Aviation growth in Dubai set to boost real estate sectors, it is claimed
The real estate sector in Dubai is expected to emerge as one of the principal beneficiaries of the development of Al Maktoum International Airport, according to property firm Cluttons.
Plans for the two phased project, which will cover an area of 65 square kilometres in Jebel Ali have been unveiled with the city's entire economy set to benefit significantly.
Dubai International Airport, is already the world's busiest hub for international traffic, and continues to play a vital role in the development of the emirate's economy as aviation remains a core pillar for growth.
With the aviation sector's contribution to GDP set to rise to 32% by 2020 from 28% at present, there will be a significant ripple effect on the number of jobs created.
‘Aviation has historically been a significant contributor to the city's growth. Once again, the sector looks set to deliver the next wave of growth for Dubai, well beyond the current horizon of the 2020 Expo, which is already translating into a flurry of construction activity across the city,’ said Faisal Durrani, Cluttons' international research and business development manager.
‘The residential sector will no doubt be an obvious long term benefactor of the significant rise in the number of jobs being created, with both lettings and buyer demand set to rise significantly as the number of households in the city increases. However, it is the commercial sector that stands to benefit the most in the short to medium term,’ he added.
According to Cluttons, the office market continues to recover following the downturn, with occupier activity still ticking upwards across the city as occupancy levels recover in many pockets of the city, although there still remain some issues surrounding strata ownership, which has left vacancy rates abnormally high in some select locations.
‘The development of Al Maktoum Airport will no doubt help to drive further activity as aviation related industries begin to mobilise and take up position in the city set to house the world's largest airport,’ explained Durrani.
‘For some time now we have experienced a steady rise in the number of enquiries from industrial occupiers, with sites around Al Maktoum Airport being sought by logistics, freight forwarding and distribution companies,’ he pointed out.
‘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 220 million once fully developed. 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.
Durrani also pointed out that the added benefit of Jebel Ali Port, a planned Etihad Rail freight and passenger station and the multitude of residential communities planned for the Jebel Ali area are together starting to create a very attractive proposition for the industrial occupiers.
‘In fact we have already seen several surrounding industrial free zones 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,’ he concluded.