Tuesday, August 30, 2011

Properties adjacent Metro stations draw higher rentals

The Dubai Metro station is gaining prominence and is more of a priority for tenants now, commanding 10 to 20 percent more rentals, said the latest report by Asteco, leading real estate services Company in UAE.

With growing numbers of offices and apartment buildings in Dubai, the rates for property leasing are based on a new market dynamics, the report points out.

According to Asteco CEO, Elaine Jones, the rental disparity is more pronounced now, than ever before, with Dubai Metro adding new dynamics to the market.

There have already been sufficient evidences from international markets about a constant growth in values for markets located adjacent to stations with metro lines. For instance, HotProperty.co.uk reported that homes in Central London, locate within five minutes of walking distance of a tube station, are nearly 21percent more expensive than those of similar properties further away. However, the prices do not grow until the stations are officially operational.

In Dubai, leasing prices for a double bedroom apartment locates within walking distance from Mall of Emirates Metro Station is between Dh.60,000 to Dh.65,000 per annum, in comparison to the value of Dh.50,000 to Dh.55,000 for properties situated a few kilometres away from the station.

Similar trend is seen in the case of more upmarket properties with double bedroom apartments near Emirates Towers Metro Stations and DIFC costing anywhere between Dh.110,000 to Dh.130,000 per annum, while properties further away costs Dh.90,000 to Dh.100,000 a year.

A property in Deira will now draw an annual rental of Dh.50,000, while similar property away can be leased for Dh.40,000. This indicates market maturity, Jones said.

The Dubai Metro Green Line will be unveiled on 9th September, and it will have an additional 18 stations, stretching 23kilometers, covering some of the busiest tourist segments along the creek, including business districts, residential areas and ministry offices.

In general, real estate prices are not solely dependent on its geographical location anymore. All properties in Deira or Bur Dubai with immediate access to a metro station can attract similar rates as that of a property in Jumeirah Lake Tower or Business Bay without a metro access, the report pointed out.

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