Covid-19 has had a huge impact on the economy. Due to lockdown, people stayed in homes and stopped shopping except for daily necessities, many have lost their jobs, they were unable to pay rents. Some Expats were forced to return to their home countries.
The Executive Vice President of the Real Estate Development Company of the Bukhamseen Holding Group, Suleiman Al-Mudhayan, voices his concerns that the businesses are enduring the effects of the curfew and he suspects that the crisis will worsen in all real estate sectors. The commercial sector, being the most impacted, has still not recovered. He fears that if new prohibitions and closures are re-imposed, matters will get worse- an Arabic daily reported.
When asked to estimate losses Al-Mudhyan said that it is not possible to estimate as the official report has not been published from any government or private companies.
Talking about the solution to tackle this financial crisis he advocated that the only way is to raise general awareness and commitment towards adhering to the health guidelines. This will help curb the spread of coronavirus this will indeed ensure that the businesses will be able to continue avoiding returning to the curfew.
As for the support provided by the state to the commercial sector and companies during the crisis, he said, “Bank facilities have been granted to pay salaries and loans, and we hope that flights will be opened soon and employees can return from abroad to resume their work, which would help to push the economy forward and support economic activities.”
Abdullah Al-Zamil, the specialist in real estate affairs, explains that the curfew at any stage has impacted the economy greatly by the suspension of many commercial activities in all sectors.
As for the commercial sector, he noted that due to the suspension of many activities and restrictions, 43 hotels suffered losses at an estimated amount of KD18 million dinars, according to a statement by the head of the Salhia Real Estate Group, Abdulaziz Ghazi Al-Nafisi, and this reflects the impact of the coronavirus measures on commercial activities, especially medium and small enterprises.
He added that it seems that the damage will be great on all sectors, especially the commercial and investment sector, pointing out that it is very difficult today to talk about developing solutions for a specific sector without looking at the impact on the economy in general.
Al-Zamil stated, “All sectors are interlinked, and therefore the government must understand the extent of the damage to the economy and predict the forthcoming losses, especially since the government is facing a budget deficit, the country needs the support of private sector more than before, so proper measures and decisions must be taken to ensure no more damages occur, and the government must take into account the economic aspects.”
Vice President of Real Estate Residents Union Abdulaziz Al-Shaddad pointed out that it is evident there is no support for the private sector, so all investors must be protected from the repercussions of any possible measures taken against the coronavirus, and therefore the state must bear the damage that will befall traders and investors, by setting up support plans especially for the real estate sector that has been affected.
Al-Shaddad added that it is not expected that the commercial sector crisis will end except with actual economic reforms that will result in activity and growth in the private sector, which only be done with the outlining a plan for encouraging government decisions for investment and capital, in addition to the government displaying its seriousness in pumping liquidity into development projects for industrial cities and trade free zones, and diversification of resources, such as food projects and their industries, raising the rates of national products and encouraging citizens to establish productive projects.
He noted that these solutions represent the utmost necessity to save the economy, and at the same time address the commercial real estate crisis.