Unlike a general perception that rents will go up ahead of Expo 2020, residents will be paying less rents due to a supply-and-demand correction, subdued population growth, bearish market sentiments and global or regional economic uncertainties, they said.
Latest data released by ValuStrat indicates that average annual rents in Dubai dropped by 9.2 per cent in the first three quarters of 2019 compared to 8.4 per cent in 2018 and 9.1 per cent in 2017.
Apartments across Dubai registered a 9.4 per cent year-on-year decline in rents, while villa rates dropped by 8.8 per cent so far this year. Average rents in Dubai fell approximately 27 per cent during the last three years and the similar downward trend is expected to continue in 2020.
"The general decline in annual rents is expected to broadly continue for many areas, with more sharpened drops in areas with significant new supply pipelines," Haider Tuaima, head of real estate research at ValuStrat, told Khaleej Times. "We have no reason to believe that rents would increase in 2020."
The report showed that average apartment rents in Dubai dropped from Dh74,373 in the first quarter of 2019 to Dh70,548 in the third. Villas followed a similar downward trend as average rates fell from Dh221,202 to Dh210,454. Residential occupancy in Dubai is estimated at 86 per cent.
"The market condition is slow due to a supply and demand mismatch. Rents are likely to pick up momentum from the first quarter of 2020 onwards," said Saad Maniar, senior partner at Crowe in DIFC.
Elaborating, he said the residential rent market will remain under pressure next year due to a supply and demand correction. However Expo 2020, extraordinary infrastructure and recent changes in property laws and regulations will have a positive impact on economy in general and the real estate sector in particular.
"No one should have a doubt that Expo 2020 and excellent infrastructure will attract more investors in Dubai," Maniar said.
Average annual rents for two-bedroom villas stood at Dh105,000; three-bedrooms were at Dh160,000 while four-bedrooms remained at Dh209,000. Moreover, average rents per annum for studio apartments were Dh48,000, while one-, two- and three bedroom apartments were at Dh67,000, Dh97,000 and Dh130,000, respectively, according to the report.
John Stevens, managing director at Asteco Property Management, said rents' downward trend is likely to continue in 2020. However, tenants who have been paying below-market rents, as they are protected by the rental cap, could expect marginal rental increases in line with the law.
"Overall, Asteco expects rental rates to continue their downward trajectory in 2020, albeit at a lower rate, which means the majority of tenants should be paying less rent next year," Stevens told Khaleej Times.
He said that the lower rents are strongly linked to the negotiating skills of tenants and their willingness to move if the landlord is not flexible. "Many tend to stay put to avoid the cost/hassle of moving and therefore do not take advantage of declining rents," he said.
Stevens attributed the decline in rents to oversupply, subdued population growth and bearish market sentiment in addition to limited or negative business/employment growth and global or regional economic uncertainties.
The ValuStrat report named Dubai Sports City, Discovery Gardens, Jumeirah Lake Towers, Dubai Marina and Dubai Production City as locations where rents dropped the most in the first nine months of 2019. For villas, the report mentioned Arabian Ranches, Jumeirah Village, Jumeirah Islands, Dubai Silicon Oasis and Jumeirah Golf Estates, where rents declined from 13.7 per cent to 7.1 per cent during the January-September period.
Asteco Property Management is the oldest, largest and most successful multi-disciplinary Real Estate Company in the UAE with over 34 years of Commercial success and today announced that they have launched their proprietary Vendor Portal.
“Our Vendor Portal allows companies to register the services that they offer to Asteco” said John Stevens, Managing Director of Asteco. “For companies, it will ensure that the goods and services they have on offer are visible to all our Property Managers whom are working to service almost 500 managed properties across the UAE”.
With their details registered on the Vendor Portal these companies will be available for consideration for future RFPs and proposals required by building Owners, based on the areas they operate and services that they offer.
For Asteco it means that the entire process, from selection of suppliers through to award of contracts, is streamlined through a qualitative assessment of the Vendors submitted supporting documents and references, whilst also allowing there to be an increase in transparency across all our offices of the capability, professional qualifications, experience and prices secured for these services.
