Dubai ramps up construction investment and development before Expo 2020

 

Perhaps the key driver of development in Dubai at the moment is Expo 2020, the world’s fair that will take place in the emirate over six months from autumn 2020 through spring 2021. The event, which is the first global exposition to be held in the MENA region, is expected to attract at least 25m visitors. Preparations have been under way for years, both at the primary event site – a 4.38-sq-km plot of land in Dubai South, halfway to Abu Dhabi – and across the emirate more generally.

For the government’s bold plans to come to fruition, a flurry of building activity is expected during the 2018-20 period. The local development, contracting and other construction-related segments are expected to be major beneficiaries of this work. “There is bound to be a boost in activity and optimism in the run-up to Expo 2020,” Craig Plumb, the head of research for the MENA region at property consultancy JLL, told OBG. “It is already happening, in fact. The question is, what will be the long-term impact on Dubai’s economy?”

Building The Future

If the government’s efforts proceed as planned, Expo 2020’s long-term legacy will be broadly positive, and potentially transformative for Dubai’s economy. According to the blueprint for the exposition, the enormous amount of investment that is currently flowing into Expo 2020-related projects is going towards not only the event itself, but to the development of a new economic and cultural centre in the emirate. Dubai South, as this project has been named, is widely considered to represent the emirate’s future. The development priorities in the run-up to the expo reflect this plan. Indeed, major recent updates to transport infrastructure in Dubai South – including to roads, rail links and the expansion of Al Maktoum International Airport – will eventually serve the bulk of Dubai’s growing population, which has been shifting to the south for some time now.

Similarly, plans call for the Expo 2020 site to serve as the cornerstone of a new technology and academic research centre, which is expected to support the development of innovative new industries in Dubai for decades to come. “It is important to recognise that our investment in additional transport infrastructure and the completion of new hotels is all happening in time for 2020, but not just because of the Expo,” Reem Al Hashimy, the minister of state for international cooperation and director-general of the Dubai Expo 2020 Bureau, told local media in mid-2016. “It is part of Dubai’s and the UAE’s continuing development.”

Major Projects

Dubai Expo 2020 Bureau, the government entity charged with carrying out the event, awarded more than 1200 contracts in 2016 alone, worth some Dh2bn ($544.4m) in total. This included deep infrastructure work for the event site itself, including irrigation and sewerage, pipes and cabling, roads, electrical and water networks, and ducting for telecommunications hardware. The site is expected to host 300,000 people per day during the event.

The pace of investment picked up in 2017. As of the end of November, Dh10.8bn ($2.9bn) in construction contracts for nearly 50 projects and Dh411m ($111.9m) in non-construction contracts for around 100 projects had been awarded – over half to small and medium-sized enterprises. As of August 2017 Expo 2020 construction work was reportedly on track to be completed a full year before the scheduled launch date of the event, in October 2020. “We are committed to working with leading businesses from across the world in order to deliver an exceptional event of this scale, on time and on budget,” Al Hashimy said in January 2017.

A significant number of private development projects have coordinated their building efforts to match the Expo timeline to participate in and contribute to the opportunities surrounding the event. Major new real estate developments set to launch in conjunction with the Expo include the District One neighbourhood at the $10bn Mohammed Bin Rashid Al Maktoum City; the $545m Dubai Water Canal Project; the $3bn Al Habtoor City project; and Dubai Creek Harbour.

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The Report: Dubai 2018

Construction & Real Estate chapter from The Report: Dubai 2018

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