How UAE Landlords Are Adapting to a Changing Rental Market

**Tim Elliott** (0:00)
Mario Volpi is with me, one of the regular voices on the Dubai Property Podcast, weekly columnist in the national newspaper, senior manager at EVA Real Estate. Mario, thanks for being here. There was another thing I wanted to talk to you about, just before we get to kind of the main meat of today, and it is this, we were talking, we talked in the last couple of weeks about the situation in Abu Dhabi, the rent freeze situation. I wanted to just talk to you about this article, this was Colleged Times earlier this week, I think it was, it may have been yesterday, the day before.
Just with an update here, property owners, this is kind of the headline, prioritizing tenant retention and occupancy through flexible leasing. I don't quite know what flexible leasing means, but people having to offer a little bit more, a few incentives, bits and pieces, rather than, you know, we're not looking at the rent increases, obviously.

**Mario Volpi** (0:55)
No, that's right, and I think this is the tail of the tape now, not just for Abu Dhabi, it's also for Dubai, because Dubai followed suit with what they call flexi rent. That was their tagline as well. So it's the same kind of thing. Yeah, look, tenants are, I said earlier, tenants vote with their feet. They're looking for value for money now.
Now, the beauty is that no landlord can actually increase the rent, but to retain a good tenant is worth their weight in gold. And so if some other properties are coming on at, dare I say, better value, then to keep your tenant to renew with you, you have to offer potentially better terms. And by that, people are offering sort of, pay for 12 and get 13 months, get a free month. Some people are adding in that they've, the landlord has paid for a maintenance agreement or a service agreement, so should anything go wrong, you don't have this merry dance between you and the landlord, it's my responsibility, it's your responsibility. Basically, the insurance kind of pays for it. So again, that's peace of mind.
And obviously, here in Dubai, it's the number of checks now that is coming into play, and more so, but it's interesting to see just how many landlords still, despite this headline, because you're reading the headline, which will be the minority. I'll tell you that now. Not all landlords are offering these benefits, because the landscape isn't quite so stacked up that it is 100% a tenants market.
There are still these landlords who insist on a low number of checks, you know, I'm only taking one or two, and have rejected a four-check payment. And again, this is where, and I was talking to some of my agents, they've got to educate the public that whilst it's your choice, what you ask for as a landlord in terms of the number of checks, it will have a detrimental effect on you when the government is, or the land department, should I say, is advertising the fact that a 12-check payment is actually going to become the norm. And whilst we're at the infancy of this all, some landlords are burying their heads in the sand and saying no, and then missing out because buyers, sorry, tenants are saying, well, you know, if you're not going to do that, I'll just look at something else. Because there's lots available, the availability definitely is there. When I was looking myself, I mean, in one day, I saw about nine or ten units because the agent had lots of access to lots of units. And after a while, one sort of merges into the other and you forget what you've seen. So I was able to take videos and come back and sort of, oh, yeah, that had that and that had this. But what I'm trying to say is the choice is there. And that's also not going away anytime soon. So the rental market definitely is favoring tenants at the moment. And, you know, if tenants can suggest perhaps to the agent and or the landlord that these schemes are there, then perhaps they can also get better payment terms if the landlord hasn't volunteered it. But your story here is that they are. They're offering these benefits literally just to retain people and perhaps attract others should the current incumbent actually leave.

**Tim Elliott** (4:37)
Yeah, I mean, as you say, it is limited, I think. But, you know, people want to sell what they've got. We've also got a situation where property management firms are kind of scrambling to overhaul automated renewals. So and to strip out those annual, if there are annual escalation clauses in there, they've got to get rid of those.