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Abu Dhabi, UAETuesday 11 December 2018

'We negotiated our rent down in Abu Dhabi'

Three tenants reveal how they secured a better deal with their landlords on existing contracts

Svetlana Deshais negotiated a Dh25,000 discount on her Abu Dhabi villa.  Pawan Singh / The National 
Svetlana Deshais negotiated a Dh25,000 discount on her Abu Dhabi villa.  Pawan Singh / The National 

When it comes to getting your landlord to reduce your rent these days, it appears all you have to do is ask.

With more supply, property deals widely advertised and residents in compounds and apartment buildings able to communicate via social media what they are paying, those in the industry say the UAE has shifted to a renter’s market.

That means tenants in a variety of financial categories are increasingly able to negotiate with their landlords, securing reductions as well as extras including one or two months of free rent, multiple cheque options and even retail vouchers.

“The market is not in freefall,” says Harry Tregoning, managing partner, Tregoning Property in Dubai. “They’re being more realistic. The market is maturing, which is good for the consumer because there’s more choice.”

In Abu Dhabi, landlords are showing increased flexibility in terms of negotiating with tenants, as well as in how they pay.

Reem Island’s Marina Square development, for example, is advertising on Facebook for 12 cheque payments. However those annual rents are usually slightly higher, says Ben Crompton, managing partner of Crompton Partners Abu Dhabi.

“If people are coming here new with certain types of jobs, that’s very attractive, otherwise they’d have to get a loan,” he says, adding “it’s particularly attractive for people who are self-employed”.

In Dubai, where rents have fallen 15 to 20 per cent in the last two years, says Mr Tregoning, who specialises in villas, there has been a notable population dispersal as new developments have come online.

Those include Mira Oasis, Jumeirah Village Triangle, Arabian Ranches 2 and Dubai Hills, which are all starting to fill up.

“On the back of that it means there’s been a bit of a vacuum because there’s more choice,” he said. “Basically when supply increases, demand falls.”

Mr Tregoning used the example of a four bedroom plus office villa in Jumeirah 3 that one company is promoting on Facebook: a year ago it listed for Dh290,000 per year; six months ago the price had dropped to Dh210,00 and it is now listed at Dh190,000 – plus one month free.

“That’s good value,” Mr Tregoning says.

The willingness to negotiate by landlords – or otherwise face empty apartments – still depends on whether owners have a mortgage to pay or not, says Mr Tregoning.

In Abu Dhabi, Mr Crompton says some landlords are offering one or two months free rent, while others tack on retail vouchers and pick up broker fees.

Mr Crompton believes that people seeking rent reductions would have more luck from individual landlords, because they have a mortgage to pay and don’t want to see their units empty.

“If you have an institutional landlord, large bank, property owners, they are less sensitive to a reduction in cash flow,” he says. “So they can be a bit more aggressive on their requirements.”

Here, three Abu Dhabi tenants reveal how they secured a better deal:

When it came to the renewal this year, Ms Deshais says the landlord asked for Dh295,000.  Pawan Singh / The National 
When it came to the renewal this year, Ms Deshais says the landlord asked for Dh295,000.  Pawan Singh / The National 

Svetia Deshais, 37, mother-of-three and a financial adviser from Slovakia

Rent reduction: Dh25,000

This year Svetia Deshais and her husband decided that they had reached a limit with the rising rent on their upscale, four-bedroom plus maid’s room villa on the mid-outskirts of Abu Dhabi. The rent had gradually risen from Dh275,000 in 2014 to Dh290,000 last year. When it came time for renewal, their landlord came forward with a Dh5,000 increase, bringing the total to Dh295,000.

“We were like, 'no, we cannot',” she says. “It’s just not going to happen.”

After scouting the advertised price of similar, empty villas on her compound, and comparabl sized villas on nearby compounds, and speaking to neighbours who were paying Dh265,000 for the same size villa, Ms Deshais put together an email asking for a decrease.

It included links to other, advertised properties, news stories about rents in Abu Dhabi falling to the tune of 12 per cent last year, heading into this year, and referencing the reduced amenities, in the form of a local cafe and corner shop that have both closed since they moved in. In the end the landlord came back with Dh265,000.

“Just be prepared and have some good supporting material, rather than just ask for a price,” advises Ms Deshais, who also runs a Facebook group called Money Doctor and helps other people negotiate their rents. “If you have supporting material and are constructive, I think they are pretty flexible.”

