Dubai’s history of large-scale development projects is well-documented; however, the emergence of Master Planned Communities (MPCs) is arguably pushing Real Estate in Dubai to an unprecedented scale. Unlike simply being groups of buildings, MPCs are multi-faceted environments that integrate multiple aspects of living – such as Residential, Commercial and Lifestyle – together. Green Parks and Schools, Retail Hubs and Wellness Centers etc., are all strategically integrated into these spaces to ensure a high quality of life over time.
How Master Planned Communities Are Shaping Real Estate in Dubai
This new way of thinking about buying or investing in property in Dubai has altered buyer and investor perception of what defines real estate in Dubai. While traditionally buyers/Investors have been interested in the purchase of individual units of property; increasing numbers of buyers/investors are now viewing large-scale developments as complete ecosystems, offering residents/lifestyle seekers access to convenience, connectivity, and lifestyle value. The development of communities such as Dubai Hills Estate and Tilal Al Ghaf represent an example of how the use of a community-based planning model, as opposed to one focused solely on building unit-level efficiency; creates enhanced benefits for everyday life of each resident/unit owner and also contributes to long-term sustainability and potential appreciation/value of individual units within the community.
The Appeal of Integrated Living Environments
The desire for convenience has been one of the major reasons why there have been so many new developments in master-planned communities. Today’s residents are looking for much more than just their own home. In addition to a place to live, they want easy access to education, health care, shopping, and recreational activities that do not require an extended commute. These changing needs are beginning to influence the way that developers in real estate in Dubai design and market their properties.
In this regard, for instance, when families move into communities such as Arabian Ranches or Damac Hills, they can take advantage of nearby schools, supermarkets, and parks which provide them with easy access to these amenities and therefore reduce “friction” (the time spent on daily tasks) and create a better balance in life. For working professionals, communities featuring co-working spaces along with public transportation routes will likely be viewed similarly.
The integration of all of these different components also provides a sense of community among its residents. When compared to other housing alternatives where each tower may house thousands of residents who never see each other, residents in master-planned communities develop a stronger sense of community because it is a more “neighborhood” driven model. As a result, this type of community-focused development is increasingly being seen as a marketing tool by the developers in the real estate in Dubai and particularly for those seeking to attract long-term owners rather than short-term renters/investors.
Infrastructure and Planning Driving Value in the Real Estate in Dubai
Infrastructure has significant influence on the performance of any property. Communities that have been master planned for long term growth out perform other developments because infrastructure is designed to support growth (i.e., roads, transportation and utilities).
The design for the future will also be able to positively impact your real estate in Dubai through easier access to properties within the community and less traffic congestion. For example, a developer may locate their development near a highway (Sheikh Mohammed Bin Zayed Road or Al Khail Road) so it would be easy to drive to work.
Developers are now including technology into the design of new developments; this includes using sustainable building practices, energy efficient designs, and developing green space within the community. With many investors being environmentally conscious, property values remain strong and demand continues to increase.
Investment Potential in Master-Planned Developments
Master Planned Communities are very appealing from an Investor’s perspective as Master-Planned Communities provide a level of Consistency throughout each community which includes Design Standards, Amenities & Maintenance Standards.
This level of Consistency protects Property Values & provides Investors with a higher level of protection against Risks that may be present due to a lack of planning (i.e. fragmented Developments).
In addition to protecting property values & reducing risks, Rental Demand is also an important aspect for Real Estate Investors. In many cases, tenants will pay a Premium to Rent in well-planned communities due to the Lifestyle Benefits they receive.
This increase in Rental Yield increases the attractiveness of Real Estate in Dubai within Master Planned Communities for Income-Focused Investors.
Lifestyle-Centric Design Changing Buyer Expectations
The way people view luxury has changed. While master planned neighborhoods were previously defined simply by the quality of the neighborhood (e.g. schools, parks) and the price point, they are now also defined by the experience of living within that community. As a result, many neighborhoods are providing for residents the ability to have a “lifestyle” experience while living there. For instance, the new development of Blue Waters Island will be a mixed-use project that provides both residential units and various forms of entertainment, shopping and dining. In addition to being located near Dubai Marina and Palm Jumeirah, the project will provide a variety of recreational activities including a beach, pool, restaurant and bar.
Strategic Insights from the Experts
We have examined the impact of Master Planned Communities (MPCs) as they relate to market behavior through Keyspace Realty and Keyspace Dubai by tracking transaction volume/transaction trend, rental performance, and new construction/infrastructure development within MPCs in order to determine what is working for a particular community. The insight will assist the investor in understanding not only “where” to invest their capital, but also “how” those areas develop over time. We provide a solution that ties real world data patterns to client needs using real world data versus generalized or surface level metrics.
Frequently Asked Questions
What makes master-planned communities different from traditional developments?
Master planned communities were created to be full service communities that have housing, shopping, restaurants and recreation integrated into one location from day one. In contrast, most developments take place over time and there is no overall long term strategy for how development will unfold.
Are master-planned communities a good investment in Dubai?
While we can’t predict future market conditions, historically they offer stable returns due to consistently high demand, high quality infrastructure and clean and well maintained neighborhoods. All of this supports both rental income and long term appreciation.
Do these communities attract end-users or investors?
They attract both. Families and working professionals like them because of the lifestyles offered by the community; investors appreciate the rental yield and/or long term appreciation.
Which areas in Dubai are known for master-planned communities?
Some popular ones are: Dubai Hills Estate, Arabian Ranches, Damac Hills, Dubai Creek Harbour. Each has its own combination of lifestyle and investment options.
Is sustainability a focus in new developments?
Yes. Many of the newer developments have incorporated sustainable design principles such as green building, energy conservation and abundant public open space. The interest in sustainability is growing globally and it adds an additional layer of attractiveness to your real estate in Dubai.
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