On track for higher rents

(SUPPLIED)   

Property around the proposed locations of Metro stations in Dubai are witnessing a jump in rents and prices.

Demand for accommodation near stations on the Red and Green lines has pushed up the cost of apartments and villas.

The price of land at these sites has also risen, with expectations of a sharp increase when the Metro begins operation in September next year.

A recent report by Asteco shows property prices have increased by more than 20 per cent annually in regions close to Metro stations compared to an average of 12 per cent to 15 per cent rise in other parts of Dubai.

“In every city where a rail transport system exists, you find high demand for property  nearby. This pushes up prices of property and the rents soon follow,” said Andrew Chambers, Managing Director of Asteco.

The two Metro lines currently under construction have a combined total of 47 stations spread across a sizeable part of the city.

BurJuman station in Bur Dubai will be one of the two Metro stations where Green and Red lines converge. And with 18 months to go until its opening, rents have increased sharply in apartments close by.

For example, a two-bedroom apartment being rented for Dh85,000 in 2006 is now going for Dh124,000.

Mohamed Hassan, General Manager of Emirates Real Estate which manages a number of properties near the BurJuman station, said: “People know the advantages of living next to a Metro station in terms of transportation and want to benefit fully from it, so there is high demand for accommodation in this area.”

As a result of the rise, a number of tenants have been choosing not to renew their tenancy agreements as rents in areas near Metro stations become unbearably high, with some seeking cheaper apartments in other parts of the city. Rents close to Al Rigga station have been rising disproportionally and are expected to rise further in the coming months.

Alisha James, a media professional who has lived at her Al Rigga apartment since 2002, said: “We have endured all the mess related to the construction of the station, but we will not be able to benefit from it as the rents are increasingly going beyond our means.”

At a recent conference, Sultan Butti bin Mijrin, Director-General of the Dubai Land and Property Department, told reporters the price of property along Metro lines was gradually increasing at a rate higher than in other parts of the city.

The 52.1km-long Red Line runs from Jebel Ali to Rashidiya, while the 22.5km-long Green Line runs from Al Qusais to Jaddaf.

The Al Sufouh tram, which will operate as a feeder network to the Red Line, is also pushing up prices in Al Sufouh area as demand increases. The 47km-long Blue Line, which will run along Emirates Road, and the 49km-long Purple Line on Al Khail Road are also fuelling an increase in property prices along the two highways.

Developers’ requests

To benefit from the associated Dubai Metro property boom, some developers have approached the Rail Agency and requested to have stations built close to their developments to offer greater convenience to residents.

The main developers are:

Nakheel: Ibn Battuta Station, Jumeirah Lakes Towers Station,  Nakheel Station, Palm Deira Station

Emaar: Marina Station, Burj Dubai Station

Limitless: Jafza/Limitless Station

Dubai Properties: Tecom Station, Business Bay Station, Financial Centre Station, Health Care City Station, Jedaff One and Jedaff two Station

Al Ghurair: Union Square Station, Salahuddin Station, BurJuman Station

Dubai Civil Aviation: Airport Terminal One and Terminal Three Station

Emirates Airlines: Emirates Station

Majed Al Futtaim: Mall of theEmirates Station, City Centre Station