Impact of Expo 2020 Bid Win for Dubai

Property-Times--217013It’s hard to imagine the scale of Expo 2020 and therefore easy to underestimate its impact. It is the third largest event in the world with only the Olympics and the Soccer World Cup being larger however, while the Olympics and World Cup are conducted over a relatively short period of time, the Expo will be conducted over 6 months.

It is estimated that over 270,000 jobs will be created in Dubai with 90% of them in the period 2018 to 2021. The majority of these jobs are expected to be created in the tourism and hospitality sector while 80,000 jobs are expected to be created in the construction industry, the majority of which will be required to build the Expo site itself. Located in Jebel Ali, the Expo site will encompass 438 hectares and will consist almost entirely of hospitality and tourism amenities with at least 180 exhibition pavilions to cater for the 25 million visitors who 20% during the 6 months of the Expo.

The total costs are estimated at $8.8 billion with $7 billion required to develop the city-wide infrastructure, the Expo Area and its surrounding site. The benefits to the UAE economy from infrastructural investment, job growth, and massive increase in tourist revenue are enormous and obvious. Economies grow on the back of investment and investments of this scale are rare as are the resulting benefits in terms attracting more tourist dollars and further embellishing the brand Dubai. For Real Estate, hosting the World Cup is likely to create a boom in the industry. The last city to host a World Expo was Shanghai in 2010. Despite being held during the worst global recession in history, property values grew in excess of 60% in the 12 months before the event was held. While Dubai may not achieve such stellar value growth, the predictable surge in demand for accommodation of all types, from labor camps to apartments to executive Villas, for the additional 270,000 or so new job holders is sure to have a significant effect on values.

In addition, demand for office and commercial space is also likely to increase as existing businesses expand and new business entities set up operations to support the conduct of the event or service the bevy of new business operators or the millions of additional visitors. There is no doubt that the Expo will help re-balance supply and demand in this area. Retail space is likely to be at a premium as visitors will not confine their spending to the Expo site alone. In addition, 25 million visitors require a place to stay and, with Dubai’s hotel industry already enjoying consistently high occupancy rates, more hotels need to be built and serviced. Many of these are already planned as part of Mohammed Bin Rashid city.

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