Worker housing projects in the UAE are expected to attract increased interest from investors following a ruling that requires more companies to provide free accommodation to low-paid staff.

A government decree issued by the Ministry of Human Resources and Emiratisation on July 18, which comes into force in December, applies to firms with more than 50 employees, and requires them to give free housing to those earning less than AED2,000 per month. The ruling reduces the minimum threshold from the 500 staff set in previous ministry directive.

Faisal Durrani, head of research at the real estate firm Cluttons, told Zawya that labour accommodation camps are proving popular among local investors as they provide yields of up to 10%.

The introduction of the new law is likely to spur interest among overseas investment funds, he added.

“On the investment front… we have seen these worker accommodation camps traded on the market and the yields have been attractive… With Brexit and the global economy, global funds will be looking to diversify their portfolios and probably trying to seek out interesting new asset classes and this is likely to emerge as one of those,” he told Zawya.

“We have numerous mega infrastructure projects under construction linked to the government program ahead of Expo 2020 and demand for beds in key worker accommodation facilities will continue to rise.”

Durrani said interest was high for worker accommodation even prior to the announcement from the ministry. A lack of supply saw rents increase from around AED250 per month per worker in 2011, to around AED500 per worker per month at present.