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Abu Dhabi’s largest developer, Aldar Properties, launched a rent to own programme, aiming to increase sales of new homes on Raha Beach.
Three months earlier, Sorouh Real Estate rolled out the first in Abu Dhabi own rent to own programme for residential units in Sun Tower on Reem Island.
Rent to own programmes offer tenants an opportunity to purchase a home at a time when consumers are wary of buying properties.
Aldar’s programme is applicable to purchases for the unsold units in Al Zeina, one of the largest projects in the capital open to international buyers. The rent to own deal is also available on a few unsold units in the Al Bandar project and it is likely to be offered in Al Muneera, the mixed-use development of 14-storey buildings due to hand over later this year.
Under Aldar’s programme, participants will commit to renting a unit for a set rate for two years. At the end of two years, 100 per cent of the first year’s rent and 90 per cent of the second year’s rent would be converted to equity towards a purchase at a predetermined price. During the two-year period, the tenant will not pay service charges.
Aldar’s programme also allows participants to transfer their equity to a new tenant if they leave the unit within two years. The rental and sales rates offered in the programme will represent a “very small premium” on typical prices, according to the company.
The risk for participants is that rents and sales prices are forecast to decline in the next two years, but the tenants are offered cancellation option.