GCC stadium projects have multifaceted impact on real estate

September 13, 2024, 11:47 AM

Rents in the area surrounding Abu Dhabi's Hazza Bin Zayed Stadium are around 20 to 30% higher than in nearby neighbourhoods

Higher property values in neighbourhood hotspots
Numerous projects across the region
Positives ‘significantly outweigh’ negatives

Entertainment and sports-focused construction across the Gulf is most likely to push property prices up despite bringing more traffic and noise, according to industry observers.

A few of the region’s many projects include the 47,000-spectator Aramco stadium in Saudi Arabia’s Al Khobar, large amusement parks in Qatar and Kuwait, and the region’s inaugural ballpark on the outskirts of Dubai.

According to Dmitriy Starovoitov, founder of Almal Real Estate Development, these developments bring better infrastructure and amenities to surrounding communities.

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Starovoitov says this increases their appeal for both prospective residents and investors – and therefore drives real estate prices higher.

“While concerns about traffic and crowding on event days exist, the overall uplift in the area’s appeal typically outweighs these downsides,” he says.

“In the UAE and across the region, we’ve seen that proximity to such venues can position a neighbourhood as a hotspot, with prices reflecting that desirability”.

In Ras Al Khaimah, plans by Las Vegas-based Wynn Resorts for a 1,500-room new property that is expected to open in early 2027 and ultimately include the nation’s first casino have already prompted a development rush and put significant upward pressure on property prices.

Hazza Bin Zayed Stadium, built in Abu Dhabi’s Al Ain in 2014, is a prime example of how development of this kind can successfully mitigate traffic and environmental challenges and generate economic benefits for the larger area.

The facility created jobs during its construction and subsequent operation, and continues to host major football tournaments that bring in consumers and their spending. It also anchored a masterplan that encompassed new high-quality housing, shops, offices, restaurants and a hotel.

“Residential and retail units around the stadium command higher rental rates, with apartments renting for 20 to 30 percent more compared to similar units in the Al Jimi district, according to available data,” says Siraj Ahmed, a partner at Cavendish Maxwell.

Bahrain event tourism — An artist’s impression of Bahrain’s planned Sakhir Sports City, which will have a multi-purpose hall, international-standard football fields and athletics tracks

In Bahrain authorities are going ahead with the development of the $266 million Sakhir Sports City near the country’s Formula 1 circuit. The project is part of a larger push to increase the nation’s attractiveness for tourists and revitalise a struggling real estate sector.

According to Lewis Allsopp, chairman of Allsopp & Allsopp, generally the “positives significantly outweigh the negatives”.

“The impact of a new complex depends on its location and the type of events it hosts,” he says.

“A well-planned development with good transport links will likely have a more positive effect than one in an already congested area, while a concert venue may raise noise levels more than a theatre or exhibition centre.”