UAE sees interesting new trends in workspace regulations

Ben Scott is Director, Property Management & Transactional Services at Colliers MEA. Ben manages the Property Management Department including all tenant and contractor liaison, regulatory compliance, dispute resolution, policy/procedure creation and implementation, as well advising on asset improvements including energy efficiency & profit maximization.

International occupiers that put real estate decisions on hold in 2020 are now revaluating their real estate needs in line with updated hybrid working practices and operational requirements

  
High angle view of creative business people working at desk in coworking space. Image used for illustrative purpose.

High angle view of creative business people working at desk in coworking space. Image used for illustrative purpose.

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As corporate occupiers around the world adjust to the new normal, an interesting trend is developing across the UAE. International occupiers that put real estate decisions on hold in 2020 are now revaluating their real estate needs, assessing their real estate requirements and beginning to ‘right size’ their office space in line with updated hybrid working practices and operational requirements. This analysis and transformation are taking place on a global scale, with multinational companies integrating new policies into their daily routine.

The temporary work from home policies introduced as a result of the COVID-19 pandemic, are now giving way to long-term, formal hybrid working strategies, to outlast the pandemic and guide them in future planning, both in terms of the operational needs of the business to the real estate footprint that they occupy.

In the UAE, the amount of office space taken by the large international occupiers has not declined by as much as in other parts of the world, an interesting trend that has come about because of the visa quotas within the country, that are not prevalent in other jurisdictions.

The current regulatory system within the free zones defines a specific allocation of visas per office, based upon a specified ratio within that free zone, and is generally in the region of one visa per 80-108 square feet of space taken. These ratios are unique to the region, as a consequence of the largely expatriate workforce that is not seen across Europe, the US and Asia, and so present a unique and regional operational consideration.

The UAE Authorities are cognisant of this difference, and their introduction of a remote working visa in 2020 provided a much-needed boost to both the hospitality market, but also the business community as employees from other jurisdictions could use the UAE as a temporary base during lockdowns in other parts of the world – while remaining compliant with local regulations.

We are currently dealing with several high-profile international companies who as a result of newly implemented Work from home strategies could reduce their footprint by between 25 percent and 45 percent, yet as a result of the visa regulations in force, are continuing with the same space to accommodate the required workforce.

We are however seeing a shift and easing of these regulations. As always the UAE authorities and free zones have been extremely quick to identify and look to provide remedies and updated policies. This regulatory evolution has been key to establish the UAE as a major global business destination, attracting major international firms to establish significant presence within the country.

Special considerations for companies in sectors such as Media, Technology and Consultancy that have greater degree of flexibility have already been in place, however we are now seeing this extend to other sectors, ones that have traditionally been more office based such a Financial Services, Legal & FMCG. From discussions with various authorities, we are seeing visa ratios being reduced by up to 25 percent, a significant shift and a move that will allow the business community to evolve their office space in line with working policies.

As a result of this easing, occupiers are able to look at their space in line with their working models, and allow them to become more efficient in their use of space, and implement strategies such as hot-desking, work from home and increased technology to streamline operational expenses, and align to global policies.

Over the coming years we expect the UAE Authorities to further strengthen the regulations, and adapt with the changing times supporting the business community, showing once again the forward thinking and adaptive nature of the UAE

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