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With a healthy year-on-year growth in the student population pursuing higher education here, the UAE is marching closer towards its vision of a knowledge-based economy. Dubai in particular has exclusive purpose-built zones such as Dubai International Academic City and Knowledge Village that house institutions from all around the world to cater to the demands for higher education in the region. The progressive rise in the student population also commands easy and hassle-free availability of affordable housing facilities. Property Weekly investigates how accommodation needs are addressed in the emirate.
Raymi van der Spek, Chief Operating Officer of Eikon International Holding, which operates in association with Heriot-Watt University Dubai campus, says, "Roughly 20 per cent of the student population from the institutions I have had experiences with would seek accommodation provided by the institution. These students are not necessarily coming from abroad, as even UAE resident students sometimes seek university accommodation in order to be able to reside close to the campus. Most of these requirements are provided by the institution either through off-campus or on-campus facilities."
Heriot-Watt Dubai offers on-campus accommodation on a twin-sharing or single-occupancy basis. Accommodation is segregated into women and male residences. Van der Spek adds, "' think that will be the case with resident facilities of most institution. There are institutions that hire their own apartments to use as student accommodation and rent these to students on a sharing basis."
Universities also opt to rent bulk apartments in private residential areas to relet to students on sharing basis, says Sunil Saraf, Managing Director of Tanjay Real Estate. “In such a scenario, it's the university that takes up the responsibility of coordination, supervision and sanitising entry and exit since as per the law of the country the genders cannot be mixed in sharing accommodation,'' he says.
These added administration, supervision and logistics requirements normally make the university-provided apartment facility more expensive compared to what's available in the market. Again, the units demanded by these universities are generally studios and one-beds at close proximity to their campuses and many times they also demand furnished apartments. However, most times it becomes difficult to search for their exact requirements, an example being the Canadian University of Dubai located behind Shaikh Zayed Road; despite all our efforts to find them close accommodation facilities, we were only able to give them 30 non-furnished apartments in Discovery Gardens."
Students renting a property should consider the university campus first, advises Jodie Louise Smith, Director of JLS Properties, since this will encourage the ultimate studying experience with maximum output. However, there are options to have accommodation off the university grounds as well, she says.
When the university doesn't have accommodation facilities or has insufficient housing, or a student sees a price advantage in the market, they opt to look for accommodation themselves in locations close to their universities, says Saraf. "Normally it isn't all that easy, especially when a one-bed is rented it is obvious that the apartment needs to be shared. With Dubai not legally encouraging the concept of students sharing accommodation, the renting process becomes more complex as not many people are keen to give housing to tenants who will share an apartment. Also, it is very important for students who are sharing the property to be very clear with the owner that they are two students living in the rented apartment together."
As students need to spend three years at university with their full focus on their studies, choosing to live alone can bring its own set of problems, such as having to deal with transportation, landlords, agents and others, leading to a wastage of time and effort on unessential things, adds Saraf. "When it comes to real estate agents, the industry itself is not evolved enough to understand the unique needs of students – such as the fact that ideally they should be placed in a quiet building, as noisy neighbours can become a problem when they want to focus and study. This is another reason student housing should be encouraged, because students of the same age and thoughts reside together and become more creative."
In Dubai, any student can enter into a tenancy contract. Tracy Pullock, Senior Associate at Taylor Wessing, says for this a student should be 21 years old or older, and have a valid UAE residence visa. The student should also ensure that he/she undertakes proper due diligence before entering into a contract and especially before handing over any form of payment.
"Due diligence in this instance includes ascertaining who the owner of the property is, ensuring that security deposits and rental amounts are paid either directly to the landlord or to the landlord's legally authorized representative. Students are usually young and less experienced when it comes to entering into contracts and dealing with money and as such they should be particularly careful to ensure that they are not being taken advantage of."
Another important thing to consider is the cost involved in renting private housing, Pullock says that would generally include one-off agent commissions when the apartment is rented, the annual rental payment, a one-off security deposit, housing fees (in Dubai 5 per cent of the annual rental amount, which is charged monthly as part of the Dewa bill) and all utilities such as electricity, water telephone, television and internet, and district cooling.
Rise in rents
The key issue with student accommodation is the price, says Van der Spek. "Back in 2007, when there was high demand and low supply, the prices for rental and the amount of accommodation available made it difficult for universities to provide reasonable student accommodation at reasonable prices. In many cases landlords simply wouldn’t lease properties to students because they had three families waiting for the same apartment in a queue," he says.
In the past five years this has changed, and with the large supply there have been more choices for student accommodation at reasonable prices, he adds. However, recently, even before the awarding of Expo 2020, prices have been moving up rapidly in Dubai. This means that in the next year students will again find it difficult to find accommodation, says Vander Spek.
Students who choose to rent private accommodation may find the renting process more complex. As sharing accommodation is prohibited in this country due to cultural norms, renting an apartment on a single-person basis becomes even more expensive for a student, says Van der Spek.
Saraf adds that for the education sector to grow, bringing down the housing cost becomes essential as a student hiring an apartment has to shell out at least Dh30,000-Dh40,000 annually on accommodation only. If they are not allowed to share housing, the students' cost of living goes up immensely, so this indirectly discourages students from the wider region of the GCC or other countries to come here to pursue an education. "I think some sort of arrangement need to be made in this direction since higher education in itself is very expensive and the accommodation becomes expensive too, by the law being too restrictive," he says.
"Why not introduce easy regulations and allow four students to share an apartment, so that their cost comes down to 2S per cent?"
Smith says there are not many options available in the UAE for student accommodation off university campuses, which potentially offers a new niche in the market and could be a very popular investment option for property investors. "The current situation in the UAE does not accommodate students and hence many expatriates travel to experience the student life.
