(MENAFN- Khaleej Times) Over 65000 units will be required over the next three years to accommodate the increasing population of labourers alone in Dubai.
Dubai — Chestertons has stated that the staff accommodation market particularly in Dubai has recorded significant increase in demand as construction activity across the emirate soars.
The construction sector has been the main demand driver for labour accommodation in Dubai; it is estimated that more than 14000 buildings are currently under construction in the emirate of Dubai. As a result the staff accommodation has witnessed increased demand as investors are closely following this trend and are developing more projects to cater to this soaring demand. Over 65000 units will be required over the next three years to accommodate the increasing population of labourers alone. Due to this increase in demand average rental rates for labor camps have seen significant appreciation over the past few years. Average rental rates per labour camp bed have also doubled from about Dh200 per person per month in 2009 to Dh450 per person per month in 2014.
Simon Gray managing director Chestertons Mena said: “The staff accommodation segment has traditionally been ignored by mainstream developers; however as the market matures and demand for luxury property wanes staff accommodation could be the answer to generate sustainable long-term leasing income. Continuous growth in manpower intensive sector such as hotel and retail has also led to shortage of executive staff accommodation at affordable costs to the firms.”
“Unceasing fluctuations in rents have forced most manpower intensive companies to look for long-term housing contracts or owning the properties rather than paying house rent allowance. Long-term contracts help companies to secure rents at lower than market rate and improve predictability of cash flows. Mobilisation is another key benefit of keeping staff around one place rather than different areas of the city. As a result existing executive accommodation properties in Dubai have recorded high occupancy rates” he added. Dubai currently has 90000 hotel rooms and expects to add another 20000 rooms by 2016. As per government estimates nearly 20 per cent of the population is employed in retail and hospitality sectors.
“Buyers of staff accommodation typically include companies from hospitality retail and facilities management sector. Most of the housing facilities for this segment are located in secondary areas such as Dubailand Sports City and Dubai Silicon Oasis” said Robin Teh country manager director valuations and advisory at Chestertons Mena.
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