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Financing a commercial property through a loan can be challenging, with most people, therefore, opting to pay for their property in cash or through other financing options. With that being said, a commercial loan is possible and is a completely legitimate way of purchasing your property. Before deciding to apply, there are some aspects of this type of loan that individuals should know. Commercial loan rates are highly variableWhilst interest rates on commercial properties are generally higher than that of a typical loan, they are also highly dependent on the client’s personal circumstances as well as the property that they wish to secure a loan on. Individuals should also be aware that there can be hefty prepayment penalties if you are in a circumstance to repay your commercial property loan before its completed term. As such careful thought should be made about creating reasonable timeframes for your loan repayment, factoring in both high-interest rates and prepayment penalties.Certain factors that can come into play include the property developer, the age of the property, as well as whether the property is going to be used as an investment or if it’s for the client’s company. The loan to value rate should also be taken into consideration, as for commercial properties, they can be very low, with most banks generally requiring a 40% down payment. Study the market Before deciding on purchasing a commercial property, individuals should study the market carefully. Firstly, you should understand what type of property you want. The commercial property encompasses a wide range of building and property types, including office space, warehouses, retail units, or even purpose built properties such as schools or hospitals. Potential buyers should carefully consider the reasons for choosing a commercial property. Will you be the end user or are you planning on using the property as an investment opportunity. It is important to also research different locations and compare average prices. This can be done by looking at commercial real estate market reports or by discussing them with a commercial property specialist. Before starting any finance application, you should determine what you are willing to pay and how much you are willing or able to part with in terms of loan repayments. This may also help decide what type of property and areas are available for you to purchase into. Find a broker experienced with commercial real estateA broker experienced in commercial real estate will help their client evaluate their different options, help them make an informed decision about what they should purchase as well as applying for a pre-approval on your behalf with the bank. Not only would an experienced broker ensure a faster application process with the bank, but will have much greater negotiating and bargaining power when it comes to discussing the terms of the loan. Inform the bank of your choice Once you have secured pre-approval with your mortgage broker,  and decided on a property, the bank will then perform a valuation of the property and decide if it is worth the price you have agreed. Provided the bank approves, you will then get an offer letter to accept the loan and you can proceed with purchasing your commercial property. If you have any other questions or queries about getting a commercial loan, then contact one of our expert advisors, who will be able to talk you through the entire process and make it as smooth and seamless as possible.    

When thinking about investing in property, people’s mind generally goes straight to villas and apartments. With that being said, investors are increasingly turning to commercial real estate which is becoming a more viable option for potential buyers. Whilst commercial and residential are both types of property, there are several key differences between them. Investment in either necessitates a solid understanding of the nuanced market factors at work, the differences in financing requirements, property management options, leasing arrangements, and a good understanding of the associated risks and drawbacks. Property types Commercial property generally refers to all real estate that is used for business or commercial purposes. This encompasses everything from office space to retail units as well as specialised property such as hotel apartments, industrial warehouses, or any other establishment where a company operates or is used to generate income. With commercial property encompassing a wide range of unit types, each with its own capabilities and benefits, it is important to understand the difference between them as well as how they can each generate an income. Office space, for instance, will generate revenue and be priced differently to a warehouse or retail unit of a similar size. Different premises require different licenses; as such, it is essential to know what type of property you wish to buy and lease, the necessary licensing it requires, as well as understand the rental possibilities for that unit. Financing Securing a commercial loan is significantly different than a residential mortgage. Commercial units tend to require a more extensive initial investment not just because they are more expensive and have higher market entry points but also because they can be harder to finance. In general, it is easier to get a residential mortgage than a commercial property loan. The loan to value rate should also be taken into consideration, as for commercial properties, they can be very low, with most banks generally requiring at least a 40% down payment. Investors should also take into account that interest rates on commercial properties are generally higher than that of a personal loan or mortgage. Whilst financing a commercial property is certainly possible, this option should be thought of carefully if your purchase is intended to be an investment opportunity. Property value The market price of a residential property is generally determined through supply and demand as well as the key property features, i.e. the number of bedrooms, bathrooms, and the amount of living space. However, determining the value of a commercial property is very different. While location and property features play a role, the primary determinant of a commercial property’s value is calculated by looking at the amount of revenue it can/will generate. As such, it can be easier to increase the value of commercial premises by making strategic decisions that will increase the amount of income the property can make. This might involve subdividing or enlarging the unit, improving the properties appearance, or changing its use, i.e. changing a unit designed as a supermarket into a restaurant. Rental income Another key difference between commercial and residential real estate is the differences in rent, both in terms of the amount, as well as how it is structured. Rent for residential properties is agreed at a set amount and is paid at set times, i.e. monthly. Rent for commercial property, on the other hand, can be handled in different ways. The first is the most simple, a fixed rent for a specified number of years. Another way that rent can be structured, is through a smaller fixed rent plus a percentage of turnover. This can be a lucrative option, although the landlord should do their due diligence and be confident of the tenant’s performance financially.  