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There is never a dearth of real estate investment opportunities in Dubai. When some sectors are underperforming, other parallel segments are catching up without making much noise. One of them is the staff accommodation segment.
Staff housing, whether labour camp or executive staff accommodation, is required by mid to large companies.
Get the various options for staff accommodation in UAE
Labour camps are generally equipped with modern facilities and amenities as approved by government authorities.
The authorities also make sure that these meet sufficient firefighting and safety standards. Periodic checks are conducted so as not to compromise on the occupants’ safety.
These elements create confidence among investors.
The traditional pockets for labour camp projects are Al Quoz, Jebel Ali Industrial Area, Sonapur and Al Aweer, while Dubai Investments Park (DIP) and Dubai Industrial City, among others, are the new communities offering staff housing.
Majority of the labour camp rooms can accommodate four to six persons. The plots of land (mainly available in the secondary market) where these accommodations are built are mainly leasehold, with terms that vary from one, 10 to 50 years.
The camp rents are usually offered on a collective basis by the landlord. These cover room rent and utility charges such as water, electricity, gas and sewerage.
In today’s market, the monthly rents start from Dh3,200 to Dh3,800 for four-person rooms and Dh4,000 to Dh4,800 for six-person rooms, depending on the location/community and age of the camp, among others. The lowest rents are found in locations like Sonapur while DIP, equipped with new facilities, commands a higher price.
Some landlords prefer a net income from the property rent only, with the tenant bearing the utility charges which range from Dh700 to Dh900 per room per month. In most cases where the sewerage is not connected to the DEWA drainage systems, waste management is done with assistance of sewerage trucks.
The contracts are renewed on an annual basis and are registered at Ejari. The payment mode comes in one to four cheques per annum. There are taxes applicable for the tenant, depending on the community.
In Al Quoz and the Jebel Ali Industrial Area, the tax is currently 20 per cent against the annual rent; in DIP, 15 per cent. These are paid one time at the start of the contract period and are purely borne by the tenant.
Meanwhile, executive staff accommodations are for those in the hospitality, healthcare and service industries. Their living standards are much higher and have more vibrant amenities to entertain the staff such as a pool, gymnasium and sports facilities. The availability of this type of housing is currently scarcer in the market.
With the number of hospitality and leisure projects being constructed in the run-up to the Expo 2020, there is definitely a shortage of this type of housing to cater to executive employees.
Watch: How Dubai Expo 2020 site will look like
Current executive accommodation rates start from Dh4,600 to Dh5,500 per month.
They are utilised by general staff to supervisors. The rooms are usually occupied by one or two persons.
Unlike the construction industry that is activity based, hotels and establishments in the service industry, once built, require their staff to stay longer, which means they need to be provided with accommodation. Thus, it makes sense to build more of these in the near future.
Source: Parvees A. Gafur, Special to Properties
CEO, Propsquare Real Estate