217 villas sold in four hours: Dubai might be coming back, says GlobalData

Dubai’s construction sector is showing tentative signs of recovery with government-controlled developers planning new projects in response to prices buoyed up by the emirate’s recovery from the pandemic, notes GlobalData, adding that big infrastructure schemes could follow.

Nakheel, Emaar and Meydan are all planning new projects, and one new residential scheme by Nakheel sold out this month within hours of being announced.

On 20 May, it revealed its first new project in years – a community of 418 villas known as Murooj al-Furjan next to the existing Al-Furjan community in Jebel Ali.

Within four hours of going on sale, all 217 villas in the scheme’s first phase had sold out.

"While opportunistic or tactical projects in established locations with proven demand will be the first to be launched, plans are also being considered for strategic projects in newer areas of the emirate: areas such as the Dubai Waterfront and Palm Jebel Ali area on the coast close to the Abu Dhabi border," said Colin Foreman, deputy editor at GlobalData’s MEED.

"Although work has begun in these areas before, few established communities exist. As Dubai’s centre of gravity continues to move south as a result of Al-Maktoum airport, the Expo 2020 site and the Dubai South development, the area could now be ready for development work again."

GlobalData expects that a real estate recovery would prompt major infrastructure schemes considered before the pandemic to move forward as PPPs, requiring international finance and delivery teams.

An example is a deep tunnel sewer network for the old areas of Deira and Bur Dubai, for which Dubai Municipality had been preparing to issue tender documents before Covid struck. It was expected to be tendered as a PPP similar to the UK’s Thames Tideway scheme.

The Green Line extension for Dubai Metro is another example.

"With government budgets still under pressure from the Covid-19 pandemic, it will be crucial for Dubai to develop alternative ways of delivering infrastructure if any recovery for the construction sector is to move beyond a boom in villa building," Foreman said.

Image: Dubai skyline at night (Ivan Siarbolin/Pexels) 

Further reading:

• "We don’t build anymore": Emaar confirms suspension of new construction in Dubai
• World-beating cantilever lift succeeds at Dubai’s One Za’abeel