Dubai South Properties, which is building real estate at the area encompassing Al Maktoum International Airport and the Expo 2020 Dubai site, expects to invest Dh2 billion in residential schemes by the end of next year, its chief executive said.
Around half of that has already been spent building 6,000 homes over the past two years, to be delivered by 2020.
The government-owned entity has also spent an additional Dh1bn on infrastructure and utilities to serve Dubai South Residential City as it is developed over the coming years.
“We are very careful with what types of properties we bring to Dubai South to make sure there is no saturation – we do not want to jeopardise what else is going on in the market,” Mohammed Al Awadhi said in Dubai on Wednesday.
Together with third-party developers building smaller clusters of homes, the total investment to 2020 “could easily reach Dh2.5bn”, the chief executive said during an event to update reporters on the scheme’s progress.
Dubai South, formerly known as Dubai World Central, was launched in 2006 as the world's first "aerotropolis", with Dubai's second-largest airport, Al Maktoum, at its core.
The programme is intended to be a new urban centre for Dubai, and has seven districts spanning 145,000 square kilometres, including a logistics zone close to the airport and an office development.
Several projects at Dubai South Residential City have already been completed or are nearing completion, bringing thousands of new homes to the emirate, Mr Al Awadhi said.
The Pulse, a freehold mixed-use community comprising 1,200 new homes, is set for handover from mid-2019, while Crew Village, a luxury shared-living development built on behalf of clients, is set to be completed in 2020.
Two more communities, The Villages and Park Lane, have been designed and will be built from this year. The company is seeking joint venture partners to bring the rest of phases one and two – around 30 per cent of the total Residential City masterplan – to fruition, the chief executive said.
He told The National that Dubai South Properties intends to announce a new mixed-use project spanning almost 1 million square feet next month, following an agreement with an unnamed developer. He declined to reveal further details.
Residential City Retail – a shopping district – will bring 30,000 square feet of retail space for leasing by 2020, with ambitions to develop a total 18,581 square metres in the longer term. There is enough land at the site to design a third and fourth phase after Expo 2020, the chief executive said.
Outside Residential City, plans are under way to provide at least 2,000 hotel rooms across the wider Dubai South district before Expo 2020. And the first properties at Sakany, a 22-building staff accommodation complex intended to house 17,000 workers in time for the Expo, have been completed. An additional residential scheme, Sakany One, will provide cheaper housing with a shopping centre nearby.
Dubai has witnessed a real estate market decline in the past three years on the back of lower oil prices, which have crimped consumer purchasing power and driven a fight for affordability across the Emirates.
Residential sales and rental prices have fallen, but developers are bringing new, cheaper products to market to meet demand. “Now is the time for developers to be realistic and provide true value for money,” Mr Al Awadhi said.
“Cautious”, smaller developers are retreating right now, which is bringing greater equilibrium to the market and resulting in higher-quality product, he said.