Leading real estate advisor Savills said the announcement of the economic stimulus package for Dubai Free Zones, under the directive of Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, will help to ease the burden on corporate tenants.
The recent announcement will include postponement of rent payments for up to 6 months, facilitating financial payments through monthly instalments, refunding insurance and guarantees (such as tenant deposits), cancelling certain business penalties for companies and individuals and allowing intra-corporate transfer of labour between companies and sectors operating in free zones.
Lauding the Dubai Free Zones move, Paula Walshe, the Head of International Corporate Services, at Savills, said: "This is a very positive and welcome initiative, which will give tenants clear breathing space, and the ability to take a longer term view on business forecasts. Primarily, it helps to reduce immediate costs to maintain business continuity and preserve jobs."
Dubai Free Zones has around 45,000 companies and 390,000 employees, accounting for approximately a third of Dubai’s GDP.
Walshe said the refunding of security deposits and restructuring payments will improve liquidity for businesses located in the free zones and reduce the financial burden, particularly on SMEs.
"While these steps apply to occupiers in free zone-owned buildings, it will be interesting to see if this is mirrored by private landlords. We have seen a trend in recent years for Dubai landlords to work collaboratively with tenants to find solutions, which has really helped to secure business longevity," she stated.
"It’s an uncertain time, but Dubai government is setting an exemplary standard for the commercial real estate market," she added.-TradeArabia News Service