DUBAI: Looking to move in Dubai? How about a rent-free period when you sign up for a one-year lease?
Leasing firms as well as direct owners in certain localities, especially low- to mid-range residential units, are offering sops to tenants in a tough market, XPRESS has learnt.
"I was surprised that the lease contract I signed came with two months' extra rent-free period," said Rasha, an Asian tenant who signed a contract last week for a three-bedroom unit along Shaikh Zayed Road (SZR). A two-bedroom in the same building is leased for Dh70,000, plus two months free.
In Al Nahda 2, Fizza Properties offers a 12-plus-one month free deal, while Sultan Real Estate offers a similar deal on a two-bedroom unit for Dh38,000 near the Dubai Airport Freezone Metro station. Better Homes, one of Dubai's biggest property agents, gives a two-month rent-free period in Shorooq Mirdif, a family-oriented project, where rents for a one-bedroom start from Dh40,000 per year.
"Tenants are effectively offered a 14-month rent period for the price of just 12 months," said Ryan Mahoney, managing director of Better Homes. "With Shorooq, there's a reasonable amount of supply for that part type of unit in this area, with fresh units that have just come into the market."
Would-be tenants must however be lucky as not all Dubai areas offer such sweeteners.
"In many cases, one part of Dubai is operating in the opposite direction of another," said Mahoney, citing a shortage of residential space in areas such as the Palm Jumeirah, the Marina and Al Barsha.
As for commercial leasing, rent-free tenant incentives are a standard offer across most commercial districts today. Ian Albert, Regional Director for the Middle East of Colliers International, expects the trend to continue for the next two years. "The rent-free scheme is certainly good news for commercial tenants," said Albert. The reason, he said, is oversupply.
"All of the main central business districts in Dubai — such as Business Bay, Jumeirah Lakes Towers, parts of Shaikh Zayed Road and Bur Dubai — are offering some kind of tenant incentives. The only exception is DIFC, which had seen declining rental until recently," said Albert.
The incentives not only include a rent-free period. Some landlords offer stepped rentals — with attractive rents during the first year that goes up incrementally on subsequent years — as well as capital contribution, where the owner assists in fitting out the office space.
"This works for companies that want to retain their capital for core operations," said Albert.
Jade Maras, senior property consultant with Landmark Properties, has worked in Dubai's real estate business for eight years. She said: "This trend [rent-free incentive] does apply to certain residential areas — Silicon Oasis, Skycourts — and parts of SZR. In prime residential areas, such as the Palm, Old Town and DIFC, the rents are pretty much established."