Office landlords are ready to make concessions
Bank Mashreq conducted a study on the real estate market in Dubai. According to the report, office landlords are willing to talk to customers about reducing prices and deferring payments.
The pandemic has changed the rules of doing professional work. Office work has been replaced by remote work, and many spaces have become in demand. To remedy the situation and get clients back, landlords are taking various steps. Among them are discounts on long-term rent or the option of individual workstations. Co-working spaces are also becoming popular.
Another trend in the office real estate market in Dubai is the deferred payment and reduction of the rate when prolonging the contract. This applies not only to office space, but also to retail properties. Landlords understand that the situation is difficult not only for them but also for other businesses. Moreover, even those owners of commercial real estate, who last year were firm and did not reduce prices, go for discounts and incentives. Now they are ready to listen to the proposals of tenants and agree to make concessions.
For those clients who rent an office, the owner gives them the opportunity to temporarily reduce the size of the premises until the market situation changes for the better.
Business in the UAE is experiencing difficulties, the level of income has fallen in almost all segments. Therefore, every landlord is doing everything possible to make the most out of the current situation and adapt to changing market conditions.
Most commercial landlords, including shopping centers, offered a deferral of payment during the 2020 pandemic, but it was temporary until the quarantine restrictions were lifted. At the same time, many clients asked for rental vacations until the end of 2020, which landlords did not agree to.
However, now all market participants have realized that trends have changed, and there is no return to the previous stable situation. And this means that new processes have to be built in order to get the maximum benefit. That is why landlords are using a more flexible business policy, they are ready to make concessions and search for the optimal solution together with clients, which will be acceptable for both parties. Hybrid forms of work are becoming more and more popular, when some people can be in the office and the rest of the staff can be at home. Thanks to this approach, the tenant has the opportunity to reduce the cost of space, but at the same time not to abandon it completely.
Co-working spaces are also growing in popularity, which are in demand by freelancers and people who want to work away from home occasionally. Startups also often use this option to save money on renting a full-fledged office.