Nakheel, the real estate arm of Dubai World, will be revising rents for tenants in The Gardens from June 1 onwards following the guidelines of Real Estate Regulatory Agency (Rera).
In a circular sent to tenants, the master developer said: "There will be rental revision affecting all contracts starting from June 1 onwards, in accordance with the rules and regulations announced by the concerned authorities of Dubai." The circular further said: "Each tenant will be advised separately about the new rent very soon".
When contacted by Emirates Business, a Nakheel spokesperson, in an e-mail response, said: "The Gardens remains one of Dubai's most sought-after rental communities. Nakheel will be revising rents for tenants in The Gardens in line with the guidelines established by Rera."
A resident, on conditions of anonymity, said: "We were surprised to get this circular at a time when we see rents in other localities of Dubai coming down. Discovery Gardens, which is close to our development, has seen rents dropping by almost 25 per cent. Although I was awaiting Nakheel's letter, I wish they take the market conditions into consideration before increasing our rents."
According to Rera's residential rental index, compiled in the second half of 2008, rent for a three-bedroom apartment in The Gardens is set at Dh130,00-140,000, two-bedroom at Dh100,00-115,000 and one-bedroom at Dh90,000-95,000.
The new decree, which applies to both residential and non-residential properties, prevents increases in rents during 2009 for tenants who are renewing rental contracts signed in 2008 – as long as the rent value in 2008 was equal to or less by a maximum of 25 per cent than the average rents in the Rera index. Besides, a landlord can increase rent by a maximum of 20 per cent, according to the decree.
Rera CEO Marwan bin Ghalita said recently that the agency was working on revising the rental index with a much more realistic value since rents were declining in the emirate. The revised index is likely to be released in April using the ejari (online rental registration) software.
The Gardens is located close to the Ibn Battuta Mall. The development consists of 129 low-rise buildings, housing one-, two- and three-bedroom flats, and accommodates 10,000 residents. It was fully occupied by 2003.
Nakheel does not offer the option for freehold ownership for properties in the community, according to the Nakheel website.
"With the most accessible rent prices of any such community in Dubai, The Gardens also represents Nakheel's commitment to affordable family living combined with quality lifestyle and amenities," the website says.
Landmark Properties said in a recent report that rents for Dubai apartments are expected to drop by 25 per cent, while villas will see a decline of 23 per cent in 2009.
In another report, Jones Lang LaSalle said Dubai's real estate market will experience a sustainable growth in rentals and prices from 2011 onwards, but 2009 will be a "year of correction".
"Prices and rentals are expected to decline across most sectors of Dubai market in 2009 before reaching an equilibrium again as the market stabilises in 2010. We expect Dubai to be handicapped by the significant levels of new supply and the market may not experience any sustained growth in rentals and prices until 2011," the property consulting firm said.
The gardens facts
- The first residents moved into The Gardens in 2001 and all apartments were occupied by 2003
- The development is 100 per cent let
- Accommodation is in one-, two- and three-bedroom apartments of 129 low-rise buildings with approximately 3,800 units
- The Gardens is spread over 220 hectares and is close to Ibn Battuta Mall
- The community accommodates 10,000 residents
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