International real estate consultant Cluttons reports that with the opening of the first phase of the Dubai Tram network today is set to add permanent long term value to residential values in Dubai Marina
International real estate consultant Cluttons reports that with the opening of the first phase of the Dubai Tram network today, the emirate’s first truly community focused infrastructure project, is set to add permanent long term value to residential values in Dubai Marina, while setting a benchmark for other parts of the city.
The 10.6km route that takes the Dubai Tram around Dubai Marina and along Al Sufouh road is expected to go a long way in alleviating the chronic traffic issues Dubai Marina and the Jumeirah Beach Residence area have become synonymous with. Crucially, Cluttons believes that through such localized infrastructure investments, the government is adding long term infrastructure premiums to residential values.
Cluttons’ international research and business development manager, Faisal Durrani commented, “The Dubai Tram marks another milestone in the evolution of Dubai’s infrastructure. Five years on from when the first Dubai Metro trains took to the tracks, residents are now going to get their first taste of community transport infrastructure. Like elsewhere in the city, residential values in Dubai Marina have been pegged back by government regulation at a local and federal level, yet we still recorded a 4% rise on average between January and August, against 7% for Dubai as a whole. We must however take a longer term view as the Dubai tram is exactly the sort of infrastructure that the Dubai Marina area is likely to benefit from, and over time, this will start to significantly bolster house prices.
“Tenants and buyers are already actively seeking to be in close proximity to the Marina’s Metro stations, The Beach, and Jumeirah Beach Residence. We expect that the Dubai Tram stations dotted around the Marina will similarly drive demand up in their immediate vicinity.”
Elsewhere in the city, the Dubai Trolley in Downtown Dubai is expected to commence operations in the first week of December and Cluttons expects this to transform connectivity in Downtown Dubai.
Durrani continued: “The Dubai Trolley is another example of how a neighborhood transportation network will directly impact property values as connectivity and access are improved dramatically, but such localized schemes will only go so far.
“The key now to unlocking the true potential of public transport”
“Unlike the vast established public transportation networks of larger cities like London for instance, Dubai still has a long way to go. During the summer, UK building society Nationwide revealed that being located within 250m of a Tube Station in Greater London could add as much as 10.5% to the value of your property, which equates to about AED 250,000 (US$70,000). While we are not looking at uplifts as significant as that just yet, there is a rapidly growing appreciation in Dubai of the benefits of being close to a public transportation node.”
The differentiating factor for the emirate is the fact that infrastructure has always played catch up to the explosive urban growth and as a result Dubai is in the unique position of having multiple business districts, stretching from Deira to Sheikh Zayed Road and from Downtown Dubai and the DIFC to Jumeirah Lake Towers.
Durrani concluded: “The key now to unlocking the true potential of public transport is to stitch together all of Dubai’s communities in a cohesive and sustainable way, which makes getting around easy. There are the obvious challenges of putting infrastructure into established parts of the city, but for somewhere like Downtown Dubai where values have risen by 5% to AED 1940 psf (US$ 530 psf) this year, excluding the Burj Khalifa, we can easily see transport linked premiums rising exponentially, once all our communities start being linked together.
“While the Dubai Metro transformed access across Dubai, this was an exceptionally successful macro solution to an acute problem, but the challenge now is creating an integrated and accessible world class city that is pedestrian friendly and the benefits to real estate values will follow naturally.”
Su BAHADIR // email@example.com