Investors will generally find that commercial properties will have a better ROI as rental yields tend to be a lot higher.Financial security Another key difference between residential and commercial properties relates to the length of the leasing contract. Commercial real estate generally enjoys much longer lease terms. While a contract for a residential unit tends to lasts a year, companies can sign a leasing agreement for up to 3-5 years at a time. This allows investors with greater security, with a guaranteed income for a longer period of time. The flip side to this, is that commercial properties can also have much greater vacancy periods. While residential properties may only take a matter of weeks to be rented out, commercial properties can potentially take up to a year or more, which is why tenanted properties can sell at a much higher price than vacant ones. This is something that should be taken into account when considering investing in a property.Commercial property is more elastic, meaning they are very price sensitive to market conditions. Potential buyers should be aware that residential property generally performs more consistently during economic downturns, whilst retail units and off plan properties are usually the first property types to suffer. With that being said, with residential properties being relatively inelastic, it can take longer for investors to get the same returns. Following the 2008 market crash, it took a long time for the residential property market to fully recover. With commercial property, there tends to be larger fluctuations in market prices and trends, such as the increasing prevalence of e-commerce which has had an impact on commercial property prices. Although this trend may result in a shift in demand for retail units, it is causing a surge in demand for other types of commercial properties. Compared to traditional brick and mortar stores, e-commerce is a more labour intensive process requiring more warehouse space, which may signal a trend towards more logistics based commercial spaces. We have also seen that with the increasing trend of working from home, commercial office space is heading more towards more premium units in higher quality and more strategic locations, with an added focus on employee satisfaction. This demonstrates that commercial property is a solid investment option, so long as the buyer looks at the current market conditions and makes an informed decision about where and how to invest. (Take a look at our 2021 Q1 report which provides a more in depth insight into the current market trends).  Tenant behaviourWith commercial property, landlords deal with a company rather than an individual. As such the relationships tend to be more professional, with both parties seeing the process as more transactional. With business being the primary objective of both parties, it can make the relationships more efficient. What’s more, commercial landlords tend to have more protection under the law if the tenant fails to meet their contractual obligations, giving the landlord an added layer of security.Residential real estate can typically be considered higher maintenance and more hands on than commercial properties, and as such commercial properties are generally easier to manage. In a commercial property, day to day maintenance issues are usually handled by the tenant. Further to this, companies typically operate normal working hours, and as such any issues that may arise with the property is handled within a working week and during the day. With residential, on the other hand, landlords can expect to be called at any time on any day.  This is definitely something to consider if you are aiming to make property investment a primary income stream or if you are planning on buying multiple units. If dealing with multiple residential properties, investors may want to consider employing a property management company to deal with maintenance issues, something that may not be required for commercial properties. A commercial property investment may seem like an intimidating prospect, however the rewards can outweigh the risks. Whilst it is important to understand that investing in commercial property is not the same as investing in residential, both have risks and benefits associated with them. Before deciding to make an investment in commercial real estate, it would be a good idea to sit down with an experienced commercial broker or specialists in commercial property investment. A good broker will talk you through your different options and aid you through the buying process. For more information about property investments, please contact our team or check our properties available for sale.  

With work taking up such a big part of our lives, it is important that we find a space that we enjoy and can be our most productive. With the rise of smaller companies and freelancers coming to Dubai, so is the popularity of coworking spaces. As such, some of these spaces are going the extra mile to stand out from the crowd. Here are our top picks for coworking spaces in Dubai. NasabNasab is a luxurious, members-only workspace that has a focus on creativity and wellbeing. This high-end business club features a gym, two swimming pools, a photography studio and a variety of food and beverage outlets, which help to ensure a relaxing and luxurious work experience, allowing leisure and work to intertwine. Nasab also hosts regular events, workshops and discussions that help foster a collaborative and social environment, perfect for learning, networking and meeting like-minded people.  A4 Alserkal AvenueA4 is a free to use co-working space in the centre of Dubai’s trendy and artsy Alserkal avenue, with an industrial, yet warm aesthetic. The cosy space offers free wifi, a cinema room, a cafe and a little hideaway on the mezzanine floor called The Loft, perfect for tucking yourself away when you need a break and read a book. This space is perfect to meet and get inspired by other creatives, with the venue putting large effort into giving the place a community spirit, with collaborative work encouraged.  Space is also host to regular workshops, and brainstorming sessions.  Youth Hub XYouth hub came about due to the idea that young people are able to develop and design problems to the world’s biggest challenges. It was therefore decided to create a central forum for them to connect with each other and share ideas. As such it offers a supportive business environment and coworking space for younger entrepreneurs and business owners. Targeted at 15-35 year olds, the hub offers not only space for its clients to work, but also constant guidance and business support. DTECDTEC is a technology and innovation hub that offers clients not only a space to work, but a whole range of business amenities, including wifi, meeting rooms, and even a games room. The space offers full business set up, visa processing as well as access to a vast network of mentors, advisers, and educators, with many receptive to collaboration, pitches and investment opportunities. The hub offers Flexi desk, fixed desk and private office options for their clients, at varying different price points, as well as options to book out conference and meeting rooms. DTEC has everything a budding entrepreneur or business owner will need to launch and grow their business  

The UAE and the rest of the world faced a tumultuous year in 2020 as everyone struggled in the face of the coronavirus, and both the health and economic adversities it brought. Dubai saw an economic decline in 2020, with both oil and non-oil sector GDP declining in real terms, however, the rate of decline reduced towards the end of the year. The UAE, like other GCC countries, faced both sharply lower than expected oil revenue in 2020 in addition to the impact of the coronavirus on the non-oil sectors. Due to the global lockdown demand for oil dropped dramatically, meaning cuts in oil production were necessary. With that being said, the price of oil did increase and stabilise throughout the second half of 2020, with price starting to rise again by the end of the year. Oil prices saw a sharp increase in 2021, providing a positive outlook for the economy. ADNOC will spend $122 billion over the next five years to help boost its capacity to 5 million barrels a day by 2030 from around 4 million now. Last year, the UAE was at odds with OPEC, arguing against the steep cuts to oil production.  