COVID-19: State of the Occupier Update - Dubai

Virtually all office occupiers have been working from home since a full lockdown started on April 5th. Permits are now required to leave home once a day and are only granted for medical emergencies or to shop for food or medicines. Only one person is allowed in a car, and masks and gloves must always be worn. Some sectors are protected, such as healthcare, construction, delivery or maintenance, but they too must have a permit to move. All other external activities are banned, including walking and exercising.

Clients with ongoing projects have been asking about construction and fit-out timelines. These seem broadly unaffected except where materials and goods such as furniture are coming from overseas. Delivery times for office furniture have been delayed, and with Ramadan upcoming at the end of April, there may be a further slowdown in work rates.

OCCUPIERS?

Many occupiers are seeking rent relief or abatements from landlords.


LANDLORDS?

Most landlords are open to discussions on supporting tenants. However, we have yet to see landlords be more flexible on commercial terms for renewals or re-gears. This might follow if the lockdown extends beyond a few weeks.


DEVELOPERS / INVESTORS?

Some cash-rich investors continue to see opportunities for distressed assets; otherwise, most are adopting a wait-and-see approach.

There is opportunity for occupiers to negotiate temporary cashflow relief from some landlords in terms of payment restructuring or return of security deposits. Longer-term benefits could be renewals or re-gears taking advantage of an uncertain market to secure better commercial terms.

Contact us.