Dubai: Dubai’s hotels and all those properties listed on Airbnb needn’t be the only options open for visitors who are here for more than a few days. The city has already seen significant new capacities in serviced apartments, that are such a big hit with GCC families and corporate travellers alike.
But, now, a relatively new entity is adding a third dimension. Blueground, with its corporate headquarters in the UK, takes up leases on residential properties at some of Dubai’s upscale towers at DIFC, Dubai Marina and elsewhere and then offer these to clients. And they can have the run of the property for periods of a minimum one-month and stretching to a year at a stretch.
Not surprisingly, the service provider targets professionals who are in Dubai on specific projects or contracts and do not want to get into the hassle of renting out on their own. Blueground is already operational in Greece, which is where its traces its origins, and Turkey.
A typical lease in Dubai could be anywhere from Dh9,000 a month for a studio to Dh20,000 for a two-bedroom. All the maintenance and facilities support are provided, but does not extend to offering F&B as at a hotel or serviced apartment. The company currently has a roster of 50-odd apartments at high-rises such as the Burj Daman and Index Tower. Before year end, the intention is to bulk up the property count by quite a stretch.
“But these are fully furnished residences we list and we generate the stays through our working relationships with key corporate clients,” said Alexandros Chatzieleftheriou, CEO and co-founder. “There are also signings up made directly by the tenant, but the bulk of the occupancy is generated through corporate referrals.” (Clients include Samsung, Panasonic, H&M and IKEA.)
Dubai’s regulatory requirements too have become flexible in allowing individual residential properties to be offered on short-term rentals. “They have created the category of “holiday homes”, and have terms on how these properties need to be done and marketed,” said Chatzieleftheriou. “But unlike in Europe, there is no upper limit of 90 days on the duration of an individual contract.
“All of our properties are listed on the DTCM (Dubai Tourism and Commerce Marketing) portal and that makes the entire process transparent.”
Before one tries to draw a comparison with Airbnb, Chatzieleftheriou is quick to dispel one. He makes it clear that his offer should not be viewed as a high-end version of the Airbnb template.
“Airbnb is a online listing marketplace for short-term stays and it does not get directly involved in the management of those properties,” said Chatzieleftheriou. “Blueground is directly responsible for those properties we list and in their upkeep. And all contractual arrangements are done directly with the tenant.”
For developers and property investors in Dubai, the availability of relatively newfangled property services such as these would be quite welcome. It means there will be corporate takers for what they build and ensuring that properties do not lie vacant for long. As more towers get delivered in Dubai and at newer locations, such end-uses will have a role in keeping future occupancies at optimum levels.
Low attrition rates
Blueground is particular that it will only enter leases and not acquire the properties directly. To date, the arrangements with the property owners have been on an even keel and “attrition rates” remain low, said Chatzieleftheriou. (Attrition rates in this case refer to the company having to scout for new locations because the lease renewal was not done because of issues with the landlord.)
The Greece operations are turning a profit and expectations are that the Dubai and Turkey ones would do so by this year itself. Blueground has already gone through three rounds of financing for $7.4 million, including two in the pre-seed and seeding stages. The latest one fetched it $5.8 million.