Despite this, Abu Dhabi is taking the initiative and working through the downturn to expand its ability to pump crude oil,  with the Emirate announcing earlier on in the year that they have awarded Japan’s Cosmo Energy Holdings Co. the right to explore for offshore oil and natural gas as the UAE seeks to expand its output capacity. Yet despite these promising outlooks, it has been said that it is unlikely that oil activities will be able to return to pre-pandemic levels for 2 years at least. The pandemic significantly impacted the real estate market in Dubai, which was disrupted with the lockdowns, restrictions, and the growing trend of working from home. Recovery in the commercial market was slightly slower compared to residential real estate, but it has also enjoyed a boom towards the end of the year. The fact that the total value of commercial units has decreased will likely mean that investors looking to take advantage of the economic situation will make 2021 a good year in terms of the number of transactions. This can be seen from the fact that despite buyer leads seeing a year on year increase of 79% throughout 2020, this was not reflected in the number of transactions. This might indicate a growing interest in purchasing a commercial property, with buyers waiting for 2021 to see what happens in terms of the economic situation. Whilst it is undoubtedly true that the UAE and the rest of the world will need time to recover from the unprecedented events of 2020, from the onset of the pandemic, the UAE Government took great strides in monitoring market conditions and went to great lengths to ensure a quick resumption of economic activity. The UAE introduced a strict lockdown in March of last year in the interest of public safety. Whilst the decisive measures by the government last year meant business activity was strictly limited, during the period between March and October this year, the Government of Dubai launched four stimulus packages worth Dh6.8 billion to mitigate the impact of these measures and to reduce any repercussions in the form of job losses or disruptions to businesses.In late 2020, we saw the government introduce a number of new laws that promoted the country as a pro-business environment with Dubai ranking third in the latest Global Cities of the Future list compiled by FDI Intelligence, which measured foreign direct investment flows across the world. From announcing that foreign nationals can now have 100% business ownership to the introduction of work from home visas that allow expats working abroad to live and work in Dubai, it is clear that the government is going to great lengths in cultivating an attractive location for businesses. Another initiative that the government launched was the Virtual Company Licence, which allows global businesses to access a regulated e-commerce platform populated by Dubai-based companies, while also exploring new markets and investment opportunities digitally. The introduction of trade relations with Qatar and Israel will also open the doors to new markets and will continue to encourage business and trade. Whilst it is too early to tell about the success of these initiatives, 2021 had a promising start in terms of business, with a 9% year on year increase in the number of business licences issued by DED. January also saw Dubai’s private sector returning for the first time in 12 months particularly at the entry level, as companies expressed optimism toward future business. With UAE’s fast rollout of the Coronavirus vaccine, the launch of Dubai Expo expected later in the year, as well as the country’s economy looking to grow 1.3%, according to the IMF  this renewed business activity looks to be just the start of a successful year for the UAE.  

 A coworking space, in essence, is a collaborative working environment, wherein freelancers, small companies, or start-ups are able to work independent of each other, whilst being able to share the same services. Types of coworking spacesIt is important to note there are different types of coworking spaces that suit the needs and requirements for different people. ConventionalWhen thinking of coworking spaces, this is often what comes to mind first. Conventional or open workspaces are typically not geared towards a specific type of organisation or company but rather focuses on creating a shared, open and collaborative environment, in which freelancers and different types of companies from a range of different sectors are able to conduct their business from.  High-End/Full-ServiceThese usually have higher quality and a broader range of amenities than a conventional workspace may have, with a higher focus on offering luxury and convenience for the people that work there. Whilst they may offer more services, this means that this type of coworking space often comes at a much higher price than their ‘conventional’ counterparts. Corporate/ProfessionalThis type of workspace caters to more corporate clientele rather than ‘energetic’ start-ups that put a higher emphasis on collaboration. Therefore they offer a more private and usually quieter setting that might conventionally be considered more professional. They are also a cheaper alternative to the high-end workspaces, so are a good fit for smaller companies. A good example of this is OpenHub, a professional coworking space based in Dubai. MinimalMinimalist or ‘bare-bone’ coworking spaces places a high priority on affordability. They usually offer just the basic services, such as wifi, electricity and water, and have very basic and minimal furniture. This is a good option for individuals and freelancers who do not require much in terms of services.Industry-Specific/SpecialisedThese are usually niche working spaces that only allow companies or individuals working within a particular sector to work. As such these spaces tend to cater to specific demands of that industry. Specialised workspaces might include healthcare specialists, law firms, or even creatives and artists. This allows for and encourages much greater inter-company collaboration.   IncubatorsIncubators are often reserved for start-ups and new companies, so, therefore, cater to smaller companies that are more budget-conscious. Incubators sometimes offer business guidance, funding as well as networking opportunities, which help businesses to grow. What are the advantages? It makes quality services more affordableCoworking spaces allow those that have a smaller budget to have access to amenities and services that would otherwise be unaffordable. Even the most basic coworking spaces offer pantry space, wifi, receptionists, and printing services, whilst some of the more high-end spaces can provide access to expensive industry-specific equipment, boardrooms and meeting rooms. It allows much greater flexibilityFreelancers and small business owners often do not have the budget, resources or the need to commit to a long term contract for an office space. Coworking spaces can often be booked on a short term basis, allowing the individual to have much greater control over the spaces they have. This is especially the case with smaller companies who may be undergoing rapid expansion, and so can take up more office space as and when their business requires it. Offers networking and collaborative opportunities One of the greatest benefits regarding coworking spaces is the collaborative environment they foster. Sharing big spaces with other likeminded individuals can help spark greater innovation, as well as afford them priceless networking opportunities, which can often lead to inter-brand collaborations. Especially in the case of start-ups, these collaborative environments can help kickstart the company’s growth and development.  Who uses them? Coworking spaces are used by a wide range of different individuals and companies.Many start-ups, small businesses and freelancers enjoy coworking spaces as it allows them to utilise resources and receive services and amenities that would otherwise be unavailable or too costly were they to have their own office unit. Further to this, anyone wishing for more flexibility when it comes to work can benefit from using a coworking space. They are a great way to foster creativity, new ideas and a collaborative environment.  

