Coronavirus: Economic stimulus package for Dubai Free Zones a positive initiative – Savills

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Savills, the global real estate advisor, has said that 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 ease the burden on corporate tenants.

The recent announcement includes the 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.”

Approximately 45,000 companies and 390,000 employees work in Dubai Free Zones, accounting for approximately a third of Dubai’s GDP.

Walshe added that the refunding of security deposits and restructuring of payments will improve liquidity for businesses located in Free Zones, and reduce the financial burdens faced, particularly for 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.

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