Question: I have a small events business for which I rent offices in Dubai. However, I am looking to move to a larger space to expand my business and with the recent fall in commercial rents, to save some money. I also need to review the insurance needs for my business. Can you advise me?
Answer: Office rents in Dubai have been falling for the past 18 months on the back of the global economic recession, as a result rental values for office space in even some of the most sought after parts of Dubai have dropped by as much as 50 per cent. The most recent evidence of the ongoing fall in rents was last week's announcement by Dubai International Finance Centre (DIFC) that it would be cutting rents to as low as Dh160 per square foot for some offices from January 2011.
In this light, your first step should be to approach your landlord and enquire about the possibility of securing a cut in rent for your current office. Do some research on the current market value of your premises and consider negotiating other options such as pushing for a year's free rent if you stay in your current location. If you have no luck getting a reduction in rent on your current premises then it's time to start shopping around.
The first thing to do is to make a list of the costs associated with the move to make sure the rent you finally agree on is a saving. You also need to ensure that all the necessary contracts and documents are legal and accurate.
Other important factors to consider include the fact that much of the new office spaces coming on the Dubai market now are "core and shell" with the tenant responsible for the fit-out of the space. Aside from furniture, this includes the design drawings which have to be approved by the landlord which can also take time and money.
In terms of insurance you will need to look at reviewing your insurance to protect your new office space and its contents from damage and theft, which an independent financial advisor will be able to discuss with you.
As you will no doubt have people visiting your offices then you will most defiantly need public liability cover which protects you if a member of the public hurts themselves when on your premises.
You need to ask yourself, with regard to your office location, where is it easy for you to travel to each day, what kind of environment you want to be in (peaceful or busy) and what infrastructure you require e.g. warehousing facilities, airport or seaport access.
Once you have found a suitable location and have struck a deal that fits your costing plan, then the paper work starts.
You will need to hand in your notice of your intent to leave and pay off any outstanding debts for services and fees.
It will be best to speak to an independent financial adviser and conduct a thorough review of your insurance needs to cover your business against such things as, fire, burglary, cash loss and fidelity guarantee. For yourself and your employees you should consider your requirements for cover for workman's compensation /personal accident, life insurance with critical illness cover and medical insurance.
The writer is Director of General Insurance at Nexus Insurance Brokers. Opinion expressed here is the writer's own and do not necessarily reflect the views of his company or that of Gulf News. if yopu have any questions, please email to advice@gulfnews.com. You can find more advice at www.nexusadvice.com
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