Dubai’s plans to expand its Metro network and more than double the number of stations could have a significant impact on the development of the emirate, analysts have said.
New business openings could be created and there could be reductions in pollution and congestion – if drivers can be tempted out of their vehicles.
Under the plans – announced as part of a wider economic strategy by the emirate's Executive Council on Sunday – the number of Dubai Metro stations will jump from today’s 55 (plus 11 tram stops) to 96 by 2030, with a further significant increase, to a projected 140 stations, by 2040.
While Dubai is often seen as car-orientated, the Metro expansion aims to help turn the urban area into a 20-minute city, meaning key daily needs, including work and shopping, would be available within a maximum 20 minutes of where a person lives without their having to use a car.
Dr Alexandra Gomes, research fellow at the London School of Economics who has analysed cities in the Gulf, said with the addition of new stations and lines, Dubai could "densify" through "transit-oriented development", a strategy applied successfully in many other cities worldwide.
Densification often goes hand in hand with strengthened public transport networks, because low-density areas tend to be less suitable for public transport.
"To maximise the benefits of this densification, it’s essential to also develop mixed-use development and good walking infrastructure that supports walkability both within the areas surrounding the stations and in the access routes to the Metro stations," she said.
Mixed-use developments, Dr Gomes said, may combine residential, commercial and other uses, contrasting with "monofunctional areas".
On track for progress
The building of new Metro lines and stations in Dubai will create "significant potential business opportunities if the land near the stations is made available for commercial developments", Dr Gomes said.
"Densification increases the demand for goods and services, creating a favourable environment for businesses," she said.
Dr Gomes said the likes of Hong Kong, Singapore and many European cities had grown significantly around their metro and train networks, potentially offering a glimpse into what could happen in Dubai.
"For example, London has recently opened the Elizabeth Line, a high-frequently, high-capacity railway line similar to a metro," she said. "This line not only supports potential new developments but also connects areas that were geographically close, yet distant in terms of travel time, by public transport, which previously encouraged car use."
Another example is Tokyo, where land around metro lines has become much more densely developed and has increased in value.
Even before this week’s announcement, Dubai Metro, which currently has a Red Line with 35 stations, and a Green Line with 20, was set for significant expansion through the construction of the Blue Line, which will add 14 stations and 30km at a cost of Dh18 billion ($4.9 billion).
Peter Schwinger, a transport economics, strategy and planning specialist in Germany who has previously worked in the UAE, said that in the creation of new "centres" – high-density mixed-use developments with workplaces and services in close proximity – was a core component of the Dubai 2040 masterplan.
"The key challenge for Dubai’s Road and Transport Authority (RTA) however, is to align the new metro corridors with those centres," he said.
"In the past, metro lines were often built parallel to urban highways to save cost and time rather than through the [middle] of the development they are supposed to serve."
He gave Dubai Mall Metro Station as the most prominent example, where millions of passengers each year have to walk an extra 10 to 15 minutes to reach their destination using the Metro Link Bridge.
Cutting congestion
One hope that residents may have is that the expansion of Dubai Metro will reduce traffic congestion, potentially making commuting easier for drivers and cutting pollution.
Experience from other cities indicates that improvements in public transport can cut gridlock if other measures incentivise people not to use cars.
For example, in London, the Elizabeth Line, along with the Congestion Charge and the Ultra Low Emissions Zones, have "been instrumental in reducing the number of cars in central London", Dr Gomes said. This has, she added, had a positive effect on pollution levels.
"If the expansion [in Dubai] encourages a significant number of people who previously drove to switch to using the Metro, it could lead to a reduction in the number of cars on the roads, decrease traffic congestion and lower pollution levels," she said.
"However, if the expansion primarily supports new Dubai residents without reducing the number of cars on the roads, the impact on traffic and pollution might be minimal. Nevertheless, it is positive that these new residents might not need a car to move within the city."
Mr Schwinger said that adding lines could cut pollution, although he cautioned that some of the existing lines served new developments in Dubai, so may not have caused public transport to gain a greater market share.
"Dubai has seen a significant rise in public transport usage in recent years that goes beyond the post-Covid rebound in ridership you see elsewhere in urban transport," he said.
"Growing the network certainly has a positive impact on the level of congestion as well as pollution."
Dr David Roberts, a senior lecturer at King’s College London, said Dubai’s continued focus on construction, as indicated by the plans to expand the Metro, tied in with the nature of the city’s political economy – the way that economies are managed by political systems – which is "fundamentally oriented towards building stuff".
He said part of this may be driven by the momentum of a sector made up of companies with access to "comparatively cheap credit".
"It’s a local political economy in the region where there’s a lot of competition from the Kingdom [of Saudi Arabia], from Qatar, from Bahrain," said Dr Roberts, who is an editor of the Elements in Middle East Politics series published by Cambridge University Press.
"Some constant growth is maybe aimed at keeping Dubai’s place as the premier commercial [and] logistical hub.
"I would imagine there will be continual growth in the near future. That’s the guess."
While Dubai has developed a diversified economy and reduced its dependence on hydrocarbons, Dr Roberts said it was "co-dependent" on other major cities in the region, where sometimes a greater proportion of economic activity has been linked to hydrocarbons.
As the world slowly transitions to activities that do not involve hydrocarbons, it made sense for Dubai to continue to grow and develop its other capabilities, Dr Roberts said.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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LA LIGA FIXTURES
Friday Valladolid v Osasuna (Kick-off midnight UAE)
Saturday Valencia v Athletic Bilbao (5pm), Getafe v Sevilla (7.15pm), Huesca v Alaves (9.30pm), Real Madrid v Atletico Madrid (midnight)
Sunday Real Sociedad v Eibar (5pm), Real Betis v Villarreal (7.15pm), Elche v Granada (9.30pm), Barcelona v Levante (midnight)
Monday Celta Vigo v Cadiz (midnight)
Anghami
Started: December 2011
Co-founders: Elie Habib, Eddy Maroun
Based: Beirut and Dubai
Sector: Entertainment
Size: 85 employees
Stage: Series C
Investors: MEVP, du, Mobily, MBC, Samena Capital
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
Company profile
Name: Back to Games and Boardgame Space
Started: Back to Games (2015); Boardgame Space (Mark Azzam became co-founder in 2017)
Founder: Back to Games (Mr Azzam); Boardgame Space (Mr Azzam and Feras Al Bastaki)
Based: Dubai and Abu Dhabi
Industry: Back to Games (retail); Boardgame Space (wholesale and distribution)
Funding: Back to Games: self-funded by Mr Azzam with Dh1.3 million; Mr Azzam invested Dh250,000 in Boardgame Space
Growth: Back to Games: from 300 products in 2015 to 7,000 in 2019; Boardgame Space: from 34 games in 2017 to 3,500 in 2019