This week, Dubai hosted the biggest and most influential real estate event in the Middle-East, Cityscape. The event is designed so that industry professionals can network and learn from each other, through talks, panels and exhibitions. Despite being held in the middle of a pandemic, the event was carried out successfully and safely, with strict social distancing rules put into place. This included employing social distancing ambassadors who ensured participants adhered to the rules, enhanced cleaning of all areas, non-contact registrations. This stringent safety measures put in place shows that events like this, whilst very different from what they were like pre-pandemic, can still be held. The director of CRC, Ben Bargh, was part of a panel at Cityscape, discussing the new reality of the commercial property market. Despite a turbulent 2020, the commercial real estate market will survive, thanks to an increasing amount of importance being placed on 360-degree digital portals and building management. Due to the circumstances brought about by the lockdown, real estate companies have been forced to turn to digital solutions to show off their properties. More companies are moving towards a multichannel approach and expanding their online marketing. Rather than traditional brick-and-mortar estate agents, companies are adopting online marketing campaigns, boosting their SEO, and using social media, which keeps in line with the digital mindset that is becoming an expectation for modern brands. As technology moves forward, real estate companies are also looking to better, more advanced property portals, such as Houza, which offers an optimal user experience in searching for properties in Dubai, especially when it comes to bringing the property to life online. Behnam Bargh, Director at CRC, echoed similar thoughts, as he said the first impression of a commercial property for a client is looking at the picture of the property. In that sense, portals become very important in a customer’s journey when looking for an office, retail space or warehouse. This is especially the case now that we have seen a shift in people searching for properties on their desktop to their phones. Whilst nobody expected for the market to depend on technology as much as we have, it is something that we need to take in our stride, allowing for commercial real estate companies to develop a more rounded marketing effort as we head into the New Year.    

Whether you are setting up a new business in Dubai or looking for somewhere better to locate your company, careful considerations should be made about the commercial property you will need. We put together some of the top tips and the different things to think about when looking for a commercial property to lease.Consider what licenses are requiredMany different considerations need to be made before determining what trade licenses are required. If the office is based in a free-zone, then the company will need to apply for a Free-Zone License. Whilst this means that an expat is able to retain 100% ownership of the company, it is important to note that companies in free-zones are unable to trade directly with the local market without the help of a local agent. Businesses that are offering a service can apply for a Professional Services license.Companies operating under this license can retain 100% ownership, whilst outside of a free-zone, however, the company will need a local agent in order to serve, who will command a fee. The third type of licence a company can go for is an LLC licence. This allows a company to operate anywhere with any kind of service, providing there is a 51% ownership of the company by a local partner. Before deciding on what and where you want to rent, it is therefore important to decide on how your business will operate and what licences will be needed. Finding out what license you need will help narrow down where your business can operate, especially since certain activities can only be done in certain areas under a specific licence.If the company is new, then initial trade name certificates and initial trade approval will need to be obtained. Once all of this is done, then both parties can proceed, and the tenant can move into their new workplace. Make sure the office suits company’s needsNaturally, it is crucial to consider the growth expectations of the business. Depending on the size of your office space, you will be eligible for a certain number of visas for your workforce. There are several different types of commercial properties, depending on the purpose, such as warehouses, offices, and retail units. Therefore companies should also consider the kind of commercial property that is most suitable for them. For example, if they just need a warehouse, is there a separate office space for managers to work? Another consideration that should be made is if you will opt for a fully-fitted office, or a shell and core. Whilst shell and core properties are generally cheaper; the business will be required to use a fit-out company. Another benefit of shell and core is that it enables the company to make their office suit their specific needs. That being said, a company would need to check the permissions they have for their unit. Companies will need to check with the landlord if they are able to fit inside toilets, pantries, or other significant work for the unit. Companies should be aware that fitting can be expensive, so in the long run, both options should be considered. Fitted offices are more expensive, they are often move-in ready, which can be more efficient and save the company time. It is important to see if the property is in a suitable condition and if any work needs to be done prior to moving in.Finally, it is not just the office itself that should be considered, but also the surrounding community. Before deciding on a property, it is essential to consider the needs of the employees. Employees may need to use public transport to get to work, so finding an office that is close to a metro station and/or bus stop would be significant. If your employee’s drive, is there parking available nearby? Another thing that might be considered is what your employees will do for lunch. Is there a pantry in the office, if not, is there a supermarket or food outlets nearby. An office space may be perfect, but could also be highly impractical if it is not close to any restaurants, stores, and other amenities your employees might require. Go with an expert brokerNavigating the property market can be daunting. That is why it is best to go with an expert who will be able to advise you on the property that will suit your company best. An expert broker will be able to give you informed advice about each area, as well as be able to use their expert knowledge to broker you the best deal possible.  It is always best to go to an area specialist who has experience with specific locations and will be able to provide all of the necessary information required before moving into the commercial property.  

