Muscat: Real-estate companies in Oman expect rents to take at least six months to one year to pick up again, having fallen as a result of the COVID-19 pandemic.
Measures have been taken to allow deferment or reduction of rents for tenants who cannot pay their usual rents, but property owners and lessors have made it clear that only those whose income has been affected by COVID-19 will be provided this relief.
“There has been a significant drop in rent from both sources,” admitted Mohammed Al Zadjali, the owner of Triangle Real Estate Investment. “We do anticipate rents to pick up again, but they will rise gradually. It will take some time – six months to a year. It is not a good time now for rents to pick up again, nor will they pick up very fast, so it will take some time for rents to recover.”
“Landlords should also help tenants during this time and reduce the rents by at least half their value, or give them even a two or three month waiver, if possible,” adds Al Zadjali. “They are facing a struggle. We knew there would be an impact on the commercial and residential real-estate properties in Oman, from the very beginning. We are experiencing quite difficult moments at times.”
Adding to this consensus was Fahad Al Ismaili, the CEO of Tibiaan Properties, which conducted research into the impact the disease would have, and made plans to secure their tenants accordingly. He felt, however, that property prices would take about a year to stabilise.
“Everything we do, we need to start by conducting very extensive homework,” he explained. “In the real estate market, we deal with people more than anything else. It is important for every landlord to sustain his tenants, at least for the next one or two years. If you lose any tenants in the current situation, you might have problems getting a substitute for that tenant and difficulties in filling that unit.
“We have to look for ways to sustain our business, provide solutions, and provide better customer service in order to sustain each tenant right now,” added Al Ismaili. “Out of the 1,600 tenants that are living in our properties, around 100 to 150 of them approached us for different ways for deferment or reduction of payments, or even cancellations of agreements, because they were leaving the country, or were unable to sustain their business. We were able to cooperate with them, after the appropriate evidence was provided.”
Some companies in Oman were able to prepare for the arrival of COVID-19 by collaborating with their colleagues overseas, in countries where the effects of the disease were felt before they came here.
Ihsan Kharouf, the head of Oman for Savills, said: “We do have an extensive number of offices in China: we have 14 offices in China, and we are pretty much present all across Asia, we have a huge presence there, so we were able to coordinate and get a heads-up from our teams there, in terms of how their market, how their properties were being impacted.
“You could say we had a heads-up, in terms of how our properties were going to be impacted, so we did have about 50 per cent of our measures in place at the beginning,” added Kharouf, who said they provided rent relief to those residential and corporate clients who could show they’d been significantly affected by the pandemic.
“For residents, they would need to demonstrate their inability to make payments, and they would need to reschedule the rent, potentially for a longer period, to make it manageable,” he explained. “For a corporate point of view, this would relate to company accounts, where you would then see how trading has changed from the first to the second quarter. Obviously, this has not been audited, as it is still fresh, but you can still see running accounts that would be available, and you can immediately see how cash flow and trading has been impacted by COVID.”