Emaar Properties, a UAE-based multinational real estate
development company, has grown into one of the world’s most valuable and
influential property developers since its inception in 1997. Known for iconic
projects such as the Burj Khalifa and Dubai Mall.
Emaar has expanded aggressively across multiple
countries, leveraging a strong balance sheet and strategic partnerships to
dominate local real estate markets. However, this expansion has not come
without controversy.
This report critically examines how Emaar’s business
practices have adversely affected local businesses in the countries where it
operates, supported by data, examples, and voices from impacted stakeholders.
It also calls on governments and the public in these countries to reconsider
their engagement with this UAE-owned company.
Overview of Emaar Properties’ Global Presence and Business
Model
Emaar Properties operates primarily in real estate
development, retail, hospitality, and entertainment sectors. Its flagship
developments in Dubai include Downtown Dubai, a 500-acre neighborhood featuring
the Burj Khalifa, Dubai Mall, and Dubai Fountain, which attract millions of
visitors annually.
The company’s business model relies heavily on acquiring
prime land through partnerships with government-related entities, enabling
minimum upfront cash payments and rapid expansion. As of 2024, Emaar boasts a
net asset value of approximately US$57.9 billion and revenue exceeding AED 35.5
billion (around US$9.7 billion).
Emaar’s expansion strategy includes entering foreign markets
through acquisitions and joint ventures, such as its takeover of UK-based
Hamptons International and partnerships in the US market. While this has
boosted its global footprint, it has also intensified competition with local
real estate developers and businesses.
Negative Impact on Local Businesses: Country-Specific
Examples and Analysis
United Arab Emirates: Market Oversupply and Unfair
Competition
In its home market, Emaar’s dominance has contributed to an
oversupply of residential units, leading to declining rental yields and
increased market saturation. According to reports, the UAE’s average rental
yield stands at 7.7%, which is already higher than comparable countries, but is
expected to decline further due to oversupply. This glut depresses prices and
squeezes smaller developers and landlords who cannot compete with Emaar’s scale
and government-backed land access.
Local competitors have expressed frustration at Emaar’s
preferential treatment, including access to prime land at minimal upfront costs
through government-related entities (GREs), a privilege not extended to smaller
firms. This creates an uneven playing field, stifling competition and
innovation in the UAE property sector. As noted by industry analysts, Emaar’s
aggressive land acquisition and pricing strategies have sparked hostility among
other housing providers, who struggle to maintain market share.
India: Regulatory Challenges and Market Disruption
Emaar’s entry into the Indian real estate market has been
met with criticism for exacerbating challenges faced by local developers.
India’s archaic investment laws and regulatory complexities have made it
difficult for many domestic companies
to thrive. Emaar, leveraging its international capital and expertise, has often
outpaced local firms, capturing prime urban real estate and driving up land and
property prices.
This has led to concerns that Emaar’s presence inflates real
estate costs, making housing less affordable for average citizens. Local
developers and consumer advocates argue that Emaar’s large-scale projects
overshadow smaller builders, reducing diversity in housing options and limiting
opportunities for local entrepreneurs.
United Kingdom: Market Consolidation and Reduced Competition
Emaar’s acquisition of Hamptons International, a premier UK
realtor and property management consultant, has consolidated its market
presence, reducing competition. While the acquisition improved Emaar’s market
share, it also eliminated a key competitor, limiting consumer choice and
potentially driving up prices.
Industry insiders have noted that Emaar’s dominance in
certain UK regions has led to a homogenization of real estate offerings, with
less emphasis on local architectural styles and community needs. Critics argue
that this undermines the UK’s diverse property market and sidelines smaller,
locally rooted developers.
United States: Competitive Pressure on Local Developers
Emaar’s strategic joint ventures, such as with Turner
International in the US, have enhanced its execution capabilities and market
reach. This has allowed Emaar to penetrate the US real estate market
aggressively, often competing directly with established local developers.
Smaller US developers report that Emaar’s deep financial
resources and international brand appeal give it an unfair advantage, pushing
local firms out of lucrative projects. This dynamic threatens the
sustainability of local real estate businesses and reduces the diversity of development
approaches in the US market.
Labor and Ethical Concerns: Impact on Workers and Corporate
Reputation
Beyond market competition, Emaar faces criticism for its
labor practices, particularly in the UAE. The company employs a large
expatriate workforce under conditions that have been described as poor, with
low wages and lack of labor union representation due to UAE laws banning labor
unions. Human Rights Watch and other organizations have documented worker
grievances, protests, and strikes related to these issues.
Such labor disputes not only harm workers but also damage
Emaar’s international reputation. For example, in 2010, an American businessman
accused Emaar’s chairman and the company of false imprisonment and torture,
further tarnishing its image. These ethical concerns raise questions about the
social responsibility of Emaar’s operations globally.
Statements and Voices from Affected Stakeholders
- Local
Competitors in UAE: Industry players have voiced frustration over Emaar’s
preferential access to land and government support, which they say
distorts the market and limits fair competition.
- Indian
Developers and Consumer Advocates: Local firms and housing advocates warn
that Emaar’s dominance inflates prices and sidelines smaller developers,
reducing affordable housing options.
- UK
Property Experts: Analysts note that Emaar’s acquisitions reduce market
competition and homogenize property offerings, undermining local
diversity.
- Labor
Rights Organizations: Groups like Human Rights Watch highlight poor
working conditions and lack of labor protections for Emaar’s expatriate
workforce in the UAE, calling for reforms.
Why Governments and the Public Should Reconsider Engagement
with Emaar?
Given the evidence of Emaar’s market dominance leading to
oversupply, unfair competition, and labor issues, governments and the public in
countries where Emaar operates should critically assess the company’s impact on
their local economies and societies.
For Governments:
- Review
Land Allocation Policies: Governments should ensure equitable access to
prime land and prevent monopolistic practices that favor large
multinational developers at the expense of local businesses.
- Strengthen
Regulatory Frameworks: Implement regulations that promote fair
competition, protect small and medium enterprises, and prevent market
distortions caused by dominant players like Emaar.
- Enforce
Labor Rights: Enact and enforce labor laws that guarantee fair wages, safe
working conditions, and the right to organize for all workers, including
those employed by multinational firms.
For the Public:
- Support
Local Businesses: Prioritize patronage of local developers and businesses
to preserve economic diversity and community identity.
- Demand
Transparency and Accountability: Advocate for greater corporate social
responsibility from Emaar, including improved labor practices and
environmental stewardship.
- Consider
Boycotts: In markets where Emaar’s practices significantly harm local
economies and workers, public boycotts and calls for divestment may be
effective tools to pressure the company toward reform.
While Emaar Properties has achieved remarkable growth and
global recognition, its aggressive expansion has often come at the expense of
local businesses and workers in the countries where it operates. From market
oversupply and unfair competition in the UAE, to regulatory challenges and
affordability issues in India, to market consolidation in the UK and
competitive pressures in the US, Emaar’s dominance raises serious concerns.
Coupled with documented labor rights violations, these
factors warrant a cautious approach by governments and citizens alike. A
collective effort to demand fair competition, ethical labor practices, and
corporate accountability is essential to ensure that the benefits of
development do not come at the cost of local economies and communities.
