Jones Lang LaSalle warns of market sentiment boost causing excessive price growth
The World Expo 2020 decision will be the single most important influence on prices in the UAE real estate market in 2014, according to the regional head of real estate services group Jones Lang LaSalle.
Delegations of the four cities bidding to host the major world event have arrived in Paris, ahead of the decision due to be announced on 27 November, with a win for Dubai set to provide a boost to the emirates property market.
While the Dubai real estate market is poised for growth regardless of the expo, the success of this bid will act as the single most important influence on the real estate sector across the UAE in 2014, predicts Alan Robertson, chief executive officer (CEO) of Jones Lang LaSalle for the Middle East and North Africa (Mena) region.
Expo 2020 will not benefit all of the sectors of the Dubai real estate market to the same degree, he says. The hotel and logistics sectors [will be the] the biggest winners, while the residential and retail sectors will also derive significant benefits.
Robertson warns that while the expo would bring long-term benefits to Dubais economy and its real estate market, the short-term impact needs to be managed carefully to avoid excessive price growth or overdevelopment.
According to a recent survey by CFA Society Emirates, investors are concerned a successful bid by Dubai to host the World Expo 2020 could lead to another economic bubble.
Jones Lang LaSalle predicts that if Dubai wins, improved sentiments are likely to drive a sudden increase in the asking price for both land sites and existing villas and apartments close to the expo site.
A number of developers have major land holdings around Dubai World Central and plans to develop these are likely to be kick-started on the back of improved sentiment resulting from the World Expo2020 decision, the company forecasts. [Dubai-based developer] Nakheel has recently launched 500 new land plots in their Al-Furjan project at Jebel Ali and we would expect a rash of further announcements over the coming weeks, as other developers seek to sell either land plots or off-plan residential units.
Destination Dubai 2020
On 28-29 January 2014, MEED will hold its Destination Dubai 2020 event. The two-day conference will bring together the emirates key government-related entities and stakeholders to discuss their respective growth plans and outline Dubais ongoing expansion to 2020 and beyond. For the very latest information regarding this event, please visit www.destinationdubai2020.com