Nakheel offers rent-free periods to entice tenants***

DUBAI, May 16 (Arabian Business.com): Nakheel, the Dubai developer restructuring $10.8 billion in debt, is offering up to two months rent-free in units in lower-priced developments in a bid to attract tenants. The government-owned company is offering new tenants free periods on leases in Discovery Gardens and International City, where rents start from AED25,650 and AED17,100 a year. A spokesperson for Nakheel said the offer had been "well-received" but declined to specify how many apartments have been leased under the scheme. Nakheel was one of the biggest casualties of Dubai's real estate downturn, which saw prices halve from their 2008-peak and almost half of projects in the emirate cancelled. The developer's inability to meet its debt obligations in the wake of the global credit crunch helped trigger Dubai's debt crisis in 2009. The sprawling developments of Discovery Gardens and International City have seen rents tumble as an imbalance between supply and demand forced down values. Latest data from Dubai's real estate watchdog, RERA, showed prices for a one-bed apartment in Discovery Gardens, which houses around 41,000 residents, had fallen nearly 30 per cent from December 2009. Rising vacancy levels will likely force more landlords to offer incentives such as rent-free periods and reduces rates in a bid to lure tenants in an oversupplied market, said James Gauduchon, head of marketing at real estate agency Better Homes. "There is no doubt that Dubai's residential leasing market is becoming more competitive," he said. "Not only have prices dropped drastically over the past two years, there's the often-mentioned slight oversupply in many areas, leaving landlords with under-occupied buildings.k