As consolidation continues in the office property market throughout the UAE, the interior contracting and fitout market has become increasingly competitive. This, in turn, has resulted in lower turnaround times for decision making, as SMEs in particular become increasingly price conscious.

This has meant that vendors have had to become creative in offering solutions, not only from a space utilisation perspective, but also one in which the technology that is embedded allows for sufficient flexibility. Especially as companies have to get serious about attracting millennials into the marketplace and as start-ups get more prolific in the country.

The overall theme, however, continues to remain one of cost consciousness, especially as the supply chain costs have increased since the imposition of VAT.

Estimates on the size of the interior contracting industry for the region range between $8 billion (Dh29.3 billion) to $10 billion in 2017, depending on a variety of sources. With Dubai long being the beacon in the region, especially in the run up to Expo 2020, there has been an increasing amount of focus in the city.

Spike in interior contraction jobs

SME firms are using every opportunity to maximise utilisation of existing office space rather than expand into larger areas, which was the norm until 2014. Across the city, we have seen demand for retrofit and interior contracting jobs spike, especially in some of the older areas. There has been greater room to maximise efficiency of space as well as adopt newer technologies by way of appliances and thermostats that maximise energy efficiency.

Not surprisingly, given the nature of the economy — and the fast pace of technological change — one of the most frequent responses by SMEs has been to postpone the use of any technological gadgetry, especially as there is a high probability of obsolescence in the short to medium term. And given the rapid amount of experimentation that is taking place in this area.

This is curious and reflects a mindset whereby insufficient information has permeated the marketplace. After all, similar concerns of obsolescence had not hindered the widespread adoption of the smartphone or the tablet market in the past.

That has been, in large part, due to the different nature of the marketplace — consumer vs enterprises — where decision-making is more impulsive or desire-oriented rather than committee-based.

From an industry perspective, what is apparent is that there is considerable overlap between the interior fitout contractors, the smart home vendors, and consultants operating in this space. Furthermore, here seems to be a blurring of lines between the residential and the enterprise space as well, as the theme of cost consciousness has ricocheted backwards into the industry.

Increasingly, collaborative efforts are being employed as delayed payments and longer time frame on decisions spark a consolidation among the smaller players.

Size estimates

In point of fact, even in the new-builds, we are witnessing more of the extended enterprise model, as contractors, consultants, value engineers and material vendors clamour for contracts that lead to more innovative enterprise solutions for the customer.

This implies that the size estimates of the industry are vastly understated. Even as companies consolidate in order to lower costs for the consumer, the market size will continue to expand, and the theme of costs will drive decisions over the next few years.

From a macro perspective, it is clear that government initiatives — such as smart meters, instantaneous electronic home surveillance, etc — will drive change in the residential space. Smaller players have a role to contribute in this area by collaborating with the other stakeholders. Whether the job is a new build or a retrofit, it will remain ineffective and incomplete unless it incorporates the technological aspects that maximise energy efficiency. This regardless of whatever the concerns be of obsolescence.

That, more than any other dynamic, is the clarion call over the coming years.

— The writer is Director at Unitas.