The Dubai 2020 plan also aims to bring the World Expo, a showcase for the latest innovations in science and industry that is held every five years, to the emirate in the same year. Officials said it already has many major sports venues and the necessary infrastructure to host such global events but these will be greatly expanded.
The news has been met with enthusiasim. 'Dubai does have a lot of attributes in order to hold such large-scale events and the Government of Dubai is sending a strong message to the world by announcing the Dubai 2020 initiative. Hosting such a large-scale event does have a tremendous positive impact on different sectors, including the real estate sector,' said Blair Hagkull, Managing Director, Mena, Jones Lang LaSalle.
He explained that the next stage is for a planning committee to draw up a technical plan that will determine the supply and demand for existing facilities, accommodation and infrastructure. Jones Lang LaSalle has considerable experience having managed the facilities in the Beijing Olympics and as advisors to the UK Government for the 2012 Olympics.
Chet Riley of Nomura International said there is definitely a speculative activity that happens just before the launch of such large-scale events. 'We saw that in Spain, Sydney and in the UK too. There is always a run-up in the real estate prices before the event is held. However, we do not see any immediate impact on the real estate sector as the 2020 initiative is still a long-term plan,' he cautioned.
Robert Mckinnon, Managing Director of equity research at Al Mal Capital, said if people are convinced that the events are going to really happen in Dubai then the real estate market will see a positive effect.
'This is a long-term initiative and we don't anticipate any immediate surge in real estate prices as a result of the announcement. There could be some initial buying on the back of it, but any impact of this will be felt just prior to hosting the event,' he explained.
Mckinnon said hosting such events generally forced infrastructure spending. 'This is good for the real estate market as increased infrastructure spending will have a positive impact on the sector as well.'
He added that Dubai's infrastructure tends to be good when it is finished and Dubai is indeed equipped to provide good infrastructure and facilities to host events such as the World Expo and Olympics in 2020.
