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Commercial Guide

Commercial Guide

Your guide to buying commercial property in Dubai.

 

 

 

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Reason of purchase

If one‘s intention is to sell locate their office then it is wiser to pay rent to oneself. As soon you have sufficient capital to make the down payment, you can convert the rental payment into mortgage payment that will generate a return – just like buying a home instead of choosing to rent an apartment in Dubai.

Market knowledge

A real estate agent who deals in commercial properties would be a great help. A well reputed realtor can help you save time. Moreover, an experienced and competent realtor can give knowledge about demographics, plans for growth and new developments in the area.

Type of commercial property

The very nature of the commercial property one intends to buy affects the transaction and your choice. For instance, there is a big difference between buying a restaurant building and a corporate office space. You may be purchasing a commercial building as a location for your business or as an investment. If you are purchasing for investment, then you might want to know about the highest yielding prospects. However, if you want to locate your office then you might look at other factors that will affect your business directly

 

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Buying/building more square footage than needed

One can use that space later on, and can generate rental income on extra space bought.

Research

Some of the areas in Dubai do not allow specific types of businesses, thus land use laws can affect the choice you make.

 

Parking situation

Some commercial buildings do not offer parking spaces, for some businesses this can be a major drawback.

Documentation

Sort out all required documentation that includes

For a company

1. Certificate of Incorporation

2. Memorandum and Articles of Association 

3. Board Resolution

4. Signing Authority letter

5. Passport copy of signatory

For an individual buyer

1. Passports

For an overseas company

1. All of the above documents attested by the UAE Embassy

Financing options

This preserves your capital for better utilization, keeps your cash flow high and allows you to redeploy ‘capital savings’ into other profit-generating business areas. Be sure you understand all of the economics.

Account for maintenance costs

One should consider refurbishing, maintenance and air conditioning costs when finalizing a space for office, as it can have a significant impact on costs borne later.

Option of tenanted property

When purchasing a commercial property with intention of generating returns from it, one can eradicate the risk of void periods by purchasing a property with a tenant.

Agreeing to buy

Once you have decided on your property of choice, a sale and purchase agreement will be drawn up confirming the agreed price and your solicitor's details. Once the agreement is finalized your deposit shall be passed onto the owner or landlord to secure the property.

Transfer of ownership title

The final stage of the commercial buying process is the transfer of ownership and title from the seller to the buyer. There is usually a transfer fee involved and this can vary from developer to developer.

Get a quality tenant

A competent real estate agency can give access to a quality tenant. A large corporate tenant is most likely not to default on rent and rent it property for a longer period of time.

Freehold or freezone properties

Freehold property gives the buyer ownership, free of any contract or lease agreement. The buyer of the property does not need anyone for support. The property ownership is however, affected by the rules and regulations of the country.

Free zone is defined as an area within a country for the time being, regarded as being outside the country’s customs territory; hence importers can bring foreign goods without paying duties and excise taxes

Government charges

Although the buyers of commercial properties in Dubai don’t have to pay any taxes, but a transfer fee of 2 per cent of the property price is charged by the Dubai Land department. Buyers have to pay an additional 0.25% of the value of loan taken if the property is mortgaged.

Service Charges

Service charges for the maintenance of the property can vary depending on the area, location, and facilities provided

Typical timeframe for purchase of property

The process takes 2 to 6 weeks, depending on the status of the property and procedures involved.

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