Land­lords get flex­i­ble

Khaleej Times - - BUSINESS - Deepthi Nair

Rent de­clines for res­i­den­tial prop­er­ties in Dubai av­er­aged five per cent for the last 12 months and 2.5 per cent on av­er­age quar­ter on quar­ter, ac­cord­ing to a re­cent re­port. Land­lords are of­fer­ing var­i­ous in­cen­tives to keep their units oc­cu­pied.

dubai — Rent de­clines for res­i­den­tial prop­er­ties in Dubai av­er­aged five per cent for the last 12 months and 2.5 per cent on av­er­age quar­ter on quar­ter, es­ti­mates prop­erty con­sul­tants Cavendish Maxwell.

“De­clines were more pro­nounced in In­ter­na­tional City, The Greens, Dis­cov­ery Gar­dens and Al Fur­jan, av­er­ag­ing a 12-month change of more than six per cent. Rent de­clines are ex­pected to con­tinue in the sec­ond half of 2018 with new han­dovers planned across Dubai,” says Moe Abei­dat, chief tech­nol­ogy of­fi­cer, Prop­erty Mon­i­tor.

Ap­prox­i­mately 3,700 res­i­den­tial units were handed over in Q2 2018, reck­ons Abei­dat. The ma­jor­ity of han­dovers were in Jumeirah Vil­lage Cir­cle (JVC), Da­mac Hills, Dubai Sil­i­con Oa­sis and Al Nahda. For the re­main­der of the year, ma­jor­ity of the upcoming sup­ply is in Busi­ness Bay, JVC and Down­town Dubai.

Land­lords are of­fer­ing var­i­ous in­cen­tives to keep their units oc­cu­pied. “A lot of land­lords are show­ing more flex­i­bil­ity in the mar­ket at the mo­ment, ei­ther to at­tract new tenants or to re­tain ex­ist­ing ones. We are see­ing var­i­ous in­cen­tives such as 1-month free rent, the in­clu­sion of white goods, pay­ing for mov­ing fees and more. There is a healthy de­mand from tenants at the mo­ment, so if a land­lord of­fers a com­pet­i­tive rent and at­trac­tive cheque pay­ments, they will be able to at­tract a ten­ant in a rel­a­tively short time pe­riod,” says Louis All­sopp, CEO of All­sopp & All­sopp.

Land­lords should try to re­tain ex­ist­ing good tenants who look af­ter their prop­erty well or stand to lose money while the prop­erty is va­cant.

“Land­lords are hav­ing to think out­side the box. For new tenants, the prom­ise of an ex­tra month is prov­ing pop­u­lar, pay for 12 months but re­ceive 13. Land­lords are hav­ing to ac­cept more flex­i­bil­ity with the num­ber of cheques, four to six be­ing com­mon now. Twelve

some land­lords of­fer main­te­nance con­tracts as part of the ten­ancy agree­ment Mario Volpi, Sales and leas­ing man­ager, En­gel & Völk­ers Dubai

cheques are not nec­es­sar­ily the norm but these pay­ment terms are be­ing seen more of­ten. Some land­lords of­fer main­te­nance con­tracts as part of the ten­ancy agree­ment,” says Mario Volpi, sales and leas­ing man­ager, En­gel & Völk­ers Dubai.

But, there are still many land­lords who com­mand one cheque. This may be due to a few fac­tors such as the ac­tual rent, the unit lo­ca­tion, qual­ity and fa­cil­i­ties of the prop­erty. “For pre­mium homes in

For pre­mium homes in very spe­cific lo­ca­tions, there is still in­cred­i­bly high de­mand Nick Gras­sick, Man­ag­ing di­rec­tor, PH Real Es­tate

very spe­cific lo­ca­tions, there is still in­cred­i­bly high de­mand. These are the own­ers who know the value of their prop­erty and will hold out for the elu­sive one cheque pay­ment,” says Nick Gras­sick, man­ag­ing di­rec­tor, PH Real Es­tate.

The soft mar­ket is also see­ing a lot of ten­ant move­ment to larger, bet­ter lo­cated prop­er­ties. Tenants are mov­ing out of es­tab­lished com­mu­ni­ties into new ones.

“There is the op­por­tu­nity of a brand new prop­erty, a more com­pet­i­tive rent and the chance to up­size to a larger prop­erty for the same rent you are cur­rently pay­ing. How­ever, there is not a mass ex­o­dus. The es­tab­lished com­mu­ni­ties still have a huge amount to of­fer — lo­ca­tion, ameni­ties, schools, es­tab­lished parks and play ar­eas, com­mu­nity cen­tres and more,” ob­serves All­sopp.

Mar­ket stake­hold­ers be­lieve res­i­den­tial rents have al­most bot­tomed out and ex­pect a lev­el­ling out in the sec­ond half of the year.

“The Dubai prop­erty mar­ket has largely been de­ter­mined by emo­tion; the mar­ket sen­ti­ment is that there is no rea­son why prices should in­crease. How­ever, we are ex­pe­ri­enc­ing greater re­sis­tance from own­ers to ac­cept of­fers much lower than the al­ready re­duced ask­ing prices. There is great value for money to be found in key com­mu­ni­ties of Dubai at the mo­ment,” ex­plains Gras­sick.

“Rents will con­tinue to be soft for H2 2018. This is a great time for tenants who will be in a strong bar­gain­ing po­si­tion go­ing for­ward,” con­tin­ues Volpi.

[email protected]­j­times.com

— KT file

Land­lords are of­fer­ing var­i­ous in­cen­tives to keep their units oc­cu­pied.

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