"Sharing accommodation is currently not allowed for bachelors and bachelorettes so student accommodation has not been as successful as it could be in comparison to the thriving market in the UK. It is against the Muslim religion in some respects. However, I believe for the purpose of allowing a student experience similar to that throughout the world that the typical and current situation may become less vigilant and at some point there might be exceptions to encourage more students to study in the UAE as opposed to leaving to study overseas," she says.
Wasim Tariq, Director of Aaj Property, believes the momentum that is seen in the UK. US and Australia regarding specialised student accommodation is still to migrate to the UAE. One of the reasons for the delay is that student visas entitle them to enter into a tenancy contract in the normal residential market very easily. “However, if exclusive built-up student accommodations are introduced in the city, I believe it is a very good business opportunity similar to the hospitality and hotel-apartment industries," he says.
"The concept revolves around providing good housing development with all the facilities essential for the student under one development and this will provide a full year-round business opportunity. Dubai is the safest place to reside and study and if the same facilities are made available for the students within this country as seen in Western countries, more and more parents will be keen to send their children to the UAE," says Tariq.
Besides the lucrative aspect to building student accommodation in Dubai and the other emirates, Suad Alhalwachi, Director of Education Zone, says considering the increased number of universities in the UAE this will aid the UAE's vision of building a hub for education. She adds, "We are seeing an increased policing on quality. and that is a very refreshing fact. However, for students, accommodation is an important factor in their choice in coming to a country, and to find oneself staying in a studio with another five students or having to pay high rent is not something that a parent will aspire to. So I think if some property developers or investors build students accommodation, this place will become a winner."
Academic City in itself is a great concept and it can become a power magnet to attract students from all over the GCC and other countries, says Saraf. However, there is a need to build an institutional legacy for higher education. "This means attracting and encouraging international universities to build very large campuses that will become the institute of substance to boost off. In my opinion, accommodation facilities at residential cost are the biggest limiting factor for the education sector's growth, and private specialised student accommodation facilities must be encouraged," says Saraf.
"For example, for Expo 2020 the government has come out with a favourable concept of tax reprieve for the next five to seven years, encouraging investors and hoteliers to build an infrastructure to be able to accommodate the anticipated 25 million visitors during the Expo. Similarly, some incentives and concessions must be given to investors and developers to build specialized student accommodation within the country.
“Again, international universities should also be encouraged and motivated to build large campuses and not make shift buildings like we have now, since the education sector can make a city survive for hundreds of years, once it develops the right kind of branding facilities."
He Continues: "With the availability of various affordable student housing units, relaxed part-time working regulations and very large campuses, a lot of fresh blood will be attracted into the country, and they can become instrumental in injecting new ideas into the society and economy," he says.
"Beyond Expo 2020, I think education along with tourism can become the biggest backbones of Dubai."
It is also important to examine why developers that build residences in Marina or other freehold areas are not keen on building student accommodation in Academic City or nearby areas, says Saraf. "The reason for this could be because developers want to be on the safer side and don't see a hostel-like accommodation as a viable form of investment option when they work out the numbers. So, regulations need to ease and concessions need to be offered to developers as this can compensate them for their commercial losses, thereby encouraging them to build such facilities. It's ideal to not expect universities to build all the housing facilities alone; this does not happen in the world since it is too much of management for any institute.
“Another important factor is the lack of clear-cut statistics available – figures on the number of universities that will be coming into the UAE in the years to come would further encourage investors."
Private vs university accommodation
There are pros and cons to both private and university accommodation facilities. Franky Barreto (pictured), Student Services Manager at University of Wollongong in Dubai, says, "Sometimes students find the university-provided accommodation is a bit expensive compared to if they rent an apartment. However, later they realise that they have to pay for Dewa, internet, furniture, cleaning, maintenance, transportation, etc. separately, whereas they are provided all these at the university accommodation. However, the best advantage for them renting their own accommodation will be that they will have their own rules and not have to follow university ones.” Hence, a student needs to work out all the requirements and review the cost and other factors before making a decision.
Expensive, lengthy search
Finding a suitable and economic accommodation is indeed a challenge in Dubai, says Rajat Gulati (pictured), a first semester MBA student at Amity University. He says, "Rents of studio apartments or simply a one-bed apartment is exorbitant and beyond the reach of students. And in the absence of campus accommodation. students are forced to struggle to look elsewhere, which puts extra pressure on us and does not allow enough study time due to travelling, cooking and meeting other requirements. I wanted to stay in Bur Dubai as it is centrally located, but the rents and the travelling cost forced me to look for an accommodation in Academic City and that too with the help of a real estate agent who demanded so much brokerage to find the same.
“As a student and new to Dubai, I was looking fur a fully serviced campus facility, which could have saved me from all the above-mentioned hassles and worries of my parents. Also, some recreational activities within campus would have saved me from searching for a gym and other facilities."
Sharing and exclusivity
An Abu Dhabi resident, Mohamed Javith Nasim (pictured) is a BA tourism Management final-year student at Amity University Dubai and has lived in the UAE fur more than 15 years. He says, "I moved to Dubai from Abu Dhabi to pursue my university education. and initially stayed in Dubai International City for one year before moving to Dubai International Academic City."
“There were many challenges during my search fur accommodation, which included visits to different places, a search for an agent who would offer inexpensive housing, and looking for the availability of RTA bus services, supermarkets, salons, laundry services, easy accessibility to the metro, etc. Most importantly, I wanted to stay near my university, so that I could sleep fur longer hours in the mornings and go home whenever I wanted to.
“I strongly feel that the UAE needs to allow students to share accommodation. Exclusive accommodation would be a very good idea and should be implemented in the market."
Source: Hina Navin, Special to Property Weekly