The biggest thing happening in Dubai is Expo 2020. It seems like almost everyone is aiming to generate benefit from the 25million visitors expected for the event.
For Expo 2020 an entire region has been developed with thousands of new apartments, villas, and commercial real estate.
There is word that the expected demand for real estate might not be fully met, and that is driving the prices of real estate upwards.
However, in all this euphoria and excitement, people are now beginning to ask a million-dollar-question: What is likely to happen once the Expo 2020 is over?
In the absence of a crystal ball, in order to answer this, we need to take a look at history.
Dubai’s Economic History
Dubai initially built its reputation as a trading post enroute to other Gulf destinations. Traders would bring their bulk cargo from around the world, then break the bulk in Dubai, and ship the smaller portions to ports upstream in the Gulf.
Discovery of oil opened a new chapter, that lead to unprecedented transformation across the entire region.
Dubai, again, rode the wave by becoming the regional hub. Many oil companies, and their support services providers chose Dubai as their base in the Gulf.
This triggered demand for better quality infrastructure, real estate, commercial, health, educational and entertainment facilities.
Dubai’s rulers have been known for taking bold, innovative steps. From crafting a trading hub out of a simple creek, to becoming the base of oil sector, they were not yet done.
Next came the era of free zones. They built the port for Jebel Ali Free Zone, capable of handling larger ships. The free zone provided the infrastructure of mega warehousing facilities attracting top companies of the world to setup their distribution hubs. Some event went into setting up assembly lines and factories. The tiny Jebel Ali village became the apple of the eye for investors and entrepreneurs.
The growth and transformation of Dubai was incomprehensible for anyone trying to analyze it in comparison to other locations like London and Paris, or Hong Kong and Singapore. Such people would comment that its a bubble economy, destined to burst any moment. But the only time the Dubai economy suffered as a whole was 2008, when the entire world suffered due to the crash of the global economy. And, in due course it bounced back.
Dubai’s visionary leadership also made it a tourism destination, putting it on the corporate entertainment world map. Companies started holding their conferences and incentive tours in Dubai.
This generated an industry-enviable hotel occupancy rate. No major brand was left behind. All major hotels opened their properties across the region. Tourism companies began innovation by offering ‘wadi-bashing’, ‘dune-diving’, snorkeling, and many other tourism activities. All this lead to the demand for newer real estate investments.
Are we done yet?
How can we forget the dot-com and media scene?
Dubai Internet City.
Dubai Media City.
Dubai Healthcare City.
Dubai Air Free Zone.
Dubai Knowledge Village.
The list simply goes on and on, and each one is a story on its own.
You can easily spot the regional offices for companies like Microsoft, Oracle, Reuters, CNN, MBC, and many many more.
The Real Estate Scene in Dubai
Much to shock of other regional players, Dubai’s rulers decided to allow non-locals to invest in real estate in Dubai. I remember back then naysayers raising objections that how can someone invest in Dubai real estate when they don’t get any citizenship. But Dubai proved them all wrong. Dubai’s real estate sector created more millionaires then any other sector.
We saw all sorts of bold investments like the Burj Khalifa, world’s tallest building, Dubai Mall, the world’s largest shopping mall, the world’s largest crystal lagoon at District 1 in Mohammed bin Rashid City, The tree-shaped Palm Jumeirah island, and so on.
Dubai won the bid to host World Expo 2020 in 2013. It is estimated that somewhere around 20 to 25 million people are going to attend Dubai Expo 2020, scheduled from 20 October 2020 – 10 April 2021.
This venture entailed construction of new lodging facilities to accommodate the millions of visitors. Construction at breakneck speed started. With the event not even a year away, the pressure is high for the builders to deliver the projects on time.
The demand is pushing the real estate prices upwards.
The excitement, the euphoria is massive.
Once again, some pessimists started prophesizing doom and gloom after April 2021.
But, Dubai is not known for, or used to, of accepting defeat. They always come out bolder, stronger and more confident.
Their investments in emerging technologies like 5G, artificial intelligence, Hyperloop, etc., and commitments into newer ventures a proof positive that the place and the economy is only going forward.
These 20-25 million visitors are not only coming for fun and go home.
Dubai’s mega investments in real estate, infrastructure development and the hosting of the World Expo 2020 is geared towards convincing the visitors to consider Dubai as a potential investment destination. Not just to own a property, but to consider it as a destination for setting up their businesses.
When the event wraps up, the World Expo 2020 district will convert to a new district, that will be served by the 10-billion-dirham new metro line.
Even if just 1%, just one percent of the anticipated twenty five million visitors choose to invest or setup some business interest in Dubai, you are looking at a whopping 250,000.
If you think 1% is too optimistic, lets slash that down further to just 0.1%. Even then you are looking at 25,000 new ventures and investments. I am not talking about the job seekers. Those would be much much higher.
I am talking about the visitors who will drop their anchors in Dubai, and bring the technology, intellectual property, their connections, their business acumen, and their investment dollars.
The word is in the air that immigration and property ownership laws might also get further relaxed. Making Dubai even more attractive to these 25,000 or 250,000 potential investors, ushering the next wave, and opening the next chapter of Dubai’s story.