The coronavirus pandemic has undoubtedly caused a shift in the way we live and work. It has also caused major concerns regarding the safety of employees in shared office spaces, which have the potential for the virus to spread across a company. That being said, companies need to take on increased responsibility and take certain precautions and measures to help mitigate the spread of the virus and make their office spaces as safe as possible during the pandemic. Here are some tips and advice on helping make your employees feel confident and secure working in the office. Support your workers These are definitely some unprecedented times that we are currently experiencing, with everyone facing new struggles and difficulties. That is why it is so important to be extra compassionate and flexible with our employees and fellow co-workers. If you are implementing work-from-home, there should be consistent communication between employees and employers. With reduced or lack of face-to-face interaction, it can be hard to keep in constant contact with each other. Therefore a deliberate effort in making phone/video calls and daily check-ins should be made. You should also support your employees in a practical sense. Have a box of masks handy for each employee, as well as plenty of hand sanitizer available. You might also want to consider giving your employees a COVID-19 safety kit. This might include a pack of facemasks, hand sanitizer, pack of disinfectant wipes, and a leaflet on safety measures and precautions, as well as any rules that the office might have in place.Clean, clean, and clean some more!This is probably the most important thing you can do!  Ensure you are constantly washing your hands, keep a bottle of hand sanitizer at your desk, and clean any workspace you come in contact with. Make sure to cover your mouth with your elbow or a tissue when you need to cough or sneeze instead of using your hands. Wash your hands thoroughly with soap and water for at least 20 seconds regularly throughout the day, especially after touching any public surface or being in a communal office area, such as a shared kitchen or conference room. It should also be remembered  to disinfect high-touch surfaces daily in common areas (e.g. tables, hard-backed chairs, doorknobs, light switches, phone receivers and keypads, remotes, handles, touchscreens, desks, toilets, sinks, elevator, and elevator buttonsThere should also be a thorough daily office clean, which involves properly disinfecting every surface. Employees should also be encouraged to thoroughly wipe down their own desk and work area when leaving, especially if your office practices flexible seating with no set seating plan. Employees should remember that to properly disinfect something, they should clean only one item at a time, using enough wipes to ensure the surface stays wet for 4 minutes. Keep your distance and embrace technology In order to stick to the social distancing guidelines, employees should always keep between 6ft or 2 meters apart at all times. This, however, can be difficult within an office setting, especially if meetings need to be conducted and desks are already set up. Therefore, face-to-face contact should be kept to an absolute minimum. With modern technology, meetings and conferences no longer need to be in person. Companies should try and avoid unnecessary face to face contact by encouraging virtual zoom meetings. This also means there is less need for employees to come into the office every day. Therefore companies might want to consider staggering work times implementing reduced capacity in offices. This might mean encouraging working from home, with half the workers to come in one day and the other half the next. If a company is going through with reduced capacity, companies might also want to consider creating a new office floor plan. In creating a new plan, certain desks might need to be put out of use, ensuring a sizable gap between each worker.  That way employees can have their own space without the need to share desks. If at all possible, install touch-reducing amenities. This might be double swinging doors that can be opened with a shoulder/foot, motion sensor lights, or hands-free signing in/out machine. This will reduce the number of surfaces that employees will have to touch. Companies should also limit the guests that come into the office to an absolute minimum. This applies to both guests who will be coming in for meetings, as well as people delivering items into the office. Discourage employees from ordering food or receiving personal packages into the office. The fewer people that come into the office, the less likely the chance of spreading the virus. Communal spaces This is an area where the virus is most likely to spread between. Rather than using reusable mugs, cutlery and plates, use single-use. This will reduce the chance of the virus spreading when your employees are on their lunch and coffee breaks. Make sure to regularly wipe down and disinfect communal areas, and limit the number of people that can enter at one time so to ensure everyone can maintain social distancing.  Communication is key Make sure all of your employees are kept up to date on all the latest updates. This might involve sending a weekly newsletter letting employees know all the latest information in regards to COVID-19 and to reinforce any rules put in place to reduce the spread of the virus.Visible signage around the office should be put up that will raise awareness about how employees can ensure their safety. This might include information on good respiratory hygiene, cleaning recommendations, social distancing guidelines, and symptom checks, as well as information on what employees should do in the event that they start showing symptoms. You should encourage regular COVID checks, and if anyone is unlucky enough to contract the virus, employees should know the correct procedure that they should follow. This would include the infected person and anyone who had contact to self-isolate until they receive a negative test result. Companies may also want to create a platform where employees can communicate and raise their concerns, and be more flexible and accommodating in regards to their personal circumstances and needs. We understand that employees may have concerns for their safety when working from an office space, with concerns over contracting the virus. That being said, we hope that these tips and advice will help encourage employees to feel more confident about working in a shared environment again.   

