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Rentals of real estate in Dubai’s Steak Real Estate Investment Platform portfolio have fallen by 12 per cent since February, prompting the company to eliminate the 7% performance fee when selling real estate and move the new property management to its internal team, according to a report published by Arabian Business.
Rami Tabbara, co-founder and co-CEO of STEC, said the past six months have been difficult for investors, adding that the company should have communicated with them more clearly about the impact of regional instability on its real estate portfolio.
In a letter to customers published by Arabian Business, Tabbara said property values in the company’s portfolio had fallen 5% since February. “We’ve launched Stick to help everyone build wealth through real estate, so when the returns you expect are affected, I take it very personally seriously.”
Occupancy improved after its decline
The occupancy rate in STEC real estate fell from about 89% before the regional dispute to 78.6%. It then rose to 84% in August and 87% in September, according to Tabara, who acknowledged that performance had not yet reached the company’s target.
“We have not yet reached the level we aspire to, but our focus is on occupying these properties again and resuming income from them,” he said.
The company is working to adjust rents, promote real estate marketing, accelerate the attraction of tenants, and reduce the time required to equip units between occupancy periods.
Tabbara pointed out that the distribution of revenues may not resume immediately after the rental of the vacant property, as costs such as service fees, facilities, air conditioning maintenance, cleaning and pest control continue during the vacancy period. The first lease of a collector may be used to settle the accumulated expenses before the resumption of payments to investors.
Transferring Property Management to an Internal Team
From October 1st, the Steak Real Estate Management team will manage every new property financed through the platform. Existing contracts with offshore management firms will continue until they are renewed, when investors vote on whether they want Steak to take over.
The internal team will oversee the recruitment of tenants, the conclusion and renewal of leases, the collection of rents, the conduct of inspections and maintenance work, and the preparation of reports. The company said the change will help it respond more quickly to vacant real estate, closely track costs, and determine responsibilities during the investment cycle.
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