Business | Property
Reef tests the market with serviced offices
For those tenants paying six months’ rent upfront, the developer is offering a five per cent discount
- By Deepthi Nair, Sub Editor, Property
- Published: 00:00 October 1, 2009
- Image Credit: Silvia Baron, Staff Photographer, Property
- Shaikh Ahmad Mohammad Zayed Saqr Al Nahyan, chairman of Reef Real Estate, with Ian Lloyd, chief executive, R-Serviced Offices
In a realty market still treading cautiously, ‘serviced offices' could be the next big thing. By offering a certain number of back-up services at a fixed cost, the developer is now able to reach out to tenants who would otherwise have not considered shifting premises in an extremely tough business environment.
Unveiling its serviced offices, Reef Real Estate is offering 188 units ranging between 200 and 2,000 square feet for monthly rentals of up to Dh9,000 at Al Reef Tower in Jumeirah Lakes Towers. For those tenants paying a six months' rent upfront, the developer is offering a five per cent discount, and 10 per cent to those who pay for the full year. These tenants also get a discount on service charges. Reef Real Estate officials are quick to give the lie to reports of a tepid commercial marketplace, confirming that the units on offer have been quick to win over patrons since the leasing programme started on August 1. While the tenant list features auditors, debt management firms, legal and commodities companies, a senior official says that Reef was weighing its options on serviced offices even before the market correction set in.
But once the downturn became tangible and companies started to downsize and eschew the liabilities imposed by long-term leases, serviced offices have sure enough emerged as the best short-term alternative available today. The other shell-and-core office and retail spaces in Al Reef Tower bought by investors could also end up in the serviced offices pool.
In fact, Al Reef Tower's location within Jumeirah Lakes Towers has worked to the developer's advantage. There is the advantage of being close to two Metro stations on top of the benefit of operating within a free zone operated by the Dubai Multi Commodities Centre.
"We have exclusivity in DMCC, there was no stock available here," says Ian Lloyd, chief executive, R-Serviced Offices. "Also its ideal for those companies whose licences expire soon, and need a temporary place to operate from." He has a point, especially going by the latest DMCC data, which states that 1,700 companies have so far registered to set up their bases in the cluster.
Reef Real Estate is now so taken up with the serviced office concept that a similar model will be unveiled later in Abu Dhabi. Even a franchising of the ‘R-Serviced Offices' is not being ruled out.
On its other projects, matters are not progressing according to plan. Saddled by defaults, Reef Real Estate has decided to place the Furjan building in Jebel Ali, Park Residences in Downtown Jebel Ali and the Dunes Tower in Jumeirah Village on hold. Escrow accounts for these projects will ensure that those investors who made timely payments get a refund or their unit transferred to a completed one, either the Al Reef Tower or the Madina Tower, also in Jumeirah Lake Towers.
"The Real Estate Regulatory Agency has been informed about these projects," says Shaikh Ahmad Mohammad Zayed Saqr Al Nahyan, chairman of Reef Real Estate. "We are lucky to be able to refund investors who are paying their instalments on time, and are trying to settle all accounts with defaulters."
Value add-ons
Apart from the tenancy contract, visas and the licence, R-Serviced Offices clubs together add-ons such as a secretary, receptionist, concierge, office manager, IT support, furniture, telephone lines, internet access and qualified support staff for the corporate tenants.
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