How will Dubai’s new Al Maktoum International Airport impact real estate?
Savis Realty
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This week began with the significant announcement of injecting a $34.8 billion investment to develop passenger terminals and other infrastructure at Al Maktoum International Airport, which will be Dubai’s new hub of air transit, operations, and cargo within 10 years.
Designs have been approved and construction is already underway on the new airport, which is also known as Dubai World Central and located in Dubai South — a prime and up-and-coming location in the emirate.
With upwards of $272 million (AED1 billion) in land transactions recorded in the surrounding area since January 2024 alone (according to the latest data from Dubai Land Department) and plans to settle one million residents around the area once developed, Al Maktoum International Airport is expected to have a significant impact on the real estate in Dubai South, as well as the nearby residential areas, industrial and free zones, and logistics hubs it connects with.
We asked the experts on what to expect.
Surge in Dubai South real estate demand and interest
First of all, Dubai South’s strategic location that connects with major arterial roads and cargo transit facilities is expected to attract property seekers looking for something affordable and close to key Dubai locations and attractions.
“Dubai South has been a home ground for innovation ever since its conception around Expo 2020,” Cherif Sleiman Chief Revenue Officer at Property Finder told Construction Week Middle East.
“The acceleration of operations and consequent shift to the new airport in Dubai South will open doors for more interest across property seekers, while boosting searches in many nearby areas as well. Historically, large projects such as this lead to exponential upticks in community interest, and the ongoing development of Dubai South lends to a new city center equipped with cutting edge planning and infrastructure.”
Paul Kelly, Operations Director, Allsopp & Allsopp Group, also expects to see a highly positive impact on the property market in the upcoming years.
“People in the market for home ownership or investment will likely be taking a renewed look at Dubai South this week. There are multiple positive indicators here at the moment, particularly for those in it for the mid-long term,” he said. Given its close proximity to the airport, investors can be expected to capitalize on properties by turning them into holiday homes or short-term rentals.?
However, Kelly expects only a minor impact on existing communities in Dubai.
“People typically establish a strong sense of community in their current areas, so we do not anticipate any sudden mass relocations as such. There have not been any notable increases in available properties either, which means the secondary market will possibly only see a significant impact in the years to come.”
That could potentially change later this year as the off-plan market heats up in these areas with more and more projects launched in Dubai South and its surrounding areas, which may result in increasing interest.
Nevertheless, the prospect of a steady stream of tourists, business travelers, and long-term residents will entice local and international investors to allocate their resources in the area, said Alec James Smith, Director of Sales and Leasing at Savills Middle East.
“This investor interest will directly impact prices by driving demand and creating a competitive real estate market.”
Accelerated development and investment around Al Maktoum International Airport
Dubai South’s emergence as a new central business district will drive the need for accelerated construction to accommodate the expected influx of residents, according to Faisal Durrani, Partner and Head of Research for the MENA region at Knight Frank. An anticipated demand-supply imbalance could lead to sustained upward pressure on prices.
“How the supply story plays out will be one to watch,” said Durrani, “Particularly as Dubai is only set to see 22,000 homes a year delivered over the next five years, well below the 70,000 units needed each year to accommodate a population of 7.8 million by 2040.”
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“Purely in the basis of the expected demand-supply imbalance, prices in the medium-long term are likely to experience sustained upward pressure, especially around Dubai South,” he added.
Simone Dobson, Chief Operating Officer, Chesterton MENA, also said the undoubtedly lead to increased demand for both residential and commercial real estate in the Dubai South area
“In terms of residential property, there will be significant demand from airport employees who will migrate from Dubai International Airport to Dubai World Central, with properties in the affordable price bracket likely to increase in popularity,” said Dobson.
There will also be more demand for commercial, industrial and warehousing space from companies who supply airlines and airport operations, she said, with established residential communities, such as Discovery Gardens, Dubai Investment Park, and Al Furjan also set to benefit.
“We predict new developments along Sheikh Mohammed bin Zayed Road (E311) and Emirates Road (E611).?The already thriving industrial areas of Dubai Investment Park, Jebel Ali, and Dubai Industrial City, as well as the new, but operational Dubai South Free zone, will also enjoy further growth.”
Meanwhile, the site of the existing Dubai International Airport will offer prime space for new investment, opening up a golden opportunity to regenerate the area to bring further economic growth to the city.”
Improvement of existing infrastructure and mixed-use communities near Dubai South
The expansion of the Al Maktoum International Airport is also expected to prompt infrastructural upgrades and create mixed-use and high-end residential communities in the vicinity, said Smith at Savills Middle East.
Improved amenities and transportation networks may also drive up property prices.
“Many real estate developers have already seized the opportunity to create mixed-use and high-end communities that offer a blend of residential, commercial, and recreational spaces,” Smith added.
“These communities cater to the needs of modern living and attract a diverse range of residents, contributing to increased demand and subsequently higher prices. Examples of this from top-quality and reputable developers in the area are Majid Al Futtaim’s Tilal al Ghaf and Emaar’s Oasis project, both of which are successfully sold-out villa communities, surrounding manmade crystal lagoons, and attracting end users and investors alike to the previously unused land.”
“Over the past two years specifically, the trajectory of prices for communities such as Emaar South, which is the most notable community in the vicinity of the new airport terminal, has already exhibited an upward trend,” Smith said.
“While fluctuations due to market conditions do occur, the overall trajectory for this community remains positive, and this has attracted many more developers to the area, reinforcing the influence of this anticipated announcement on the local real estate market.”