By Soren Billing
Hundreds of thousands of jobs must be created to fill future supply of commercial real estate.
The UAE needs to create at least 150,000 white-collar jobs to absorb the amount of commercial real estate expected to hit the market in the next two years, Nomura has said.
Dubai and Abu Dhabi need to create at least 100,000 and 50,000 white-collar jobs, respectively, to satisfy future supply of commercial real estate in the two emirates, the investment bank said in a note to investors.
Commercial real estate space in Dubai is expected to increase by 20m sq ft while the Abu Dhabi market could add another 10m sq ft.
In the residential market 65,000 and 15,000 additional units are expected to be completed by the end of 2011.
“This is in an environment where jobs, still real estate and construction related, are being cut,” Nomura analyst Chet Riley said.
“Capital values are stabilizing in Dubai, but growth is not expected until the latter part of 2010.”
Residential rents in Dubai could fall another 10 percent, he said.
“The residual risk has not fully unwound yet, in our view. When the risk does unwind and the financially weak developments are sidelined for good, we will become more positive on the macro real estate fundamentals.”
Consolidation among small developers would take less time if banks withhold financing, he added.
“The banking sector will not move until the current risks have been mitigated adequately, but when it does, we feel we would have passed the current pinch point,” he said.
Nice bit of projection, but it ain't going to happen because most of the jobs were involved in creating the mess.
If UAE expects to expand in the way they want to then hiring enough qualified workers is likely to be a huge ongoing problem. I would strongly suggest making sure there is a big effort made to provide affordable housing for "future" expat workers . If accommodation and basic living costs are too expensive you'll never be able to keep quality workers in the country for long. It will become more of a transient working population which in turn may lower the general standard of service. Finding good qualified staff is not really that difficult, keeping them IS ! The time to think about this is now.
I strongly feel the projected figure of office space will be consumed in coming times, When i landed here in UAE, someone smart had said , DUBAI is a stopover not a destination, from human relations to homes to jobs are transitory by nature in UAE. The wave of redundancies bears testimony to the above fact in some respect,UAE has seen progress to fast to soon, there ought to be balance in progression and stability. I strongly feel laws in UAE should transparent and stable in employment and real estate, only then the highs and lows of economic fluctuations will not create a havoc like it has in recent times.
I wonder how that was worked out? 100, 000 and 50, 000 white-collar jobs eh? Now thats one for the Economists as Supply struggles to create its own demand. I am keenly watching and waiting for these events to unfold.
"Nomura analyst Chet Riley said" - nice jargon but guessing - poor attempt to fill up new space. Can we have some real news!!
Who is going to pay them?
I heard, white-collars are now produced in China and imported over Indian subcontinent... Now everybody just needs to change dress.
Jebel Ali Baba.....Man ! your name does suggest that you live in some small rented shanty in Jebel Ali. Your thoughts and expressions also suggest that you are a rasist. Get a life buddy !