The Abu Dhabi government said it paid 220 businesses a total of Dh8 million as part of an initiative that allows restaurants, entertainment and tourism outlets in the emirate to recover 20 per cent of their annual rent to ease the impact of the Covid-19 crisis on the private sector.
About 8,000 business units with a collective rent of Dh1 billion currently qualify to apply, which means the emirate is ready to pay Dh200m under the rent recovery initiative, Khaled Mubarak Banizama, head of industrial development at Abu Dhabi's Department of Economic Development told reporters at a virtual press conference on Sunday.
The government body is incentivising investors in the tourism, entertainment and restaurant sectors to stay in business during the pandemic by encouraging them to take advantage of the rebate on commercial properties that is available if they renew their rental contracts by September 30.
"The main aim of the initiative is to bolster investors' confidence in Abu Dhabi's business environment," Mr Banizama said. "We want to incentivise those who believe in the business climate in Abu Dhabi ... so long as they renew their contracts during this time we will honour their efforts."
Rent is the largest cost that these businesses must bear, comprising more than 40 per cent of operational cost, and has become a major pressure on business continuity during the coronavirus crisis, he said.
Mr Banizama said he expects more businesses to apply for the rent rebate scheme in June as contracts become due for renewal but acknowledged that some companies may go bankrupt because of the crisis or because they had suffered losses prior to the pandemic.
The Department is also considering more initiatives to relieve some of the cost burdens faced by businesses in other sectors that are affected by the crisis through, Mr Banizama said, without revealing details or a timeline.
Abu Dhabi government officials previously held meetings with companies in real estate, hospitality and large family businesses to gain their feedback on the support they require beyond government measures already taken to shore up the private sector, it said.
Abu Dhabi, which accounts for about 6 per cent of the world’s proven oil reserves, introduced a number of measures to support its private sector after the outbreak of Covid-19. The emirate introduced a stimulus package in March to mitigate the Covid-19 crisis. The relief programme includes 16 initiatives, such as the rent rebate, to reduce the cost of living and support businesses in the emirate.