Tram launch unlikely to significantly boost surrounding real estate

The Dubai Tram stops outside buildings in Media City, the Marina and Jumeirah Beach Residences and all three areas are expected to undergo only a small bump in rents and sale prices.

DUBAI // The launch of a tram network is likely to boost property prices near stations, but the effect is not expected to be as pronounced as first anticipated, experts say.

The Dubai Tram stops outside buildings in Media City, the Marina and Jumeirah Beach Residence and all three areas are expected to enjoy a small rise in rents and sale prices.

But the impact is unlikely to exceed the minimal effect the Metro had on some buildings, say real estate analysts.

“It’s very difficult to identify what impact the tram would have compared to other market effects,” said Craig Plumb, head of research for the region at JLL.

“It’s fairly obvious though that the buildings which are right next to the tram station are likely to benefit more than those which are further away.

“That’s certainly been the case in Jumeirah Lakes Towers with regards to the Metro. It is not so much in terms of prices or rents but it is more about being able to sell them or lease them more quickly. The take-up rate is affected more than the rent.”

Matthew Green, head of research at CBRE, said that even if there were a slight increase in properties directly facing the tram stations, it was only within a very narrow radius.

“It really depends on how far people are willing to walk in order to access public transport,” Mr Green said.

“The buildings in very close proximity to the tram stations would see a potential uplift but I don’t think it’s as dramatic as people would have you make out.

“The buildings that are nearby but not in direct proximity might not see any effect. It’s not as you would expect it to be in parts of Europe, where people are willing to walk a bit more, and put a greater emphasis on public transport. Here the car is a key part of people’s lives.”

He said he did not expect the tram network to decrease road use, even in areas which are directly served, such as JBR. “The volume of traffic on the roads doesn’t seem to be decreasing, despite an improvement in the public transport network in the past few years,” Mr Green said.

“Moreover, the tram doesn’t really reach areas that it’s needed. A connection to somewhere like the Madinat, on the tourism side, would have probably been a lot better.”