If you are looking for a commercial property to rent in Dubai or planning to buy one in the City of Gold, then there are several aspects that you must keep in mind. While a lot depends on the nature of your business, certain rules would be different for specific sectors, having an experienced and reliable real estate agent by your side can help iron out a lot of creases. In this article, we will offer you some basic tips if you are planning to buy or rent a commercial property in Dubai.
Let’s take a quick look at the commercial property market in Dubai. According to the Dubai Office Market Review report for Q3 2018 by Knight Frank:
- The average office rents in Dubai in the Q3 of 2018 softened by 5.8 percent in a year-on-year comparison with the Q3 of 2017.
- The average prime office rents were registered at AED 246 per square foot per annum. This was a decline of around 4.9 percent in a year-on-year comparison with the Q3 of 2017.
- Vacancy in the core prime assets remained as low as 1 percent.
- The Grade A office rents fell by 8.9%. The average rents now stand at AED 145 per square foot per annum. This rate will probably continue sliding considering the range of supply of Grade A offices and the current vacancies.
- There was a fall of 4.9 percent in citywide office rents in the year to Q3 2018. The average rents now stand at AED 123 per square foot per annum.
- Around 18.8 percent demand for commercial office spaces is from the healthcare sector. Finance, General Trading, and IT followed with a demand of 12.5 percent each.
- Nearly 94 percent of the office space requirements are below 5,000 square feet.
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The report also states that there is a general expectation of the prices to decline further across all market segments. This is due to additional units being delivered in the market. With such market conditions, many landlords are offering attractive deals to tenants and sellers are willing to come down on the advertised rates. However, with the Expo 2020 around the corner, the demand for commercial property is set to increase. Here are some tips that will help you buy or rent commercial property in Dubai:
1. Keep all business documents updated
Before you start looking for commercial property, ensure that you have all your business documents updated and prepared for submission. Your business license is the most important document which will also tell you if you can buy or lease a property on-shore or within the free zone only. Make sure that you get your documents in order even before you start looking for properties online.
2. Determine the size of the property required
Unlike residential property, in commercial property, you must be clear about the amount of space that you require for your business activities. For example, if you have a business which requires a lot of sending and receiving bulk packages or huge boxes, then you need a space with a large warehouse and preferably closer to some main highway. Think about your business requirements well and determine the amount and type of space you require.
3. How much do you want to spend?
When we buy a home, we tend to stretch our budget at times if the property seems perfect for our family. However, buying or renting a commercial property is a business decision and you must ensure that you follow your business budget while finalizing one. Determine how much you will spend on the property beforehand. Dubai has a wide range of properties which will vary in costs to a great extent. Once you are clear about your budget, finding a feasible property would be faster and easier.
4. Market Research
Even if you have been living in Dubai for many years, you might want to dedicate some time in understanding the local commercial real estate market. Where are your competitors opening their offices and why? Certain areas might have specific restrictions on the movement of heavy vehicles, while others might not allow offices from certain sectors. Research well and determine areas where you want to look for a commercial property.
5. Choose a reputed developer
If you are going for an off-plan property or a ready-to-move commercial unit, ensure that you research the developer well. A developer experienced in providing commercial spaces to business owners can answer a lot of your queries. Look at the track record of the developer and if possible, visit an existing project to get a first-hand assessment.
6. The Fit-Out Contractor
A Fit-Out Contractor is someone who turns your vision into reality. Many commercial property buyers or tenants tend to approach a fit-out contractor after finalizing the property. In such cases, the contractor has to make do with the space available and you might have to accommodate some changes in your vision. We recommend that you choose a fit-out contractor who stands with you from ideation to execution and also helps you choose a commercial space that will fit your vision.
7. Real Estate Consultant
There are many legal and documentation formalities that are associated with buying or renting a commercial property in Dubai. While you can do these by yourself, acquiring the services of a real estate consultant who specialized in commercial property can definitely make your life easier. Look for a reputed consulting company who can offer you sound advice, take care of your interests, and hand-hold you throughout the journey.