In the UAE, many real estate developers have announced rent relief and stimulus packages to support retail tenants and partners amidst the on-going COVID-19 crisis that is severely impacting businesses around the world.
While Abu Dhabi-based ALDAR has announced AED100 million as stimulus package, International Capital Trading (ICT) has also announced a series of initiatives aimed at supporting all tenants, partners and suppliers across its real estate portfolio. In Dubai, Al-Futtaim Group – portfolio including Dubai Festival City Mall and Festival Plaza – has announced a three-month rent-free period for retail tenants to ease the financial burden. Meanwhile, Dubai Holding and Meraas have announced AED1 billion as economic relief package to support existing partners across their portfolio.
In the wake of these developments we spoke to UAE-based retail groups to gauge their reactions towards the above moves.
“Whilst any rent relief and stimulus by landlords is welcome, it must be proportionate to already granted incentives. Many large groups already have huge incentives in place and those should be considered,” stated Mark Tesseyman, CEO, LIWA Trading Enterprises. “If mid and smaller groups are not supported to survive, there is a risk of many brands disappearing from certain shopping malls entirely. And this will create a very bland landscape with no differentiation from one mall to another.”
“We have to read the fine print of the rent relief (announced by Al-Futtaim), as they are evaluating ‘eligible tenants’ for this stimulus,” said Sajan Alex, vice president, Tablez Food Company. The company’s portfolio includes restaurants like Peppermill, Famous Dave’s that are present in Dubai Festival City, Festival Plaza as well as The Dubai Mall. “In the current situation, a lot of businesses are already bleeding. Think about it – alongside rent, we also have other fixed costs.”
Meanwhile, through comments on LinkedIn, Naim Maadad, chief executive and founder of Gates Hospitality hailed the move as “amazing” and a good initiative undertaken by landlords. “It is time for all stakeholders to shoulder their part of the survival equation and that doesn’t exclude anyone,” he said.
While Ishwar Chugani, managing director of Giordano Middle East called it “a step in the right direction.”