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The Ins and Outs of Housing Your Service Staff in Abu Dhabi

The Ins and Outs of Housing Your Service Staff in Abu Dhabi

Hiring the staff for even a relatively small business can be a nightmare, but once you have the right people to sign on the dotted line then your headaches really begin: visas, transport, training and where exactly are they going to sleep?

The biggest problem with staff accommodation has always been that to keep transport costs down companies need to house their staff in one or two adjacent locations and within a reasonable distance from your place of business. It also needs to be of a standard and in a location acceptable to your employees to reduce expensive staff turnover. Just going out into the market and hoping to find accommodation for 100 to 300 staff in almost the same place would not be practical, as the chances of finding the required number of units is one building would be slim. The only time you’re likely to get a building or adjacent buildings which have the kind of space in them to house large numbers of staff are if they’re brand new, having issues with occupancy levels or have just been refurbished, and are therefore empty.

For years in Abu Dhabi this seemingly thorny problem was relatively straight-forward. Khalifa City (named after the current Ruler of Abu Dhabi and President of the UAE HH Sheikh Khalifa bin Zayed Al Nahyan) was writ large in the minds of most housing managers. The area is close to the city, has relatively cheap rental prices and new villas are being built there all the time.  These villas – much more than apartment blocks – could be subdivided as much or as little as you like, at a relatively low cost. That gave control over room sizes and allowed companies to put people on similar shift patterns in the same place to minimise transport costs. Entire compounds or groups of compounds were rented out by companies for all their staff.

Sadly the Khalifa City dream is over. The Municipality has designated Khalifa City a family area and is clamping down hard on villas that have been subdivided without the correct permissions. The Municipality has moved most companies out and given ultimatums to all the companies still housing their staff in Khalifa City, telling them they need to move out.

So where to go now? The other option which was always popular was Mohammed Bin Zayed City, also known as MBZ (named after the current Crown Prince of Abu Dhabi HH General Sheikh Mohammed bin Zayed Al Nahyan). This area is located to the south of Abu Dhabi alongside the Mussafah Industrial Zone and is home to a huge amount of low cost housing in a specially designated sector called Mussafah al Shabiya. The difficulty that relocating companies face in this area is a) its distance from Abu Dhabi Island b) the area itself due to the amount of low-cost housing is note particularly desirable, especially for female employees c) there are not many amenities there in terms of entertainment and mall and d) there is a severe shortage of the new or recently refurbished towers, which has been exacerbated by the migration from Khalifa City of all the big companies who were housing their staff there.

Several things are happening in the apartments market that are making coming back to Abu Dhabi Island cost effective again.

There is a specific oversupply of better quality apartments. Abu Dhabi has a recent obsession with lavish housing. Developers haven’t built much cost-conscious housing for the masses in recent times, lately every new development has to be ’boutique’, ‘high-end’, or ‘luxury’. This glut of better housing,  has led to a flight to quality and a consequential stagnation in the cost of lower end and slightly older units. Very little low cost housing has been built recently anywhere in Abu Dhabi as developers have pushed for marquee and signature properties.

Another reason, strangely enough, is parking. The increase in population in Abu Dhabi has meant that free public parking has been all but swallowed up. New building rules require buildings to have their own underground parking but this doesn’t apply to the older buildings that were built with no parking whatsoever. Companies who prove transport for their staff are among the few occupants that don’t need parking. They are bussed to and from work and so can occupy these otherwise almost un-rentable buildings.

The result is that older and lower grade tower blocks, particularly centred around the Tourist Club, Al Hosn/Khalidiya and Muroor have become very affordable for company housing, which also cuts down on transport costs by being close to the place of business facility itself.  The difficulty is still locating one of these buildings in a renovation phase so that it is empty to house the bulk of your staff, or snapping up a newer, higher quality building that is having issues with its occupancy levels.

So what is the best way to get your hands on an empty building for the right price?

  1. Start early: the earlier you can get a good building locked in the better it will be for you. Start negotiating early and have an agreement in place well before you need to move.
  2. Keep more than one option on the horizon: it can take months to get the required Municipality permissions for a new or refurbished building, even once the building has been completely constructed. You don’t want 100 staff in company accommodation for months at your expense so either have a solid Plan B or negotiate with the property owner so that if the permissions are not obtained by the relevant date they will pay to put your staff in alternative, pre-agreed accommodation.
  3. Use someone with experience of the bulk housing market: some estate agencies, like Crompton Partners, focus on the bulk housing market, keep their ears constantly on the ground for new and refurbished buildings and are experienced in negotiating deals with developers, Sheikh’s offices and individual owners.

Abu Dhabi Island is the new home for company staff. Your staff will like being closer to town and it keeps accommodation and transport costs down. Get in early, negotiate hard, keep your options open and use an experienced partner.

Get in touch with us today to discuss your options. Call Wilna on +971 50 8216546

Wilna Jansen Van Vuuren

Special Projects Manager

wilna@cpestateagents.com

Call – +971 50 8216546

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