Dubai development heads south again

16 May 2017

Construction work is set to start on key waterfront development

Before the property market crashed in late 2008, Dubai was busy starting work on projects beyond Jebel Ali Port that would have extended the city all the way down towards the Abu Dhabi border.

The two largest projects were Nakheel’s Dubai Waterfront and Limitless’ Arabian Canal. Since late 2008 there has been little construction activity on either project as developers preferred to focus on projects within masterplanned developments that are already established and present little in the way of infrastructure risk for investors. Although not a real estate development, the exception to the rule was the Dubai Parks theme parks development that was completed in late 2016.

Five years after Dubai’s property market began to recover from the 2008 downturn that trend is starting to change as developers start to revisit these old projects.

Nakheel has tendered infrastructure works for the Madinat al-Arab at Dubai Waterfront, which is a district for third party developers to build properties along the last stretch of natural coastline in Dubai.

Many of these plots were sold before 2008 and if all goes to plan once the infrastructure is complete building work in the area should follow. Nakheel is also developing its own properties at Dubai Waterfront. It plans to tender construction contracts soon for Jebel Ali Gardens, which will be affordable accommodation similar to its existing Gardens and Discovery Gardens developments near to Ibn Battuta mall.

These developments should benefit from projects being developed inland. Dubai South is home to Al-Maktoum International Airport, the Expo 2020 site and a range of other supporting projects that include residential districts such as Emaar Properties’ Emaar South as well as business parks and logistics zones.

The Expo 2020 site is the immediate focus for development and the event organisers say that $3bn of construction contracts will be awarded this year. The local/UK Al-Futtaim Carillion has already been awarded a $600m deal for the thematic districts, and a range of other contracts have been tendered for work on a retail centre, interchanges and the main pavilions.

The other component that is being developed is the airport. Local contractor Alec started construction work last year on an expansion to the terminal building at Al-Maktoum International airport, and tendering has started for the first components of the much larger $33bn airport expansion that is now understood to be scheduled for completion in 2027.

The new aviation hub will be strategically located close to Jebel Ali Port and promises to further enhance Dubai’s already strong trade and logistics offering.

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