S&K Estate Agents LLC , One of Dubai’s biggest real estate agencies has released a statement regarding its recent bankruptcy. S&K Estate Agents LLC (also known as Smith and Ken) has been handed to liquidators in a process to pay back creditors, with all 80-plus employees having lost their jobs.
The company filed bankruptcy at 1am on Tuesday July 21, 2015 and has been terminated in its entirety, with both Dubai and LA offices and the brand itself no longer active.
The following statement was composed by the S&K Estate Agents LLC shareholders:
“Unfortunately we have had no other choice but to file bankruptcy and hand over accounts and any remaining income to our liquidator.
“Simply put, the revenue being generated by the business drastically reduced over the first half of 2015, without enough income to cover operational costs.
“Additional support, advertising, incentives and training had been provided to existing and new agents to try and aid their growth and development to increase sales.
“As a last resort to find more experienced agents, the shareholders invested a considerable amount into a heavy recruitment drive in the first half of 2015, using recruitment agencies in both Dubai and the UK. However, the fruits of this process did not transpire in time to save the organisation.
“Poor service levels provided by the brokerage led to a number of complaints from clients, which deterred repeat business opportunities and created a poor reputation for the company, which is the graveyard for any serviced-based company.
“Current Dubai market factors didn’t help, as 2015 property transactions, both in number and value have plunged. This situation was exacerbated by increased advertising prices from property portals and recurring internal issues faced with agents under the employment of S&K Estate Agents LLC. These factors, combined with the increased costs of licensing and visas, made the situation untenable.
“After years of profitability, we believe the brokerage market is saturated – too many agencies without the population and investment to match. Also, many smaller competitors dropping fees to one per cent per transaction to win the business has made it increasingly difficult for larger brokerages to compete.”
The company has appointed Dawn Consultancy as a liquidator to complete the bankruptcy procedure and closure of the brokerage.
This is indeed a troublesome news for the Real Estate industry in Dubai which is already in turbulence due to falling oil prices. Real Estate investors shudder with the thoughts of the recurring recession of 2008 in which Dubai was severely hit.