Dubai’s newest airport will prove to be a catalyst for a fresh wave of development in the southern part of the city, according to property consultancy Cluttons.
The firm argued that the real estate sector would be one of the biggest beneficiaries from the two-phase development of the airport, which will cover a 65km2 area in Jebel Ali.
Plans for the $32.6bn site were unveilved to Dubai’s ruler and UAE vice-president HH Sheikh Mohammed Bin Rashid Al Maktoum earlier this month.
Cluttons said Dubai International Airport is already the world’s busiest hub, and with aviation’s contribution to GDP expected to increase to 32% by 2020 (from 28% currently) – due partly to plans to make Al Maktoum International the world’s largest airport – this will increase job creation and the demand for residential units.
Faisal Durrani, Cluttons’ international research and business development manager, said the Expo 2020 had already created “a flurry of construction activity across the city”, but said that he expected the commercial sector to be the biggest beneficiary.
Although Dubai is still recovering following the recent downturn, with issues over strata ownership keeping many buildings vacant in parts of the city, there has been an increase in demand for industrial and logistics space around the new airport.
“With plans now becoming clearer surrounding the development, we expect to see a much more robust and diversified base of occupiers vying for a position around the new aerotropolois, which is set to have an annual passenger capacity of 220mn once fully developed,” said Durrani.
“Although it remains unclear at this stage how long the two-phased development will take to complete, it is clear that the airport will grow in significance as a cargo hub as the capacity crunch at Dubai International forces the relocation of all cargo traffic.”
He added that the airport would also benefit from its proximity to Jebel Ali port and the planned Etihad rail freight link.
Together, these are “starting to create a very attractive proposition” for industrial occupiers.
“In fact, we have already seen several surrounding industrial freezones such as Techno Park and Dubai Industrial City announce expansion plans not only to cater to the burgeoning level of requirements, but also to help capitalise on the demand yet to materialise from being on the doorstep of the world’s largest and arguably most important aviation nexus.”
