Contributes to rationalizing expenditures in light of the repercussions of "Corona"
Real estate developers: Investors in the office sector are turning to ownership as an alternative to rent
Owners put up their units for ownership with low investment returns.
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Real estate developers have reported that they have spotted a growing trend in the Dubai real estate market towards ownership in the office sector by investors as an alternative to rent.
For their part, investors, who switched from rent to ownership, said, "The goal is to provide wasted expenses that were set aside for rent, which contributed to rationalizing expenditures in light of the repercussions of (Corona)."
They emphasized that the price corrections in the market helped the shift from rent to ownership during the current period.
New office
In detail, the lawyer (S.A.), the owner of a law firm, said that she "moved from her old rented office to a new office in the Business Bay area, with the aim of saving expenses, especially in conjunction with obtaining a good offer from the owner of a tower in the area."
The engineer (Islam A.), the owner of a contracting company, added that “the company has moved its headquarters from a small office to a large office that occupies an entire floor in the tower itself, in which it works,” indicating that the owner of the tower offered them a good price for the new office, which is 760 dirhams. The foot, which is one of the vital towers in the Business Bay area, which helped us in the possibility of rationalizing expenses, by writing off the allocations that were avoided annually to pay the rent.
The owner of a printing and transactions company (M. Al-Kindy) said, "His motive is to go towards owning the office that he was renting, is to rationalize spending and benefit from the price correction in the market."
Corona crisis
On the other hand, the Director General of Marketing and Sales at Al-Rowad Real Estate Company, Alaa Masoud, said that «the (Corona) crisis has imposed some pressure on the office sector, as the volume of demand in the sales market has decreased due to the developments imposed by the crisis, most notably the reliance of many companies on mechanisms. Working from a distance », indicating that these factors had their effects on the real estate market trends in the office sector.
He pointed out that the most prominent of these trends is a shift of investors towards ownership, in conjunction with the price correction in the market and an alternative to rent, as they saw that ownership is better for them at this stage, especially with the presence of attractive offers, in addition to many owners offering their units for rent for ownership with low returns. Investment.
Real estate prices
In turn, the Chairman of the Board of Directors of "W Capital" real estate brokerage, Walid Al-Zarouni, said, "The prices of real estate in Dubai, during the present time, are attractive to buy, and within the reach of all companies," noting that some companies can own the property instead of renting it. Especially since the total rent of the property within four years, it is sufficient for companies to own a private office or headquarters in it.
Al-Zarouni stressed that the current market situation represents an opportunity for anyone who owns a trade and wants to strengthen his position in the market. The prices are appropriate and the sites are very attractive. These opportunities must be exploited that may not be repeated often.
He stated that this approach is better for company owners and has many advantages, such as avoiding increasing the rent annually, in addition to having the office giving companies sufficient flexibility and encouraging spending for office equipment, in contrast to concerns for leasing companies, which are cautious about any operational expenses on the headquarters, because After a year or two, the landlord could increase the rent or force the tenant to leave the office.
He pointed out that owning offices is in the interest of companies in terms of reducing costs on the one hand, while if the company wants to liquidate its business, it can then take advantage of the office and re-rent it to become a source of additional income for it.
For his part, the CEO of Harbor Real Estate, Muhannad Al-Wadi, said that “the office sector is going through a difficult period due to the repercussions of the (Corona) crisis, due to the new method imposed by the virus, including working remotely, which reduced the demand for office space. », Pointing out that the market, in conjunction with these data, has shown trends by the investor and the developer, as these pressures contributed to many developers offering good offers on office real estate, which the investors benefited from by moving to own their offices and provide values The rent that is paid annually.
In the same context, Dana Selbak, head of research at JLL Middle East and North Africa, said: “There are trends in the real estate market now towards owning a business, which is an increasing trend,” noting that this trend has increased more in the (B) categories. And for the medium and small company, and its model is widespread in some areas, including the Business Bay and the city center, as for the (A) category that foreign companies desire, which prefer leasing over ownership, and its model is widespread in the Dubai International Financial Center.
Timing is convenient
The Vice President of the International Union of Arab Realtors, Dr. Mahmoud Al-Burai, said, “This is an appropriate time for companies to own their offices with the correction in the market, but the health crisis that we are about may make the choices of companies governed by the situation of the epidemic in the future, and whether large or small areas are required , Especially in conjunction with the continuation of remote work ».
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