Landlords get attuned to customer needs

As property markets change, we see landlords becoming more attuned to customer requirements, and developers showing an increasing interest in what to build, rather than in just building.

For quite some time, there has been a large gap in the market for properties with low to moderate rents.

On a daily basis we hear the same complaints regarding the shortage of apartments under Dh40,000, or villas under Dh100,000.

It is quite understandable that not everyone is able afford to live in so-called luxury accommodation, as salaries and circumstances vary.

Over the past decade we have seen the development of more and more high-end commercial and residential space in all areas of Dubai.

This has in effect, reduced the market share for the large numbers of landlords who appear to be solely focused in developing high-end real estate.

If an investor has built buildings to satisfy only those who can afford annual rents of Dh50,000 for a one-bedroom apartment, then a huge area of the market has been ignored.

The same is true for all areas of the property market. If the owner of a small business wants to rent 1,000 square feet of office space, he does not necessarily have the same budget as a multinational corporation, nor does he need the same facilities.

Unfortunately with the present situation, his choices are much the same as for the corporation. As the property supply increases, the owner is forced to rent the same property for less, thus decreasing his returns.

Since the construction industry has been operating at capacity for many years, we are now slowly seeing the supply of property increasing and the landlords having to negotiate, rather than dictate. If there were a broader range of rents to satisfy the market, we would see more activity in rentals and a more stable return for the owner.

We hear daily, that the high rents are one of the major contributing factors to the increased cost of living. In order to meet market demands and make available a variety of properties, the land must be available at a reasonable cost.

One cannot expect to find a one-bedroom apartment on Sheikh Zayed Road for Dh25,000 per annum and the cost of land in Jumeirah will not allow villas to be built for annual rents of Dh80,000. For the same reason, a retailer cannot expect to rent in the City Centre or Bur Juman for Dh90 per square foot.

This is entirely unrealistic and if that would become possible, then we would all be in trouble. However, there is a way for a range of property to be available, at prices for everyone within a strong economy, but it takes planning.

How many buildings in Dubai were built based on a few questions posed to the architect or contractor, or perhaps a friend who has a building of his own? If someone asked me how to build something, I would suggest he see an architect.

When it comes to the question of what to build, I would ask those who are dealing with the end user. More frequently than ever, we are being approached with requests of what to build; something that happened only on rare occasions in the past.

Perhaps, it is the beginning of a more sophisticated real estate market. Even though we have some magnificent buildings, there is no question that we are lacking a spread of properties catering to a broad range of people, which would better meet the demand in the market at this time.

The author is the managing director of Dubai-based Better Homes LLC. Your views and questions can be sent to Gulf News, PO Box 6519, Dubai. Fax: 3441627. E-mail - editorial@gulf-news.com