Developed by an internal team of programmers, the Vendor Portal compliments the Proprietary software platforms Asteco has already developed which includes, Property Management, HR and ERP platforms. “Whilst we have looked at purchasing software platforms from specialist providers, on many occasions we have found it more efficient to develop our own software rather than customising an existing platform”, said Stevens,”The Vendor Portal is a prime example of this, it has been built from the ground up based on the requirements of our users and we expect this to be a very beneficial tool for Asteco, Clients, Contractors and Consultants”.
To register on the Vendor Portal, suppliers should visit www. https://vendor.asteco.com
For more details, please visit www.asteco.com
Asteco provides support and influential input to the Dubai Land Department during the development and implementation of their software platform known as “Mollak” which is set to issue service charge invoices to jointly owned properties
The Dubai Land Department, DLD, through its regulatory arm Real Estate Regulatory Authority, RERA, launched a first-of-its-kind electronic system titled "Mollak" that incorporates innovations to ensure that justice and transparency are maintained.
The DLD prioritises customer satisfaction and happiness, in line with national strategies, and developed this system to help co-owned property owners and ensure smooth and easy operations with their property managers.
"Mollak" provides a new and integrated system to monitor accounts related to service charges in these projects by relying on the financial accounts operating according to the mechanism of the escrow account. The system operates across a range of stakeholders in managing co-owned properties. It also operates within the real estate unit owners’ database and the database of real estate units registered and approved by DLD, where no user may change the data.
Marwan bin Ghalita, CEO of RERA, said, "The Real Estate Relations Regulatory Department at RERA developed the work mechanism of this new system by relying on the competencies of citizens working at RERA to help disperse real estate knowledge through sustainable and modern electronic means in service of the real estate sector. As a customer-centric approach to its services, RERA committed a pilot phase with most management companies, financial auditors, and financial institutions for the programme before officially launching it in Q2 2019 to high acclaim."
Through the system, 468 bank accounts were successfully opened for project service charges, 88 management companies and 1,212 real estate projects were registered and approved by RERA as well as 200,000 real estate units, comprising residential apartments, villas, offices, and commercial shops. As a further consolidation of RERA’s emphasis on security and customer trust, it attracted seven banks to act as account trustees for co-owned properties and registered eight financial auditors to explicitly audit the application fees that were submitted for accreditation.
Bin Ghalita added, "Through the system, RERA seeks to increase the role of governance, regulation, and supervision as well as the participation of private sector specialists to increase real estate transparency and maintain the balance between real estate developers, management companies, and homeowners. This is to increase customer satisfaction and happiness in the services provided by RERA as well as facilitate the procedures of real estate unit owners when dealing with management companies and managing service-fee accounts."
Mohammed bin Hammad, Senior Director of the Real Estate Relations Regulatory Department at RERA, commented, "Thanks to the innovative new Mollak system, co-owned property projects will be managed with the utmost provision of high-quality services in line with the expectations of owners and residents. RERA’s registration of auditors and banks to monitor transactions in the system is evidence of its emphasis on security, regulation, and customer trust."
List of few publications of this article
The Dubai Land Department is considering a proposal on a no-rental hike provision for three years after the signing of a lease agreement between Landlord and Tenant.
“The Dispute Resolution Committee is studying such a proposal, but no decision has been taken on the ‘if and when’ to roll it out,” a spokesperson said. “Right now, all rental decisions are based on the Dubai Rent Index, and it will continue to be so until the three-year no-hike proposal is cleared."
Sharjah currently has a three-year cut-off on new contracts when it comes to rental increases.
It isn’t clear whether the proposal only extends to residential properties, or would cover all manner of real estate categories, including retail premises. If it becomes all-inclusive, this would have a huge bearing for the retail sector, whereby retailers have complained vociferously about how mall operators set and hike rents, even when market conditions do not dictate them.
But in the residential space, with rents in decline and expected to remain under pressure for some time, will a three-year no rise cap work? “The Dubai Rent Index has been working well in the neighbourhoods that it covers,” said John Stevens, Managing Director at Asteco, the property services firm. “In fact, it would work even better if the index was based on building by building rather than a neighbourhood.
“Because the Land Department has access to all rental transactions through Ejari, it would be easy for it to base the index even on a per building basis.
“But in a rental market that will see more oversupply for the next few years, is there a need for a three-year rental hike cap? More so, as the index has shown it is working well.”
