A one-off rental deal to attract tenants into luxury flats in Dubai, which offered three months free rent, was snapped up by 40 clients before it expired last week, it was reported on Saturday.
The deal on the Golden Mile development on Palm Jumeirah developed by IFA Hotels and Resorts in partnership with Nakheel saw 15 month rental contracts on offer with the final three months free. The incentives were introduced to ensure that the apartments did not sit empty as a result of Dubai’s economic slowdown , which has hit the real estate sector hard, according to a report in UAE daily The National.
It mirrors a dramatic shift in the rental market in the emirate in the past six months that has seen rents dropping by more than one third, and 12 month cheaques becoming the norm, where as just a year ago the one cheaque rule was the usual way to do business.
“It was partly in response to the fact everyone is bringing down rents and also because in the first months of opening, there are going to be operational issues. In addition there are a lot of properties due to come onto the market,” said Stuart Cassidy of IFA Hotels and Resorts.
“Rather than having apartments sitting empty for several months, it seemed a better idea to aim for a higher occupancy and offer three months for free.There was quite a take-up. Before it was distinctly a landlord’s market, but times have changed,” he added.
Those taking up the deal saved between AED27,000 ($7,350) and AED93,750, depending on the size of the apartment, said IFA.
Rents for a one-bedroom flat, which are at least 410 square metres, start at AED108,000 a year – compared to one year ago when such shoreline apartment on the Palm would have been rented out at AED180,000., .
The first apartments on the Golden Mile will be handed over at the end of April, consisting of a total of 260 furnished and unfurnished apartments, IFA added.
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