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Al Maktoum International Airport to fuel real estate boom in Dubai South

The $35bn Al Maktoum International Airport is set to spark a surge in real estate development in Dubai South

Al Maktoum International Airport to fuel real estate boom in Dubai South

Recently, Dubai’s Prime Minister and Vice President Sheikh Mohammed bin Rashid Al Maktoum announced that designs have been approved and construction has begun for building new passenger terminals at the Al Maktoum International Airport. The Emirate’s ruler in his statement said that the new terminal would be five times the size of the current Dubai International Airport, and handle up to 260 million passengers annually.

Following the announcement, Emirates Airlines also revealed that once work is completed, the airport will be the new home of flagship carrier Emirates and feature five parallel runways and 400 aircraft gates, announced Emirates Airlines.

Dubai International Airport has been the world’s busiest airport for international travel for 10 years in a row, with nearly 87 million passengers passing through last year. This high level of traffic has put a strain on the airport’s capacity. Despite the challenges, Dubai announced a record 17.15 million international overnight visitors in 2023, showing a nearly 20% increase from the previous year. The city was also voted the best city to visit for the tenth consecutive year by TripAdvisor. The airport continued to see high numbers, welcoming over 3.67 million passengers in the first quarter of 2024. Now, with expansion plans at the Al Maktoum International Airport underway, the stakes just reached a new level.

Paul Griffiths, the CEO of Dubai Airports, said the development would solidify Dubai’s position as a leading aviation hub.

“The growth of Dubai has always been hand in hand with the growth of its aviation infrastructure and today we see another bold step on that journey,” Griffiths said in a statement.

What will be the impact of the Al Maktoum International Airport on the real estate sector?

The airport will be the centrepiece of a much larger scheme, called Dubai South, which envisages the creation of a whole new city in a 145-square-kilometre stretch of desert just south of Dubai.

This entire new district, of which some pieces are already starting to take shape, will have eight neighbourhoods each allocated to a specific industry or activity, with a mix of residential and commercial areas as well.

“As we build an entire city around the airport in Dubai South, demand for housing for a million people will follow. It will host the world’s leading companies in the logistics and air transport sectors,” said Sheikh Mohammed bin Rashid Al Maktoum.

“We are building a new project for future generations, ensuring continuous and stable development for our children and their children in turn. Dubai will be the world’s airport, its port, its urban hub, and its new global centre.”

Hence, it would not be wrong to say that the news of the new airport has fuelled the community of Dubai South to emerge as a growing hub for real estate and an ever-increasing centralised space within the city. More developers are looking to launch projects on the south side of Dubai that will reshape the city’s real estate landscape.

Furthermore, this new development is anticipated to create between 10,000 and 20,000 new job opportunities solely within the airport, resulting in a huge demand for housing near the airport.

Alongside the large residential developments, experts also anticipate a surge in demand for commercial real estate, including hotels, schools, hospitals, and office complexes in the surrounding area, to support the growth of this new city hub.

Lewis Allsopp, chairman of Allsopp and Allsopp mentions that when Dubai announced Expo 2020, the area surrounding the Expo site saw extensive infrastructure developments, with new roads, exits, and metro stations built to ease movement. While the Expo communities saw a price hike of nearly 10-15% within and around the Expo, we suspect Dubai South will likely follow a similar path.

He further continues, “Within the next ten years, the real estate landscape in Dubai South and its surrounding areas will change heavily. Multiple key developers, commercial hubs, retail outlets, malls, and other industries will inevitably expand to Dubai South, creating the city’s next centralised hub. With a surge in demand expected, the property market in Dubai South will see higher returns on investment (ROIs) and also an expansion in property availability. For investors planning to invest now, the community will present a strategic opportunity to capitalise on the potential price increases and secure long-term gains. Since increased project launches are expected, this will also drive greater interest from international investors and buyers alike.”

Overall, the Al Maktoum International Airport is designed to enhance connectivity, accessibility, and passenger experience, revolutionising air travel both domestically and internationally. This development is set to create a positive environment for real estate demand, as it offers a promising outlook for growth and opportunities in the industry.