DUBAI // A leading estate agent and property management company in Dubai has gone out of business with the loss of dozens of jobs.
S K Real Estate ceased trading last Tuesday without warning to most of its 70 employees.
The glass door to the company’s office on floor 11 of Concord Tower in Media City has been smashed. Staff at neighbouring businesses arrived at work yesterday to find shattered glass littering the corridors. Police are investigating.
Many S K staff only discovered they were out of a job when they turned up for work last Wednesday. They are owed both wages and commission.
One former employee said: “No one has been paid. It had been going on for a long time. The company had a mixed name in the market.
“But we came to work on Wednesday morning and saw signs on the door saying S K was no longer in business.
“I’d had a message at 5am saying the company had closed, but there are always rumours going around in this business that companies are going to close, so I got up and got to work and found the note on the door.”
The employee said S K’s chief executive Benjamin Smith had notified brokers this month that a new company was being set up and a re-branding was likely, after a dispute between the business’s owners.
Officers from Dubai Police are expected to return today to continue their investigation. Concord Tower management was advised to restrict access to the 11th floor until the offices could be secured.
S K Real Estate was established as Smith & Ken in 2008. Two years ago it opened offices in Los Angeles, California. The US office did not respond to a request for comment.
Property experts say an oversupply of brokers in a declining Dubai property market may have led to the closure. There has been a fall in both the volume and value of property transactions in the first six months of this year.
Figures from Dubai Land Department show a 14 per cent year-on-year decline in the number of homes sold and a 15 per cent fall in the total value of transactions.
In its report on Dubai for the second quarter of this year, the property services company Asteco said the sharpest decline in sales was at the top end of the market.
Asteco reported an 18 per cent year-on-year decline in prices of Palm Jumeirah villas and a 10 per cent drop in property at Arabian Ranches.
Mario Volpi, a property expert and columnist for The National, said the market for estate agents in Dubai was “already too crowded”, with more than 2,200 listed companies and about 5,500 registered individuals operating in a market with 2.3 million residents.
“It’s not the first estate agency to close and it won’t be the last, but it is the biggest to close recently,” he said.
Mr Volpi said operating costs for many agencies were high, especially the cost of media listings. “Advertising is expensive and you need to be on these sites.”
Mark Wellman-Riggs, general manager of Crompton Partners Estate Agents, said house prices across the board had declined by about 10 per cent since the start of 2015 and by 15 per cent in the past year.
“I get the impression that there is another 5 per cent to go before we stabilise,” he said.
“Investors are wary of the secondary market as they believe many existing homes are priced too high and are looking to pick up bargains through distressed sales.”
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(via The National)