The current pandemic has meant that there have been massive changes in the way we work. The biggest change is the increasing trend in working from home.  Safety concerns and government regulations have meant that now more than ever, employees are being told to work from home.  This new working style has brought some welcome benefits, or ‘home comforts’. Casual clothing, even pyjamas, can be worn every day and during breaks, employees can just veg out on the sofa. Employees are afforded the opportunity to work in an environment that suits just them. It has suddenly given workers flexibility and freedom that has not been afforded before in the same way.Whilst it might be nice to get a bit of respite from the office, a study by The Khaleej Times found that UAE residents are struggling with some aspects of these measures, such as feelings of being disconnected, lack of opportunities to learn from colleagues and in some cases, an increase in workload. There is also the problem that for many people right now, working from home measures means that there is no distinction from work-home life and therefore turns the home into work. There is no escaping it. That is why, keeping in mind the benefits of working from home, it might be time for managers and business owners to make some much-needed changes to the working environment.When offices do finally decide to open again fully, it is important that managers and business owners take into account everything that has happened in this year and to learn from both the enjoyment and grievances that employees have in regards to working from home. That is why, after bringing the office into our homes, it might be time to consider doing it the other way around. Whilst no-one is saying that employees should suddenly start coming to work in their pyjamas and lounge around in the office all day, the experiences of working from home have certainly started conversations and new ways of thinking about how we see office spaces. We spend so much of our time in the office, that it is perhaps time we start making it a place that we genuinely enjoy going to, a sentiment echoed by Betterhomes Managing Director, Richard Waind, who claims “the office of the future needs to be more than just a place to work. It will need to entice workers back with some of the comforts of home and create spaces that are truly collaborative”. If the problems that people are having with working from home are anything to go by, people are longing for more collaborative environments. The days of individual, isolating office cubicles are over. With falling office prices, now is absolutely the time to invest in offices that have shared spaces that really encourage collaborative working. Companies can even afford bigger offices that have bigger break rooms, and entertaining spaces, in order to transform them into comforting and relaxing spaces. At the end of the day, the office is supposed to be for the employees. Find out what they want. Allow them to bring their home into the office, encourage photos, and plants. Invest in some comfy chairs for the break room. Ask them about how the office can be a more lively, and enjoyable place, which in turn will create a great company culture.  

There are currently many available commercial options on the market, but how can you make your property stand out from the rest? We have provided some industry tips which can improve your asset and make it more attractive to potential investors.MAINTENANCEEnsure your property is well maintained. The asset should be visually appealing, with a well-maintained interior and exterior. Those first impressions can be critical even when it comes to securing a viewing. Minor improvements such as painting and deep cleaning can be very effective with small capital expenditures.SUSTAINABLE IMPROVEMENTS  Making environmentally conciseness improvements can increase the value of the property by reducing operational costs. The changes can be as simple as insulating the property and switching to efficient light bulbs. Many governing bodies will also provide grants to help with larger capital outlays such as solar panels. If you are looking to attract large companies, keep in mind that many have corporate social responsibilities, and will only occupy energy approved assets. KNOW THE MARKET  Research the market and find asking and sale prices of similar assets. This will give you an advantage in the sale negotiation stages. If you’re looking for a quick sale, ensure the property is listed at the market asking price. Many investors will use a property search engine and filter the price ranges if the asking price is too high; your asset will not appear within the search.KNOW YOUR PROPERTYIf you own a commercial building be aware of what type of tenants will be able to occupy your building, for example, which license they hold and if their business operation is approved. Gain as many government approvals as possible in order to accommodate as many tenants as possible.HIGH OCCUPANCY RATEHaving a high occupancy rate will make your property more attractive to an investor. This can be achieved through leasing units at the current market rate, securing tenants with good covenant strengths, longer lease terms, good unit mixes and effectively using the available sq.ft area.EXPERIENCED BROKER  Use an experienced brokerage that will give your property the exposure to the market that is deserved. A good real estate company will have a database of potential investors and will also have a planned marketing strategy tailored to your requirements.  

