Developer demands 20% fee cuts, survey reveals market in distress
Abu Dhabi’s biggest developer is asking consultants for retrospective fee cuts of up to 20%, in the latest evidence that the Middle East’s economic problems have extended beyond Dubai.
State-owned Aldar Properties is understood to have asked architects and engineers for discounts of up to 20% on jobs that are underway, but where fees have yet to be paid, while prices for future work are also being renegotiated, said Building. The affected projects include the £28bn Yas Island leisure resort and the £13bn Al Raha beach development.
One architect told the magazine: ‘We’ve received a letter from Aldar telling us it wants better value for money. The cut is in the 20% ballpark.’
The news echoes the results of a new survey published by Building, which suggests that two thirds of UK firms operating in the Gulf have been asked to cut fees in the last three months.
Almost 70% of respondents said their firm had laid off staff in the UAE in the past quarter, and two thirds said they thought Dubai’s property market would take at least a year to recover.
It wasn’t all bad news, however. Seventeen percent of respondents said they earned twice as much as they would in the same role in the UK, and a quarter earned 50% more.