The cost of interiors accounts for up to 30% of cost for GCC projects, and with UAE remaining the largest market in the sector, Dubai is set to grow in the next year.
A report by Ventures Middle East revealed GCC projects spent US$4.5bn on interiors and fit-outs in 2010, and this is expected to increase spend by more than a quarter (26%) this year.
“The GCC real estate market is showing positive signs for the interiors market. With existing projects at or near completion and countries around the region expanding specifically in the commercial and hospitality sectors, there will continue to be a strong demand for interiors and fit-outs,” said Paula Al Chami, event director, INDEX.
In addition, between 2010 and 2012, 19 million m2 of office space will have become available for interiors and fit-outs in the UAE, according to the report.
A positive sign of the industry is Depa interior contracting, which had previously reported a loss in 2010, seeing a significant pick-up in business with projects which had been delayed, especially in the MENA region, now being signed into backlog. It signed AED 1.6 billion of contracts boosting its backlog by 70% to a record high of AED 3.9 billion from AED 2.3 billion, as of June 30, 2011.
Worldwide, the retail industry is emerging from a difficult time, according to Amyas Wade, associate director, Kinnersley Kent Design. Wade, who runs the firm’s Dubai studio, said it has witnessed an increase in refurbishments whilst new commissions are on the down. “As a result, developers, mall owners and retailers are increasingly looking to refurbish and revamp their existing sites or parts thereof, instead of investing in new constructions.”
Opportunities in Dubai have decreased with a more conservative outlook by clients, but haven’t been completely wiped out. Wade said Kinnersley Kent Design recently exhibited at the INDEX InRetail exhibition in Dubai, which was indicative of the state of the market. “Although footfall has decreased from previous years, the quality of enquiries has increased, with most of the interest coming from Dubai-based clients with live projects,” he added.
The demand for pop-up stores in the city has gone up. Temporary stores require minimum capital expenditure and provide maximum PR for brands, he said. It also gives retailers a chance to try new things without the investment of a concept store or full ATL product launch.
A challenge that design firms are facing are clients who now expect more for less money. “High levels of consolidation in big business, and a lack in the design sector, means that more design consultancies are chasing fewer clients. This often leads to consultancies pitching for free to win new business,” said Wade.
However, a downside of this is some firms expect to receive free creative pitching of ideas prior to being appointed. “As ambassadors of creative design, and as a matter of principle, we never part with our thinking for free. It is derogatory to the creative industry as a whole,” added Wade.
“Another hurdle we’re facing is design buyers’ infatuation with turnkey solutions. Some of our new clients chose to work with us to rectify an existing design. They complained that they invested heavily in commissioning design in the past, only to be left disappointed with what’s been built, because they commissioned a single company to do everything,” he said.
Wade advised clients to use specialists instead of appointing a single company claiming to be specialist in design and build, which is something seen in this region.
“The benefit of using designers to design and contractors to bring it to life, working in close collaboration, is to ensure the true intent and integrity of the brand and design is upheld during implementation to site, without compromise. This method does not just benefit the design industry but also the client, as the end result is what they bought into, and it is financially more viable,” he added.
He said two of the biggest challenges the firm is facing are finding good staff and good materials locally. However, this has been improving over the past two years and there has been an influx of new and diverse materials in the region.