Developers must support start-ups, says Core UAE
Developers must take steps to support Dubai’s SMEs as well as international corporations, according to Core, UAE associate of Savills
Developers must take steps to support small- and medium-sized enterprises (SMEs) as well as international corporations.
This is the message from Core, UAE associate of Savills, which noted that the start-up sector is expected to represent 70% of Dubai’s non-oil gross domestic product (GDP) by 2021.
Start-ups and SMEs account for 95% of all companies in Dubai. The segment employs 86% of the workforce and is currently contributing approximately 60% of the Emirate’s non-oil GDP, according to Core UAE.
The latest report published by the real estate firm, In Focus: Start-Up Environment in Dubai, found the Emirate to be 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.
Commenting on the findings, David Godchaux, chief executive officer of Core UAE, said: “With 350,000-plus companies under the SME category in the UAE, developers and 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 onshore locations, and technology- and 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 preferred choices for SMEs and start-ups looking to set up initial bases,” he added.
The UAE 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 $82m (AED300m) science and technology fund.
The UAE National Charter 2021 is also seeking to turn the country into a global hub for entrepreneurs.
However, according to Core UAE, there is still room for improvement. The company’s report identified a number of key points to be addressed, including the challenges related to starting businesses in Dubai; hiring, developing and retaining talent; attracting the target audience and achieving critical mass; and maintaining low real estate and operating costs while remaining open to expansion opportunities.
Godchaux said that recent news that the UAE Banks Federation has agreed to adopt proposals intended to provide breathing space for loan repayments of SMEs will provide respite for smaller companies.
He concluded: “The response from government bodies, developers, and 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.”