Realty sector shake-up feared

Dubai: The cascading effect of the financial crisis is forcing leading property groups in the UAE to consider looking at their staffing policies.

Experts in the real estate sector have also hinted that major projects planned might experience a slowdown, the reason being a lack of finance from banks for the completion of these projects.

In addition to that, speculative investors,who did not have steady incomes to pay the monthly instalments but wanted to make quick gains from the property market are facing payment defaults due to the global downturn. Under these circumstances developers will also not be in a position to fulfil their commitments due to the liquidity crunch.

An Emaar spokesperson said: "Emaar Properties, as a public joint stock company, is committed to enhancing our long-term profitability to add value to our stakeholders.

"With a significant presence in 18 global markets, Emaar has demonstrated 'smart resilience' to the global financial crisis.

"However, to address the new challenges that we face, it is important to reorient our growth strategies and align our business model to tackle new realities.

"While Emaar continues to be one of the largest employment providers and has been instrumental in creating several hundred new job opportunities - directly and indirectly - it is now crucial that we use efficiency and maximise productivity, which includes revisiting our recruitment policies, and optimising human resources.

"Emaar will pursue a recruitment strategy which will be suited to the market conditions and in line with the best interests of the company in the long term.

Damac Group was the first to announce that 200 jobs will be retrenched.

Rumours dismissed

Pundits have aired fears that the current slowdown in the real estate sector could just be the tip of the iceberg.

A lot of developers are also adopting a wait-and-watch approach before making a final approach to retrench their staff, hoping that there will be some kind of government investment mortgage vehicle to bail them out.

A market expert who did not want to be named said: "In the longer term the slowdown will prove to be good for the market because unqualified people who have been engaging in marketing properties will be forced to look for jobs elsewhere. As a result the market will be streamlined."

A Dubai Properties Group spokesperson said: "There is no truth to rumours about employee layoffs at DPG. Dubai Properties Group has robust business plans for the year 2008-09."

Nakheel also denied it has plans to make any staff redundant. A spokesperson said: "Nakheel has not made any of its staff redundant, nor has it put a freeze on recruitment. However, given the current global economic climate we are naturally being prudent and looking at the best quality and quantity of resourcing across the entire company. This is a responsible approach in line with Nakheel's business model."