Time to Move Into the Tenant’s Market

DUBAI - Cash-strapped tenants looking for new apartments here need not go begging to the bank for loans.

By Martin Croucher

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Published: Sat 21 Mar 2009, 1:32 AM

Last updated: Sun 5 Apr 2015, 8:30 PM

Instead of paying their full year’s rent up front, they can now pay in 12 cheques to property management companies. “No one who steps off the plane to live in Dubai can afford to pay a full year’s rent in one go,” said Mark Lane, Director of James & Co, a Dubai-based company that has just launched the monthly scheme.

Instead of the normal arrangement, James & Co are offering to pay the annual rent to the landlord in two cheques. Monthly instalments will then be paid by tenants to the company. “This is the only country in the world where landlords receive the whole year’s rent in just one cheque,” said Lane. “But now the market is changing. There are much more properties available and landlords realise they mustbe flexible.”

According to a recent report by Landmark Advisory, a Dubai-based research group, rents in the emirate are likely to drop 25 per cent across the board in 2009. Some areas such as the Springs and Discovery Gardens have already experienced a massive decline in rental average in the first few months ofthe year.

Lane said that the company will focus the majority of its business in the Springs, JBR and Marina areas. The company has so far taken on six customers, while it “tests the waters”, but there is enough liquidity to take on30-40 more.

The company draws its finances from Lane’s own personal investment and that of his business partner in the UK. True, there is a chance that tenants could flee the country, and cause the company a loss, but Lane is optimistic. “As a company we are at a slight risk,” he said. “If the tenants disappear, then we stand to lose around three month’s worth of rent.”

A little over 31,000 property units are expected to be ready this year, compared with 29,319 last year. Faced with more supply and a declining rental market, many landlords are being forced to become more flexible to attract tenants.

James & Co charges landlords 10 per cent of the annual rental contract for their services; however, Lane believes, given current circumstances, many would accept. “Last year may have been a landlord’s market,” he said. “But this year it is a tenant’s market.”


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