Raza: Saudi Arabia’s key message for tenant-landlords
Raza CEO, Waleed Alesia, on the theme of evolving tenant- landlord relationships during COVID-19
‘We’re all in this together’ - words for all times, but that ring true now more than ever as the world confronts an invisible enemy, with little visibility on when the COVID-19 pandemic will end.
Businesses around the world are hugely impacted by the unexpected and rapid spread of COVID-19, which has resulted in hundreds of thousands of organisations shuttering their offices and storefronts.
With cashflows being hit, the consequences to bottom lines are inevitable.
As we all know, rents are one of the biggest outlays for operations and the years of growth that preceded the current crisis have resulted in several industries and sectors growing. This has meant larger teams and the need for greater commercial space to accommodate the expansions.
However, with the majority of workers currently operating out of their homes, due to national lockdowns or quarantine rules, vast spaces of real estate that have been leased out lie unused, prompting landlords and tenants to revisit their tenancy contracts and obligations.
The pressure on both sides is palpable. For landlords, they are in the business to lease space, while for tenants, when their revenues are hit, it is no surprise that they are seeking concessions to help them survive during the lockdown.
‘We’re all in this together.’ Words that need to be translated into deeds.
The pandemic is unprecedented and has challenged countries, businesses and communities with its unpredictable force. With so much about the COVID-19 still largely unknown, it is clearly impossible to predict how the world will recover.
In this climate, it is crucial for all stakeholders – from across the public and private sectors – to have open and transparent conversations about the challenges and realities facing them. We need a collaborative effort that includes comprehensive measures ranging from government reliefs to commercial incentives from private developers.
As the real estate arm of the Saudi Public Pension Agency (PPA) and a subsidiary of Al Ra’idah Investment Company (RIC), Raza has offered rent waivers and deferrals across our properties in Saudi Arabia. These include delayed rental payments for a period of up to six months to our office and retail tenants as well as a comprehensive stimulus package that is being developed by PPA’s real estate management arm.
We will hold off from issuing any rental invoices to businesses, which are also exempt from late payment fees during the period between 1 March and 31 August 2020.
These concessions are expected to benefit businesses that operate out of our property portfolio across Saudi Arabia.
In particular, we are hopeful they will aid several small and medium-sized businesses that are important drivers of the country’s GDP, as well as employers of large numbers of the Saudi population.
The relief measures are applicable to commercial tenants in a number of our properties including Digital City in Riyadh, a 450,000m2 development that is home to some of the largest private sector and government organisations such as PIF, Qiddiya, and The Red Sea Development Company, among others.
Business establishments operating in other properties such as the Diplomatic Quarter; King Abdulaziz Towers; Al Dhabab Towers; and Hamra Al Sharq, can also avail the rent relief programme.
Raza’s incentives come at a time when the organisation is pressing ahead with two major residential developments in Saudi Arabia: East Village, the residential cluster of Digital City in Riyadh, and Jeddah Obhur City development.
Once completed and delivered in Q3 2020, these projects will make Raza the largest community landlord in Saudi Arabia.
‘We’re all in this together.’ In the last month, we’ve seen these words go viral.
The spirit of togetherness has been truly inspiring as stories of resilience, community and unity have shown that we are able to combat adversities strongly.
For landlords, these challenging times, are also an extraordinary opportunity for us to demonstrate our commitment to partner with our tenants and their teams to help mitigate the impact of COVID-19 on their businesses and livelihoods.
An important lesson for all of us, who are landlords, is to be guided by the basic tenets of building relationships, delivering experiences, and being there for our tenants, when they need us.
This is how we should be remembered, and this is how we will be valued.