Landlords' current mentalities will end up "ruining people's lives", according to Samer Hamadeh, who is behind concepts Stereo Arcade and Akiba Dori
Dubai is seeing a high number of restaurant closures due to a “short-sighted” approach by landlords who request high turnover rent from F&B tenants, according to the founder and managing partner of nightlife and restaurant management company Aegis Hospitality, which operates concepts like Stereo Arcade and Akiba Dori.
Speaking to Arabian Business, Samer Hamadeh said landlords’ current attitudes will end up “ruining people’s lives” as the market sees many F&B businesses shut down.
“We’re seeing the result of this short-sighted approach to dealing with tenants in the staggering number of restaurant closures. The turnover rent concept is going to be a thing of the past soon if my sources are correct, but that still doesn’t change the fact that very few landlords treat tenants as partners - this mentality is going to end up ruining people’s lives; not just businesses,” Hamadeh said.
“If we can’t recognise that the livelihood of people is as important (if not more) as a landlord’s return on investment, then we have a fundamental problem in the system,” he added.
Hamadeh’s comments come shortly after Spero Panagakis, the co-founder of DIFC restaurant BB Social Dining, said landlords in Dubai are demanding F&B tenants to pay the “highest price possible” for rent, as well as up to 15 percent in turnover rent.
“Landlords need to be more flexible with their tenants and should be working together to support the communities. They are still striving for the highest price possible…We are one of the only regions in the world still paying by cheque and also paying quarterly in advance, which puts too much pressure on cash flow,” Panagakis said.
At least a dozen restaurants and bars including The Agency, China Grill and Cocktail Kitchen closed down in Dubai in 2018 amid an increasingly competitive F&B market.
But Hamadeh says it’s “never too late” for landlords to change their mentality and help boost the overall market.
“Some people say it’s too late and the industry is doomed; I politely disagree - it’s never too late to do the right thing and put the well-being of people above business during difficult times so that we all thrive together in good times,” he said.