Stevens reckons that while it is unlikely any neighbourhood in Dubai will see any form of rental increases this year, even in the Expo period of late 2020 and early 2021, only select locations in the emirate are likely to feel an upward pull.
Nasser Malalla Ganem, senior partner at the law firm of AM Associates, is another who doubts whether a rental hike cap and a rent index can coexist. “They are asymmetric even in the best of times,” he said. “The only reason I see for a change to three years is because the government wants to send a strong message to assure residents about future costs.
“Because right now, apart from having the Index, a landlord cannot increase rents for the first two years. That’s the standard and it’s been working well. But it’s a fact that the rental market continuously needs tweaking to ensure inflation pressures do not proliferate.”
As inventories across the property market rise, developers continue to look for ways to accelerate the offtake through various innovative schemes. The rent-to-own (RTO) model is one avenue that many developers are seriously considering and which is gaining some traction in certain segments.
“We have already witnessed several developers offering RTO schemes and I would anticipate that this trend will become more popular with developers while the market is in a softened state,” says Sean McCauley, CEO of DevMark, adding that RTO schemes give developers access to a wider buyer pool, which they would not normally achieve through their conventional offerings.
What is it?
Rent-to-own is a conditional agreement for a property comprising a rental and a future sale agreement, at a predetermined price and a defined time frame, explains Richard Paul, head of professional services and consultancy Middle East at Savills Dubai. “In most cases, as part of the agreement, a certain percentage of the rent is apportioned towards the down payment of the property. After the predefined time frame, the buyer has the option to either buy the property or exit the agreement,” he says.
RTO schemes were first introduced in Dubai in the early 2000s and they became most popular in 2010-11.
“Currently, only a handful of developers offer RTO schemes in Dubai, however, there are schemes being advertised in areas such as Dubailand, Motor City and Jumeirah Village Circle for periods of up to 20 years,” says McCauley.
Although still in its early stages in terms of reach and volume, the scheme has begun to re-emerge as a viable option for both buyers and sellers after the Dubai Land Department (DLD) launched the rent-to-own (Ijarah) service last year, allowing such deeds to be registered.
“The processes laid out by the Land Department will hopefully provide a clear legal structure to address many of the legal issues raised by RTO,” says John Stevens, managing director of Asteco Property Management.
RTO schemes usually have no down-payment
With supply steadily increasing in Dubai, Paul says it’s important for developers to come up with innovative schemes to remain competitive. “Along with the various extended payment plans currently being offered, RTO schemes allow developers to tap into a new buyer segment beyond the traditional investor base and reach out to potential end users in the market.”
McCauley notes that the average down payment for a UAE property is 30 per cent.
This comprises a 25 per cent deposit, a 4 per cent DLD registration fee and 1 per cent commission. The 25 per cent deposit is a requirement as per the UAE Central Bank, which means that the highest loan-to-value (LTV) percentage that an expat can get from a bank is 75 per cent.
“Many buyers may earn sufficient income to cover the mortgage repayments of the 75 per cent loan, but they may not necessarily have the 30 per cent cash saved up for the deposit and other fees,” says McCauley, adding that typical RTO schemes do not require a 30 per cent down payment.
With rental expenses accounting for a significant chunk of the cost of living, Farhad Azizi, CEO of Azizi Developments, says RTO is an ideal fit for long-term residents and investors in Dubai.
“The current market conditions are conducive to drive rent-to-own initiatives as these offer customers various options to buy a house in a financially feasible manner through affordable and convenient financial plans,” he says.
Will it make tenants homeowners?
The terms and conditions of the RTO agreement, however, will have to be looked into closely. McCauley says, “Conceptually yes, tenants would become homeowners upon expiration of the RTO contract, provided they have fulfilled all of their obligations under the agreement.”
And while RTO would essentially benefit a wide range of people, “the best candidates would be aspiring homeowners who earn good salaries but don’t have the adequate savings and cash reserves”, he adds.
Azizi says it’s a win-win for both parties involved since developers get to sell their current ready-to-move-in stock, while end users can afford to buy where they couldn’t before due to a lack of funds for down payment.