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Rizik Al Shalabi secured a Dh20,000 reduction for his apartment in Abu Dhabi. Pawan Singh / The National 
Rizik Al Shalabi secured a Dh20,000 reduction for his apartment in Abu Dhabi. Pawan Singh / The National 

Rizik Al Shalabi, 33, who works in sales, from Jordan

Rent reduction: Dh20,000

Rizik Al Shalabi moved to the UAE from Jordan with his parents in 1995 and they have lived in their two-bedroom apartment on Najda Street for five years. The apartment complex, which is less than a decade old, is operated by a commercial bank on behalf of the owners.

The family initially paid Dh90,000 per year, a rate that rose annually until it hit Dh105,000 last year.

Knowing that rents were falling and gauging the vacancies in the building, when it came time to renew, Al Shalabi knew his family was in a position to ask for a reduction.

“It was really getting empty, like each floor has four flats and on our floor it was only us,” he says.

“We sent an email when it was renewal time to the bank to reduce the rent,” says Al Shalabi. “So they sent us an approval and said ‘OK, it will be Dh85,000’. We were really surprised that they agreed on Dh85,000 because we never expected the rent would go down for such a building in Abu Dhabi."

Al Shalabi, who has been pleased with the way the company runs his building, believes renting from a large company or bank is a great way to save money these days.

Bucking the experience of Mr Crompton who believes deals might be easier to come by from individual landlords than institutions, Mr Al Shalabi argues that not only are there no estate agent fees to pay, “they have so many buildings to run, and they cannot just keep those buildings empty”.

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Dell Celeridad was thrilled with a Dh5,500 reduction in rent for her Abu Dhabi home. Pawan Singh / The National 
Dell Celeridad was thrilled with a Dh5,500 reduction in rent for her Abu Dhabi home. Pawan Singh / The National 

Dell Celeridad, 47, fitness studio manager, from the Philippines

Rent reduction: Dh5,500

Dell Celeridad and her husband are in their third year of living in a studio in the Bain al Jessrain area near Abu Dhabi's Maqta Bridge, paying Dh43,000 last year. They had heard about rents dropping and were considering moving if they could not get a reduction.

After calling the rental office, “I kind of got a feeling they were going to settle for Dh40,000”, says Ms Celeridad, who manages a ladies fitness studio while her husband works at Etihad Airways.

Figuring that she could get them to go even lower, Ms Celeridad created some negotiating room by suggesting Dh35,000. She penned a compelling letter suggesting she and her husband may be forced to move if they could not get a reduction.

“I just said with the financial constraints the expats are experiencing right now, the reduced allowances and everything… ‘we appeal to your compassion and your good heart, you’re one of the most reliable’,” she said. “It matters how you speak with them, you don’t just ask them for a discount. So I think they liked the letter. Within the following day they said ‘we value your business with us’ and they offered us Dh37,500.”

Ms Celeridad advises other renters to remember that because real estate companies are unlikely to proactively offer rent reductions, “you have to ask”.

Tips for securing lower rent

Do it in writing

Svetia Deshais, Dell Celeridad and Rizik Al Shalabi all sent emails to their landlords asking for rent reductions with varying degrees of detail. That enabled them to be clear, polite and concise, and provided breathing room should they need to negotiate, as Ms Celeridad did successfully.

Aim for lower than you want

Think of an amount you want and shoot for several thousand dirhams below, to give yourself some wiggle room. “It’s worth a try to negotiate politely, put it in writing and don’t think of the negatives first,” says Ms Celeridad. “You cross it when you get there.”

Do your research

Write an email that includes links to other, comparable properties and deals other companies are offering, advises Mr Deshais. Talk to your neighbours and note the empty properties around you to get a sense of your negotiating power. Ms Deshais says some villas around her home had been empty for months.

Ask for extras

A month or two of free rent is an increasingly common offering for new renters, so it’s worth it to ask when renewing. If there is something else the landlord can offer, for example included utilities – which Ms Celeridad has at her studio – or a new paint job, it’s worth it to ask.

Consider the costs of moving

Briton Tom Shorrock, 37, who works in education, considered a move but ultimately decided he and his wife should stay in their accommodation. In addition to the expense and hassle of moving, as a long time expatriate, he worried about the possibility of having his new rent hiked after just one year. “Rents are going down and it’s a fantastic thing,” he says, “but there is nothing to protect you.”