Dubai mulls allowing metro operators to develop property

01 September 2014

Dubai Roads & Transport Authority considers new business model to cut subsidies and fund further investment

Dubai’s Roads & Transport Authority (RTA) is mulling plans to allow operators of the emirate’s new metro lines to invest in property in a bid to end subsidies and fund further investment.

The new model being considered is based on the system used in Hong Kong, according to Abdul Redha Abu al-Hassan, director of rail planning and projects development for RTA.

Hong Kong’s MTR Corporation actively develops properties next to railway stations to bring in extra revenue.

“[Under the model we’re studying] the company that is running the metro has the authority to buy and sell properties and to develop,” says Al-Hassan.

“We are studying this as a possibility for Dubai. For the new lines we may fund the development in partnership with the private sector, a PPP [public-private partnership]. And that needs a real estate business with it to cover the costs.”

Dubai’s metro system is heavily subsidised, but the RTA says even without the implementation of the new model the system is on track to cover its costs by 2017 using revenue from tickets, retail outlets in the stations, and selling naming rights for the stations.

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