As our norms and routines significantly change towards a “new normal”, that is yet to be defined, many questions and concerns have arisen for the individual, both professionally and socially. With the social and sectorial restriction in place in the UAE, companies, and businesses have had to act quickly to ensure the health and safety of their staff, while implementing new operational strategies and approaches to allow business continuation. Inevitably these changes have had a material impact on cash flows, with liquidity pressures rapidly increasing. These challenges have created uncertainty within the real estate sector, although there are still deals coming to fruition, many acquisitions, disposals, and developments are now on hold. Sales volumes, as a result, have significantly slowed with forecasts predicting the may drop to the levels of the 2008 market. In the malls’ segment, groups such as Al Futtaim are putting in place a range of initiatives, including rent holidays and rent relief funds to help their tenants. However, with no clear indication from the government around when policies will be relaxed and the UAE economy re-opened, many businesses may require further support in order to weather this unprecedented storm.It is still unclear if there has been any significant change in property prices as transactional data and price discovery within the first quarter is still limited. If we look east to markets that are further along the curve of this pandemic, markets in Asia are beginning to lift restrictions. These markets have sustained a significant slow-down in market growth, they have also had to withstand second waves of viral outbreaks, Hong Kong and Singapore being the prime examples. However, as they look to re-start their real estate markets it is imperative that the UAE learns from the best-practices they establish and the mistakes they make over the coming weeks and months. The real estate market presents many challenges to restart safely; strong reliance on close contact between customers and professionals create challenges for remote-work and make the sector difficult to safeguard. The sector also relies on consumer confidence which as previous market shocks have demonstrated is difficult to overcome quickly. The UAE will learn from the protocols put in place in Asian markets as well as globally, where leading economies are creating “back-to-work” frameworks and protocols that are sector-specific. Looking forward, it is challenging to predict when regional and global markets will return to pre-virus levels, however, comparing to historic viruses such as SARS, we saw a “V” shaped recovery, with temporary and short-term impact. COVID 19 has had a much wider global impact, for example Asian markets rely heavily on buyers from the west, this global connectedness is likely to make the impact of this shock more sustained, so a “U” shaped recovery is more realistic, with some lasting economic effects. CRC has seen asset classes with high levels of social interaction hit the hardest, such as malls, retailers, restaurants and hotels. In contrast to this, sectors such as industrial and logistics facilities have been more resilient, where many consumers have continued to move to online shopping with the UAE government classifying many supply chains under these classes as “essential” to serve the public. We have also seen different approaches from investors within the market, many are looking to mitigate and consolidate risks in their existing portfolios, while those with cash available are seeking to capitalize on the drop in prices and making discounted investments. The majority of investors will look to survive the next 3 months and wait for real data to emerge on the true extent of the damage to the market, prior to making any acquisitions or disposals. It is also likely that landlords will see amendments to future lease terms, to cater for potential similar global shocks including future pandemics, with tenants becoming more savvy and negotiating for more lenient break clauses.       Once all restrictions on movement and work are lifted it is unlikely we will go back to the “old normal”, rather a “new normal” will define how we assess and occupy real estate. For example, many office occupiers previously opted for open plan environments and may now shift to contained areas, to separate staff. The UAE Government could review laws that outline the number of staff per sq.ft, the required distancing between desk space and air conditioning/airflow requirements, to name a few examples.  During this crisis, many businesses have also migrated to remote working and increasingly deployed technological solutions to empower their staff to work from home. These new approaches may better suit company operations and staff in many sectors, and in turn, this may lead companies to down-size, right-size or in some cases move to a fully remote model, this “physical” office may increasingly become part of the “old normal”. In the longer-term, co-working and flexible-working spaces could become more prevalent, albeit with new government policies place.For manufacturing and logistics, businesses disruptions to supply chains and businesses with reliance on international imports have seen inventory levels drop which has led to local sourcing. These newly built relationships may indicate potential deglobalisation of supply chains to mitigate risk and improve corporate responsibility in relation to sustainability. Robotics and automation may become more established, with more reliance upon e-commerce and reducing human interaction. This drive could result in larger e-commerce players to invest in upgrading and develop their existing facilities. For further information and insights from our Valuation and Investments teams please visit crcproperty.comOur Valuation department is still fully operational, offering valuations on a desktop basis subject to deferred inspections.     Joe Titchner MRICSHead of Valuations  

Legal experts largely agree that the new UAE Bankruptcy Law is an improvement on the previous law, but is it all good news for debtors and creditors?What is the UAE Bankruptcy Law?The Federal Decree Law No. 9 of 2016 (UAE Bankruptcy Law) provides a framework for companies in financial distress to avoid liquidation and protects employees, shareholders and directors of organisations going through court-led insolvencies. It contains 230 articles and primarily works to bring flexibility to those going through financial difficulty, providing more support for both debtors and creditors. Since its implementation on December 29th, 2016, it has removed the risk of facing legal prosecution and jail time, and special tribunals are no longer required for the insolvencies of large companies.Who does the UAE Bankruptcy Law affect?The UAE Bankruptcy Law applies to commercial companies, companies owned by the UAE or any Emirate’s government, individual traders and civil companies established in the UAE. It excludes companies established in the financial free zones and non-trader individuals, who will remain subject to the UAE Civil Code in the event of financial distress and who will therefore continue to be at risk of legal prosecution.What are the key changes implemented by the UAE Bankruptcy Law?The law is centred around the implementation of four new court-supervised procedures:The preventive compositionA process for solvent debtors who are facing financial difficulties. Only a debtor may apply for this and it should be initiated at the early stages of difficulty before insolvency, to protect the debtor and provide more time and support to fulfil the debt with the court’s supervision. The unsecured creditors must approve this within three years of the court’s approval and it may be extended by three years.The restructuring processFor an insolvent debtor facing financial difficulties that have led to failure to meet debts for 30 working days or more. This can be initiated by the debtor or by unsecured creditors who have issued a formal demand for a debt of Dh100,00 that is overdue by 30 working days or more. The debtor is allowed five years for restructuring the debts and this may be extended by three years.Insolvent liquidation processTo be initiated by the order of the court, for the debtor to cease commercial activity if the previous two options are unsuccessful or are not approved. The court will appoint an insolvency trustee or official to oversee the process and monetise the debtor’s assets.Financial restructuring of financial institutionsThis may be initiated following preventative composition or restructuring and includes safeguards for existing secured creditors.Accordingly, greater flexibility is available for debtors and creditors. For the first time courts can amend loan terms and debtors can apply for support from the court during financial difficulties, which can potentially provide three to six years of protection and support. The UAE Bankruptcy Law provides more options for debtors in the UAE and this in turn brings greater protection of the debtor’s business, and of the creditor’s assets.  