had increased 63 percent year over year for the first quarter of 2013 reaching a figure of $12bn. These figures are a testament to the recent ranking of Dubai as the number two global real estate investment destination only after London by Cluttons’s International Private Capital Survey for 2013 — 2014.
Looking back, 2013 was a very successful year and we anticipate further growth spurred on by the most important accomplishment, the successful bid for Dubai to host the Expo 2020. The result is a forecasted $23bn boost to the economy over the next six years as estimated by Bank of America Merril Lynch.
In addition, the Expo will see an expected 270,000 new jobs created which in turn would lead to an influx of expatriates into the UAE causing greater demand in the housing market.
In the real estate sector, developers will have to plan strategically and phase out projects in line with demand conditions. This will minimise flooding of the market, ensuring that the sector is sustainable in the long term.