As the supply of additional office and apartment buildings continues unabated in Dubai, the highly competitive property leasing rates are now being dictated by a new market dynamic.
Location, or specifically close proximity to a Dubai Metro station is now becoming a priority for many tenants, who are prepared to pay up to 20% extra for the privilege, says Asteco, the largest property services company in the United Arab Emirates.
“The Dubai Metro has added a whole new market dynamic and as the network is rolled out across the Emirate, the rental disparity will become even more pronounced than it is already,” said Asteco CEO Elaine Jones.
Evidence from many international markets consistently reveals that land and property values and ultimately rentals, within the vicinity of stations linked to metro lines increases significantly. For example, homes in central Paris within five-minutes walking distance of a metro station are up to 17% more expensive than those of similar properties further away.
However, what is interesting is that the increases do not occur usually until after the stations physically open, not when the line is announced or under construction.
“This would give savvy investors and tenants an opportunity to keep one step ahead of the market,” added Jones.