Most tenants in Dubai are negotiating better rental deals with landlords to stay in their existing apartments as uncertainty surrounding jobs limit their movement, a new research has found. A study by real estate consultancy Cushman & Wakefield Core said landlords are also willing to offer incentives to retain their tenants.
"We anticipate limited movement over the coming weeks as most tenants are expected to negotiate with their current landlords, particularly those with immediate rent renewals. We also foresee in some cases rental incentives to be provided by landlords such as partial rent waivers, higher number of cheque payments, extended rent free periods and contribution to utilities in order to help tenants while also maintaining occupancy of their unit," said Prathyusha Gurrapu, head of research and advisory at Cushman & Wakefield Core.
While experts say it's still too early to assess the exact percentage drop due to the impact of the current situation, "rent reductions or rent holidays are definitely the way forward".
Notify your landlords about financial strains With salary cuts and layoffs almost a given in the current Covid-19-affected situation, tenants are being advised to notify their landlords about their financial predicament.
"We recommend that tenants should present any provision of documentation that is not confidential to help support the case with landlords like documentation of salary cuts, reductions or unpaid leave requests," said Ian Albert, regional director and head of Valuation and Advisory at Colliers International Mena.
Read the fine print Expressing apprehensions over residential rent waivers that are being dealt with on a case-to-case basis, some experts advised people to tread cautiously.
"Rents in Dubai will witness a gradual correction. But some landlords are deferring rent for two months and loading the total over the remaining term of lease," said Simon Boden, Residential Leasing Manager, Savills.
This means residents will need to cough up higher amounts later on.
While it's understood that any impact on remuneration will be reflected in the demand for rental properties, the effect will be more prominent as more supplies come to the market, the experts added.
Affected residents play it by ear Aman Khan (name changed), an investment banker, lost his job three weeks ago. He lives in Meadows in a three-bedroom villa.
"It's definitely a matter of concern for the family, as our rent is Dh150,000 per year, but I'll soon discuss this with my landlord. If I don't see relief coming, I will have to consider an early exit from our rental contract," said Aman.
Similarly, Akram Siddiuqe who lives in Mirdif in a two-bedroom apartment, is also clueless as to what is next. "My company has asked me to go on unpaid leave for an indefinite period. My lessor said he can't ease rental payments for me or other tenants, unless the landlord provides a similar relief to him. So maybe I will have to move apartments and consider other options."
Indian expat Swati Singh and her husband are both facing pay cuts. While they do not consider an immediate move from their Jumeirah Beach Residence residence, they are open to more options if rents fall drastically in other areas. "We pay really high rent because we are in a premium location. If rents drop, we can certainly consider other areas."