However, a possible barrier to many buyers would be the high premiums of RTO units available in Dubai, which according to Mahmoud Alburai, vice-president of the International Real Estate Federation of Arab Countries and a senior advisor with the Government of Dubai, can reach up to 40 per cent.
“Normally in other places we have a rent plus a 5-10 per cent premium,” says Alburai. “But in Dubai the premium is almost 40 per cent. To attract local demand, that premium needs to be brought down.”
What happens if a tenant defaults?
Liabilities at the end of the RTO agreement will depend upon the terms of the engagement. Paul says, “In some cases, the seller will have to reach out to other potential buyers if the option to purchase is not exercised.”
Stevens points out that the legal and regulatory structure surrounding RTO schemes needs to be created and released, “to protect the rights of the purchaser [tenant] and seller [developer]”.
He says purchasers need to be certain that the premium that they are paying is being held, probably in an escrow account, and being used for the intended purpose with their interests in the property as the “owner”, subject to conditions, no matter what the status of the developer may be in the future.
“Similarly, the developer needs to know that should the prospective purchasers default on their payments, they have the ability and right to take possession of the unit,” explains Stevens.
While the DLD has issued necessary guidelines and associated fees related to the registration, cancellation, financing and transfer of RTO contracts, the schemes that have been available to date have been developed individually.
Asteco recorded the delivery of nearly 15,000 residential units over the course of 2018, comprising 12,000 apartments and 2,750 villas. While Emiratis were the top investors among GCC nationals in Dubai's real estate market, investing over Dh11.5 billion, Indians followed next with Dh10.8 billion, British with Dh4.3 billion, Pakistanis with Dh2.8 billion and Jordanians with Dh1.5 billion.
These statistics were released in conjunction with the upcoming Dubai Property Festival which is organised by Dubai Land Department (DLD) from 26th to 28th March at Dubai World Trade Centre. According to the organisers of the show, the continued investments in Dubai’s real estate market indicate the robust growth of the sector.
Targeting participants including not just property developers but also brokers, lenders, mortgage providers, investors, and home buyers, Dubai Property Festival is a sales and purchase event that aims at attracting global investment into the UAE.
Reports suggest that looking ahead, a total of 96,000 units are currently scheduled to be completed before the end of 2020. According to Bayut, some of the top areas that offer the highest return on investment include International City (9.3 percent) Jumeirah Lake Tower (7.5 percent), Jumeirah Village Circle (7.3 percent), Dubai Marina (6.4 percent) and Downtown Dubai (5.4 percent).
“Considering the cautious approach taken by property developers, the property market in the UAE is set for a steady growth. In addition, the strategic initiatives introduced by the government including residency visa for up to 10 years will serve as a catalyst for positioning the country as a top destination for real estate investments,” said Dawood Al Shezawi of Dubai Property Festival Organizing Committee.
Dubai Property Festival (DPF), in partnership with the International Property Show (IPS) is the Middle East’s Biggest Property Sales Platform for local and international real estate markets. The show allows retail sale and purchases for both local and international properties. DPF is a mega property sales platform where exclusive deals to end-users and investors are offered for three days. It enables developers to sell their project offerings onsite at much lower prices, attractive to investors looking to explore from a wide range of properties. The 2018 event attracted 131 exhibitors from 30 countries, as well as 20,332 visitors and VIPs from 143 countries.
While demand remains popular in some of Dubai’s historically trendy areas like Dubai Marina, the popularity of more familial communities like Jumeirah Village Circle and the affordability of Arabian Ranches have increased searches in these areas. Property Finder’s data reveals that in 2018 the most searched areas for those looking to buy were Dubai Marina with over 1.3 million searches, Downtown Dubai with over 1 million searches and the Palm Jumeirah with nearly one million searches.
At the upcoming Dubai Property Festival, professionals of the industry will be presented with a never before incentive to boost the growth of the sector.
Developers in the UAE’s fastest growing freehold property market - Sharjah - could be looking to slow down the pace this year. Even if slightly.
In a tactical move, many of the bigger names are now focussed on reaching key construction milestones at their existing developments rather than keep pushing more property for sale in the offplan market. Market sources say it’s only natural after two years of high-profile launches that were met with unprecedented demand as Sharjah finally joined the freehold race.
