With the opening of the first phase of the Dubai Tram network today (November 11), the emirate’s first truly community focussed infrastructure project is set to add permanent long term value to residential values in Dubai Marina, a report said.

The network will also set a benchmark for other parts of the city, according to leading international real estate consultants, Cluttons.

The 10.6-km route that takes the Dubai Tram around Dubai Marina and along Al Sufouh road is expected to go a long way in alleviating the chronic traffic issues Dubai Marina and the Jumeirah Beach Residence area have become synonymous with. Crucially, Cluttons believes that through such localised infrastructure investments, the government is adding long term infrastructure premiums to residential values.

“The Dubai Tram marks another milestone in the evolution of Dubai’s infrastructure,” said Faisal Durrani, Cluttons’ international research and business development manager.

“Five years on from when the first Dubai Metro trains took to the tracks, residents are now going to get their first taste of community transport infrastructure. Like elsewhere in the city, residential values in Dubai Marina have been pegged back by government regulation at a local and federal level, yet we still recorded a 4 per cent rise on average between January and August, against 7 per cent for Dubai as a whole,” he added.

“We must however take a longer term view as the Dubai tram is exactly the sort of infrastructure that the Dubai Marina area is likely to benefit from, and over time, this will start to significantly bolster house prices.

“Tenants and buyers are already actively seeking to be in close proximity to the Marina’s Metro stations, The Beach, and Jumeirah Beach Residence. We expect that the Dubai Tram stations dotted around the Marina will similarly drive demand up in their immediate vicinity,” Durrani explained.

Elsewhere in the city, the Dubai Trolley in Downtown Dubai is expected to commence operations in the first week of December and Cluttons expects this to transform connectivity in Downtown Dubai.

Durrani continued: “The Dubai Trolley is another example of how a neighbourhood transportation network will directly impact property values as connectivity and access are improved dramatically, but such localised schemes will only go so far.

“Unlike the vast established public transportation networks of larger cities like London for instance, Dubai still has a long way to go. During the summer, UK building society Nationwide revealed that being located within 250 metres of a Tube Station in Greater London could add as much as 10.5 per cent to the value of your property, which equates to about Dh250,000 ($70,000).  While we are not looking at uplifts as significant as that just yet, there is a rapidly growing appreciation in Dubai of the benefits of being close to a public transportation node.”

The differentiating factor for the emirate is the fact that infrastructure has always played catch up to the explosive urban growth and as a result Dubai is in the unique position of having multiple business districts, stretching from Deira to Sheikh Zayed Road and from Downtown Dubai and the DIFC to Jumeirah Lake Towers.

“The key now to unlocking the true potential of public transport is to stitch together all of Dubai’s communities in a cohesive and sustainable way, which makes getting around easy,” said Durrani.

“There are the obvious challenges of putting infrastructure into established parts of the city, but for somewhere like Downtown Dubai where values have risen by 5 per cent to Dh1,940 per sq ft ($530 per sq ft) this year, excluding the Burj Khalifa, we can easily see transport linked premiums rising exponentially, once all our communities start being linked together.

“While the Dubai Metro transformed access across Dubai, this was an exceptionally successful macro solution to an acute problem, but the challenge now is creating an integrated and accessible world class city that is pedestrian friendly and the benefits to real estate values will follow naturally,” Durrani concluded. – TradeArabia News Service