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The Impact of Dubai’s New Flexible Rental Instalments on Businesses

Kirsten Delcie January 21, 2021

There has never been a better time to make big business moves for your company in Dubai than now. This might seem like a strange thing to say in light of the global pandemic that has caused quite a bit havoc all around the world – but trust us, there is a silver lining in all of this.

What is happening?

Due to an oversupply in the commercial property sector of the real estate market combined with COVID-19’s negative impact on the economy, commercial landlords in the UAE are offering more flexible rent schedules in an attempt to retain tenants and a steady income.

This means that instead of the tight, rigid single block leasehold payments commonly found in the commercial real estate sector, an easy-pay rent schedule will be adopted to benefit both tenant and landlord. One-time annual rent cheques are expected to be done away with in favour of 12 monthly rental instalments.

What does this mean for businesses in Dubai?

The news of a more flexible rental agreement is sure to be celebrated by every business owner in the UAE. If your landlord is making allowances for rent payments 12 times a year, this could benefit your company in many ways, that include, but are not limited to:

1. Better cashflow:

The biggest benefit of a 12-payment rental schedule is that it will free up your business’ cashflow. Having to make one or two annual rental payments can be a huge financial drain. By breaking these payments up into equal monthly instalments, your company will find itself with a lot more money to make immediate changes or upgrades that will aid and grow your company’s profits, productivity and overall success.

2. Access to prime property:

We all know that the better the property, the more rent you’ll have to pay. With the single block leasehold payment method, it can be difficult for businesses to get access to the prime property in Dubai and the rest of the UAE. Having to make one payment upfront can be a bit too much for a company to handle. However, if the rent amount is broken down into equal monthly payments, a lot more businesses might find themselves able to afford a bigger and better office.

And we don’t have to tell you home integral a functional workplace and good work environment is to a company’s success.

3. Fit out upgrades:

A more flexible rental schedule will have a positive impact on a business’ cashflow. Meaning that more capital will be available to spend on changes and upgrades on your workplace to make it a more functional, stylish and happy office space.

The effects that a great fit out can have on a company’s success is well researched and documented. From biophilic elements and colour scheme to interior design and open-space floorplans, all of these fit out aspects lend a hand in increasing employee productivity, health and well-being which inevitably leads to an increase in success and profitability.

What should you do now?

This interesting turn of events is a welcomed surprise in a time that has been filled with mainly bad news. Ultimately, you, as a business owner, now have a bit more freedom to grow and expand your business without worrying about single block leasehold payments or not having a healthy cashflow.

If you are thinking about upgrading your commercial fit out with the extra cashflow you now possess, Contractors.Direct can help you in your endeavours. We specialise in connecting thoroughly-vetted, quality contractors with those who need their services. When you use us as your fit out partner, you will be provided with a Project Manager who will ensure that your project is delivered on time and on budget. Get in touch with us here.

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