The last thing anyone wants to hear in Sharjah’s real estate space is about looming oversupply worries. But about 192,000 plus residents are expected to move into the new freehold units entering the market between now and 2025, with the bulk of the handovers likely to happen in and around 2022, according to Asteco, the property services firm. The multi-phase “Tilal City” on its own could accommodate up to 65,000 residents by 2022.
In other words, that’s a whole lot of inventory developers will need to find buyers for.
In fact, developers there may be making pre-emptive moves — “Some master planned developments have been — or are in the process of — being scaled back, while others are progressing at a slow pace,” said John Stevens, Managing Director at Asteco. “This would cement the cautious approach developers are taking.
“We do not expect developers to keep the same pace as over the last two years, mainly due to the continuously bearish economic conditions and market sentiment.”
The most high-profile launch in the year to date was the “Nest”, a student housing scheme that the developer Arada is building within the “Aljada” master-development near University City. The developer has spiced up the offer by adding a rental guarantee of 10 per cent annually for five years after handover. Prices for a unit start from Dh310,000.
This is an instance of a developer testing demand for different types of property, and not being overly reliant on more plain-vanilla apartment blocks or villas. (Developers in Dubai as well as institutional funds will also be chasing prospects in student housing keenly, as this remains one category where significant demand already exists in pockets of the city.) Meanwhile, the developer behind the hugely ambitious Waterfront City project in Sharjah reckons that a lot of thinking needs doing ahead of any launch. But there are no doubts as to the longer term need for housing.
“Perhaps we have an excess of supply over demand,” said Shaikh Abdullah Al Shakrah, Chairman of Ajmal Makan. “But we are confident that recent (downward) price changes is a healthy one in any free market economy. And the declines have varied depending on the nature of the projects.
“But what’s most important is that Sharjah is still in need of quality developments unlike the other emirates. We have witnessed the launch of a few mixed-use projects recently — but I think they’re still not enough to meet demand.”
No one will dispute that — but the question is whether to launch now or hold off until the economy and the real estate market show more signs of a definitive upturn.
And if developers go the extra mile in offering something new, there are takers out there. The Alef Group confirmed that it has touched the 1,200 unit mark at its Dh3 billion Al Mamsha project in the Al Juraina area. It is being billed as “Sharjah’s first fully walkable community”.
“The first phase is likely to meet the set deadline of December 2020,” said Issa Ataya, Managing Director, in a statement. (This involves seven buildings and a further eight to be handed over in June 2021.) “More people now want to live in greener surroundings — Al Mamsha’s car-free community is an answer to their needs,” Ataya added. “We are highlighting this feature.”
So, if developers are confident enough about their project USPs, they can still put out more properties to sell — now. But if they do harbour doubts about what their launch timing should be, there is always a tomorrow.
Studies are on for the launch of a third phase at the Waterfront City in Sharjah.
The developer expects to do the “announcement soon”, according to Shaikh Abdullah Al Shakrah, Chairman of Ajmal Makan. “We have so far launched the Sun Island, which includes 321 luxury villas away from the hustle of the city. In the second phase, the Blue Bay Walk, there are six residential buildings.
“All construction related to the infrastructure and the island’s structure have been completed.”
With next week’s Dubai Property Festival at the Dubai World Trade Centre expected to attract more than 20,000 visitors, the emirate’s property market once again comes into focus. During the four-day festival from March 26-29, local and overseas buyers will be scrutinising various projects, looking closely at the plus points of the market: high yields of 7-10 per cent, great supply at hand and even better price points. In fact, the 2019 Middle East Real Estate Predictions report from Deloitte has estimated that the total number of residential units delivered in Dubai last year was between 15,000 and 20,000, and noted that long-term prospects beyond 2019 remain positive with continued population growth forecast.
So is this the right time for buyers to make a move?
“Before 2014 the property market used to be very expensive, with fewer unit options and hardly any attractive payment plans. Today the market is attractive and it gives a great opportunity for tenants to rethink their strategy,” says Mahmoud Alburai, vice-president of the International Real Estate Federation of Arab Countries and a senior advisor with the Government of Dubai. “If you cannot buy property now, you cannot buy after the Expo [2020 Dubai].”
