Win-Win for Investor and Tenant
The tenant`s rationale behind the deal is that housing costs account for at least 40% of an employee`s total remuneration package in Dubai today.
With the elevated volatility witnessed in Dubai and rents soaring during upward cycles, this either forces employers to considerably increase their accommodation expenditures (and thus total remuneration packages) or else accept highly negative consequences with respect to staff fluctuation and therefore their business.
Dubai`s Market for Build-to-Suit Property
At the same time, there are other economic segments that are similarly as labour intensive as they are thriving – think in terms of transport (airlines), education (universities and schools) and retail – to name but a few.
That said, it speaks for itself and a constantly growing demand that the price for staff accommodation has increased by about 130% between 2009 and 2014 and is still on the rise to date.
While the presented strategy offers considerable attainable returns, the related risks can be effectively contained if the undertaking is well implemented – potentially offering the best of both worlds.