It creates more security and predictability and can help to prevent financial problems from growing and becoming unmanageable whilst there is still potential to fulfil the debts owed. To encourage debtors to apply for rehabilitation when facing financial issues, the law states that once the court accepts the application, all other claims and proceedings are suspended until approval. This is to encourage restructuring finances rather than leaving the creditor without their owed debts, but it means that existing debts are suspended, bringing risk of alternative liability.What are the implications for debtors?The UAE Bankruptcy Law helps to support debtors’ businesses maintain viability and aims to protect them during a restructuring. It can also protect Directors and Managers from arrest or being forced to flee the country as a result of their company’s debt. However, it’s important to note that the removal of the criminal offence of bankruptcy does not remove the criminal offence of fraudulent bankruptcy or any breach of the Commercial Companies Law. It is clear that using the UAE Bankruptcy Law as protection from such a breach will render the individual exempt from protection. This will lead to the member being held personally accountable for the debts and damage.Criminal proceedings regarding bounced cheques are suspended once a preventive composition or restructuring process has begun, which can help debtors maintain viability, although misuse of this protection can be a fraudulent insolvency offence. The UAE Bankruptcy Law states that members involved in the liquidation of the company are accountable for a Dh1 million fine and up to five years in prison if found guilty of altering records to harm the creditors, embezzlement, acknowledging unpayable debts, deceiving the court in their application for any of the processes in the UAE Bankruptcy Law, or sharing false information about the capital.It is important to consider the time frames enforced for new processes in the UAE Bankruptcy Law. There are time frames for approvals, appeals, and initiating processes that must be observed to maintain protection. For example if the debtor does not apply for bankruptcy within the thirty working day window of failing repayment, the liability can shift to the members and Directors and can leave them personally liable for mismanagement. A preventive composition is not available to a debtor that has already entered into the procedure in the past year and cannot be used by a debtor for which bankruptcy proceedings have initiated, so both processes should be carefully considered. It appears the best advice is to be prepared, act quickly and seek help at the first signs of difficulty to maintain business integrity and protection from greater difficulty further down the line.For debtors, the UAE Bankruptcy Law provides some leeway, but does not relieve the requirement to fix the debts owed and depends upon the handling of the court and the court appointed officials as to how effective a strategy it can be. Applications require preparation and time to complete and therefore it is necessary to undertake a risk analysis and keep the preparation process in mind when considering the time frames. The plan for preventive composition must be effectively prepared as, once agreed and in process, failure to comply can result in the court ordering for bankruptcy or liquidation. In addition to this, the debtor must have funds to cover the cost of the procedure and approval is required from shareholders.What are the implications for creditors?The UAE Bankruptcy Law appears to offer a debtor-centric approach but creditors also benefit from more security and legal rights than before. Creditor initiated insolvency proceedings will be useful in protecting assets and the removal of the criminal offence and more options to debtors means more likelihood that debts will be cleared rather than absconded from. Research by the World Bank has shown that insolvency processes in other countries have up to nearly 60% higher recovery rates than the UAE, so this is a much needed improvement for UAE creditors. As a result, the UAE also becomes more attractive to international investors and businesses and benefits the economy as a whole.Secured creditors are prioritised by the UAE Bankruptcy Law, and again must consider enforced time frames. Secure creditors require court approval to claim against the trustee regarding their secure assets. The court’s decision will be published by the trustee, then creditors have a window of 20 working days to bring their claims. Following publication the debtor has 45 working days to submit an initial preventive composition plan for a vote of approval by unsecured creditors. This gives unsecured creditors an understanding of timings and proposed chances of success, but to vote their debts must be accepted by the court and a majority vote requires at least two thirds relating to the value of the debt. After this the unsecured creditors, regardless of whether they voted, are bound to the agreement. This process appears to favour larger investors and may encourage more investment, but could discourage smaller investors from becoming involved initially.Whilst the debtor continues to run the business, the court-appointed trustee has rights to act for the debtor to preserve the assets needed to complete the process. Any activity that could impact the position of secured creditors must be approved by the court and the court may order for liquidation of the debtor’s assets if they do not comply with the agreed terms of the preventive composition.In summary, the law provides much more transparency and more confidence and predictability for creditors.Outlook and future developmentsThe UAE Bankruptcy Law aims to improve the business environment and economy by offering debtors more opportunity to resolve debt without facing liquidation and prison. Investors can invest more knowledgeably and confidently, and those seeking investment will have better access and support to avoid liquidation. This should influence a further rise in investments and business growth in the UAE, particularly for entrepreneurs and SMEs.Further encouragement to debtors to seek support early on in their financial decline may help to prevent bankruptcy, however, it does not necessarily stop debtors fleeing the country to escape criminal sentencing in fraudulent cases. This also relies on debtors being financially aware and knowing their rights early on in, or before their decline.Whilst greater co-operation is possible between debtor and creditors, the processes are managed by courts and court appointed officials. Given its recent implementation, it is too early to know how successfully issues will be managed which creates uncertainty. It will work on a case by case basis and relies on there being an experienced talent pool with knowledge of the relevant industries. Experience and understanding of the issues and outcomes will come with time and there is no doubt opportunity for the law to evolve. Larger more structurally diverse companies may complicate the process and we are yet to see how these instances will pan out, but the new law looks like a step in the direction of a smoother, slicker business environment with more international appeal.