Thursday , 21 October 2021

Movenpick Hotel JLT – Important Investor Communication – March 2020

Dear Homeowner,

 

Due to the COVID-19 outbreak and extremely significant impact to the world health and economy in general, the hospitality industry is being drastically affected due to unforeseen travel restrictions and lock-down to which Dubai is no exception.

With the majority of the  reservations for March and April now cancelled, the Movenpick Hotel Jumeirah Lake Towers is expected to run with extremely low occupancy for the remainder of March and will be forced to close in April due to lack of occupancy which is expected to continue till at least June, depending on the evolution of the trading conditions.

IFA and the hotel operator, Movenpick, have implemented immediately major cost saving initiatives to mitigate the lack of revenue and minimize losses as much as possible. These initiatives, included but were not limited to: closing numerous floors, reducing services, freezing all recruitment, bonus or promotions, instituting staff lay-offs and unpaid leave, applying major salary cuts to those who still need to continue working to secure and safeguard the  asset, cancelling most third party contracts, mitigate risks of being affected by potential airline and tour operator bankruptcies, suspending payments of any management fees to Movenpick for the duration of this COVID19 Pandemic and at least until June.

Among other initiatives, IFA is also waiving its basic and incentive asset management fees for the duration of the COVID19 pandemic and at least until June.

Unfortunately, these initiatives will not be sufficient to mitigate the extremely negative impact of the COVID19 pandemic in the trading conditions. In addition, despite cost saving initiatives including the suspension of trading and closure of the hotel, there will still be necessary expenses to ensure the maintenance and protection of the property in acceptable conditions to ensure the quickest possible return to normality once the Pandemic COVID19 terminates and business conditions return to normality.

Therefore, each owner will be expected to contribute their proportional amount of the ongoing expenses to ensure the sustainability of the property and servicing of the necessary minimal costs to protect the property as defined, minimum services. This includes services such as security, maintenance and supervision.

IFA will be circulating the details and proportional value due from each owner, with the corresponding invoice in due course.

In addition, historically, IFA has been paying the Monthly Assessment Fee (“MAF”), the service charge, to the building manager, SAGA, on behalf of the owners. However, since revenues for the following months will be insufficient to cover the MAF, IFA will no longer be in a position to make such payments to the Building Manager, on your behalf, with immediate effect. This will not only be applicable for the duration of the Pandemic COVID19 but will also be applicable moving forward; IFA will not continue to pay the MAF on your behalf.

We are taking this opportunity to kindly remind you that the MAF payments are an obligation of landlords, calculated on a proportionate basis for each unit Owner as provided under the terms of the Declaration and Constitution, and the onus is entirely on the Owner to pay the MAF directly to the appointed building manager, which in this case is SAGA. This obligation is clearly documented in the Sales and Purchase Agreement and the original and new Rental Pool Agreements.

Therefore, following the Regulations, the service charge invoice will be issued directly from RERA (Dubai’s governmental Real Estate Regulatory Agency), with immediate effect to the hotel condo owners for direct payment.

We are available to provide any additional explanation and details you may require.

 

On Behalf Of

IFA Hotels & Resorts Asset Management

 

With copy to:

Building Manager – SAGA