And in this era of inducements and sweet deals, real estate experts advice that no matter how attractive the post-payments plans look in the market today, investors and end users should do their due diligence.
“Investors need to do their homework before buying,” says Alburai. “Check if you are dealing with a good developer who has a clean track record. Is he delivering quality products? Does he have a trust account?”
Inspections, hidden costs
The easiest way to confirm that a developer has registered themselves and the project is through Dubai’s Real Estate Regulatory Agency. “An escrow account will have been established to receive payments for off-plan projects and there are strict criteria on the release of funds. Inspecting property already delivered by a developer and assessing the quality of build and ease of upkeep are useful,” says Elaine Jones, executive chairman of Asteco Property Management.
Jones agrees that the mindset in the emirate is changing and residents are taking a long-term view on living in Dubai and understanding the benefits of owning versus renting. “If you are buying off-plan, location, quality of build and an understanding of the area in which the property is situated can lead toward assessing the [property’s] feasibility as an investment,” says Jones. “Too much stock being delivered in an area will impact the ability to lease or sell and the capital value. At the time of issue of the title deed, the owner should receive a unit site plan that clearly defines the unit size, which verifies the area calculation for service charge and car park.”
According to Alburai buyers have to read their contracts carefully and look for hidden costs. “Check whether all post-payment plans are mentioned in the contract and even the promise of a free service if the developer says so.”
The service charge is often not fully considered in off-plan purchases, but it directly affects an investor’s net yield and also gives an indication on the level of maintenance to expect, which can determine rent and leasability.
Talking of buying trends, Jones said that smaller units, such as studios, one-bedroom apartments and two- or three-bedroom town houses, tend to be the better investment options due to increased leasability, whereas larger units are often bought for self-use. “Established communities such Dubai Marina and Downtown Dubai are and will continue to be popular to investors and tenants as they provide convenience through the availability of retail and hospitality offerings, ease of access and public transport,” she says. “In contrast, new communities such as Dubai Hills and Dubai Creek Harbour have been popular investment opportunities and while it is difficult to predict the leasing demand on completion, we expect the units to be received well, given supporting facilities and infrastructure works are complete.”
Talking about rent-to-own schemes, Jones says there are extra fees that need to be factored into the calculation, such as the service charge, internal utility charges and decoration/maintenance cost. “Many of the sales that are happening at present are by clients who were tenants and see the opportunity to be owners for virtually the same cost,” she says.
But one of the main obstacles of the rent-to-own scheme, AlBurai explains, is the very high premium. “Normally in other places we have a normal rent plus a 5-10 percent premium,” he says. “But in Dubai the premium is almost 40 percent. To attract local demand, that premium needs to be brought down.”
Technologies are revolutionising the real estate sector globally, and the UAE has been making strides in adopting innovations. Many developers have boasted 3D virtual property tours and blockchain deployment for property contracts. “There is a huge emphasis on going increasingly paperless, and it is evident that proptech has gone beyond the cool factor to disrupt the status quo,” says John Stevens, managing director of Asteco. “It will ultimately result in positive gains regarding time, efficiencies, environmental impact and cost savings.” There are also initiatives to transform Dubai into one of the cities with the lowest carbon footprints in line with the Dubai Clean Energy Strategy 2050, Stevens adds.
And as developers work on building smart homes that are fully automated, allowing properties to be managed remotely, Stevens says there should be more focus on the systems that operate the buildings and communities of which these properties are a part of.
Paul Christodoulou, managing director of Gulf Sotheby’s International Realty, says many homes that use smart locks, smart doorbells, security systems and cleaning solutions have gone further with the use of such systems. He cites projects such as Al Fattan Crystal Towers in JBR, which uses optimised heating, ventilation and air conditioning (HVAC) to continuously read internal and external heat signatures while maintaining set temperatures.
“The HVAC optimisation system uses advanced software to control factors such as water flows, pump speeds and fan speeds,” says Christodoulou. “Then many of the luxury residential and commercial buildings use wireless intrusion detection systems using mobile transmitters and motion sensors making security a lot more seamless. Developers like Al Barari, Northacre and Sobha are merging sustainability and luxury when it comes to smart home systems, including lighting controls, motorised window shades, sensors, digital ballasts and LED drivers, all under a single pre-programmed software umbrella that can optimise a home’s power and heating efficiency by up to 25 per cent.”
