Developers must support Dubai’s start-ups, report says
Developers must take into consideration the needs of small and medium sized enterprises (SMEs), not only large international corporate companies, as the start-up sector is expected to represent 70% of Dubai’s non-oil GDP by 2021, according to a new report.
Start-ups and SMEs make up 95% of all firms in Dubai, accounting for 86% of the workforce and currently contributing around 60% to the non-oil GDP generated in the Emirate’s economy.
Core, UAE associate of Savills, says Dubai is one of the most welcoming places in the world for start-up businesses, with a wide selection of free zones and onshore locations offering competitive rents.
CEO David Godchaux said: “With 350,000+ companies under the SME category in the UAE, developers/landlords are increasingly addressing the demand from a growing SME market segment, in addition to maintaining a portfolio suitable for corporates.
“This trend is gaining traction in secondary on shore locations and technology/commodity-themed free zones, with landlords subdividing floor plates and offering partially fitted out options for faster movement in stock. These competitive locations continue to be the preferred choices for SMEs and start-ups looking to set up initial bases.”
The government has identified start-ups as a key growth parameter in its Vision 2021 Development Plan through positive directives such as the recent announcement of an $82 billion science and technology fund, designed to catapult the country up the ranks of competitive knowledge economies. While the UAE National Charter 2021 is seeking to turn the UAE into a global entrepreneur hub.
However, according to the report, there is still room for improvement with key issues over initially starting up in the Emirate; hiring, developing and retaining top talent; attracting the target audience and achieving critical mass; and maintaining low real estate and operating costs while keeping the door open for expansion.
The recent news of UAE Banks Federation agreeing to adopt proposals intended to provide breathing space for loan repayments of SMEs comes as a respite for existing companies.
Godchaux adds: “The response from government bodies and developers/landlords to start-ups and SME demand, for Dubai to continue as a strong contender amidst global cities to attract and retain world class talent and nurture ideas throughout their growth curve into established businesses with worldwide influence, will play a significant role in shaping Dubai’s office market in the next five years.”