Christodoulou believes these features used are only scratching the surface, as smart technologies can provide lower operating costs such as lower energy bills, improves health and productivity benefits for occupiers, assists with real-time surveillance and faster emergency response systems.
The technology will only help to pave more innovation opportunities with improved space design and tenant experience, Christodoulou says. This is achieved by using insights captured through smart devices and sensors on personal habits such as consumption, health stats, movement, etc.
Amine Housni, regional manager, Middle East, at Blueground, a hospitality-tech company, says the real estate industry has to adapt to the needs of a “new breed of consumer”.
“Not just in real estate but in other aspects of their lives, people expect products and services that are mobile-first,” says Housni. “This new breed of consumer has increased needs and interests and is highly interested in living an experience instead of only receiving a service. With this, there is a need to have the ability to come up with products and solutions that address customer pain points. [Technologies such as] a home assistant or an online handbook to always have access to more services are now key deliverables.”
Do you own a property or multiple properties in Dubai and want them to be managed? Are you an overseas investor and want to ensure that all regulatory items are taken care of, including scheduling of condition reports of the property, rental cheques, property maintenance management and sending out notices to tenants whenever required? The biggest benefit of having your property managed is definitely the peace of mind it gives the owner. Landlords can relax knowing that there is an impartial third party protecting their property, deposit and tenant. Property managers take care of the often time-consuming, day-to-day problems that may arise in the life cycle of a building.
From screening tenants and collecting documentation, to accompanied viewings with prospective tenants, collection and safe keeping of rental deposits, preparation of tenancy agreement and Ejari registration, rent collection and government compliance, managing a property can be a full-time job. Many landlords may live overseas in a different time zone or even if based locally, they can have incredibly busy schedules. A property manager is responsible for the smooth running of the property and contacts the landlord on specific occasions, for instance to give consent for maintenance works an update on the investment.
Maintaining a property inventory is the most important part of the property management service. It is a professional report recording the condition of the property. The property inventory protects the owner against damage on the investment and ensures that should there be any dispute on condition of the unit, there is a professional report that both parties can refer to.
To avoid vacant units
John Stevens, managing director and head of asset management department at Asteco Property Management, says in Dubai the main concern for landlords is to keep their units occupied and get the best rents possible. “We constant try and ensure that we have all units full at the highest possible rate, and for this we work with our own agents as well as other agents who are strong in a particular area in Dubai. We make sure that the unit is marketed well and information is circulated on all platforms. Also, when a tenant moves out, we inspect the property and ensure that it is not damaged before getting it re-rented again.”
Stevens says that even in a slow market, people are moving around and upgrading their lifestyles constantly. “Rents are a lot lower but if you are a smart landlord you will list your property at the right price to speed up the leasing process.” Along with right pricing Stevens also feels that it’s important for landlords to retain long-term tenants. “Once you’ve got a tenant in this market, it’s better not to let them leave. Give them a good service and make the terms of the tenancy attractive to them. Especially in the budget segment, tenants are a lot more price sensitive and they will move to another unit in order to ensure a savings of Dh2,000 to Dh3,000. But despite the tough market conditions, you will find a tenant in Dubai as people are constantly moving.”
For Anisha Sagar, head of property management at Allsopp and Allsopp, an average day would include looking into urgent maintenance work of the buildings she manages, checking the move-ins and move-outs that might take priority and the landlord cheques that need to be banked that day. “When there are units available for rent, we coordinate with the leasing agents to get ongoing updates on the search for a tenant and ensure that the landlord is up to date,” says Sagar. “We also carry out biyearly inspections on all managed properties. These include visual inspections, which are very thorough and we check the floor to the ceiling, internal and external aspects of the property. Fixtures and fittings are also checked along with appliances and overall condition of the entire property.”
Sagar also explains that in the case of a dispute between a landlord and tenant with regard to a security deposit, the property manager has to go through all of the move-in and move-out photographs with the inventory clerk to settle the dispute as fairly as possible. “My day also goes approving rental contracts and ensuring all contracts have been completed to the highest standard. This is extremely important as we need to ensure that our clients are signing contracts which are approved.”