Must-Know Commercial Trends in the Real Estate Market Of Dubai

Must-Know Commercial Trends in the Real Estate Market Of Dubai

Dubai has emerged as the business and trading hub of the UAE (United Arab Emirates). The growing modern infrastructure in the city is also one of the strong pillars of more employment in the city. New entrepreneurs and aspiring businesses across the globe are coming to Dubai to explore new opportunities. The event of EXPO 2020 has even fueled the attraction of businesses towards the city. As per the current scenario, the commercial real estate Dubai market is on the boom and every other investor wishes to purchase properties.

The introduction of new laws & policies in Dubai is attracting more investment in the city. The global-scale new ventures are looking forward to expanding the network in UAE.

It offers a favorable work culture to every business owner for long-term benefits. In case you’re planning to start a business in Dubai, the below guide on the commercial real estate market is going to be very helpful.

As per the reports, Dubai has a plethora of opportunities in terms of the commercial real estate market for sale. There are several legacies related to renting or buying commercial properties. The expat entrepreneurs are investing in commercial property if they have already passed more than 10 years in UAE (United Arab Emirates). The current market situation is offering favorable conditions to run your business and gain enhanced ROI for the invested amount. Below mentioned is the upfront price to purchase the commercial property in Dubai:

1. The value of the property
2. 4% transfer charge to DLD (Dubai Land Department)
3. 5% VAT (Value Added Tax)
4. Trustee registration charges to real estate agencies.

ROI (Return Of Investment) of Commercial Properties in Dubai

All investors and business owners get a competitive ROI in the Dubai market. If we believe in the commercial real estate Dubai market experts, Dubai can increase the market ROI in the long future. The outgrowth is mainly from commercial properties. The companies tend to stay at the same place for a longer time and that contributes to the economy too. Because of the huge investments in designing and customizing the place, there is no option to change the place and rework from scratch.

Owing to Commercial Properties in Dubai

As per Dubai’s commercial market law, the freehold space belongs to the company’s name only. The offshore enterprises registered under (JAFZA) Jebel Ali Free-zone Authority or (DMCC) Dubai Multi Commodities Center are allowed to buy freehold commercial places in Dubai.

Hence, businesses that are available in Dubai-free zones can buy commercial properties in that specific area. Keeping the same commercial space name as the company has its benefits like investment security, privacy, foreign ownership.

Further, rented commercial spaces in Dubai come with several legal complexities and prices as well. You should make a tenancy contract under the Ejari program by the Dubai government.

Top-notch Areas for Commercial Properties In Dubai

Dubai, the global trade hub offers both mainland and free zones to entrepreneurs who wish to start their business. The crucial points are the terms and conditions associated with both separate commercial area options.

Free Zone

This area of commercial units provides 100% business ownership to foreign nationals. The only condition associated is that trading is only allowed with ventures situated outside the United Arab Emirates.

Mainland

The mainland areas of Dubai offer 51% ownership only if there is an acting UAE national owner. However, the company share remains with the foreign national itself. The regulation was modified after 100% foreign ownership law was introduced in Dubai.

However, even after having a claim to offer 100% ownership of the company, mainland areas lack to provide the same. There are numerous restrictions and conditions associated with the modified regulation. 100% ownership is only associated with a certain selected category. That's causing trouble for new startups and hence around 95% of those switch to commercial properties in the free zone.

Apart from the free zone, DMCC in Dubai is one other comprehensive area offering commercial space units. The area in JLT keeps 0% commercial or personal tax. Their online platform is fully loaded with the necessary facilities to start your business. With the benefit of complete company ownership, a huge segment of newbie business owners is actively switching to the DMCC platform.

JLT is a combination of a residential area with free zones. This fact has been a game-changer for the area allowing the same community to live and work. It will also ease out the management and curb the travel or commutation expenses. The JLT area has zero accessibility issues, unlike various other commercial unit areas. Your business can get enough exposure and ease of connectivity with industries, transportation, logistics, airport, Dubai Internet City and Dubai Media City, etc.

Growth of commercial properties in Dubai

In 2019, the stock of commercial office spaces was nearly 80,000 sq m GLA & which has risen to 8.7 million sq m of GLA. The city has seen 4-5 offices in the Mastercard building and the Trade Center District in Dubai city. The majority of the office space demands come from small space units (1000 sq m). In addition, the big areas and commercial cabins are contributing more to the city’s infrastructure. There are several other initiatives introduced in the trading hub to raise the demand for commercial spaces in Dubai. Few such are One Free Zone Passport that boosts construction in mainland Dubai.

DWTC, DMCC, DIFC, DAFZA, are concerned with the free zones along with valid agreement with the economic development. These initiatives are creating more demand in the Dubai real estate market.

Increased Hotel In Dubai Real Estate Market

The hotels and hospitality sector of Dubai is witnessing unmatched growth in 2019. The industry is going to spread in multiple cities of UAE. In 2019, around 800 service apartments were added to contribute to the city’s economy. That number has risen to 124000 service apartments now.

With more relaxation by the government in the commercial real estate market, rental properties, holiday homes, and hotels are witnessing all-time high demand. The government is even making the most of the opportunity and doing every bit of important thing to scale up the potential industry. New holiday homes, hotels, and hospitality properties are getting managed and furnished at a huge scale in the Dubai market.

Emaar has also invested in Dubai’s real estate market and came up with a dedicated platform "Ease by Emaar". The major goal of this platform is to keep the rented properties easily accessible for investors. With short-term period lease options, this channel has boosted the commercial property for sale in Dubai.

Final Word

Dubai is one of the most popular cities of the emirate and is constantly on the rise. With the advent of EXPO 2020 & government considerations for relaxation in business laws, the city has evolved into a potential real estate market. It has become the most visited city in the world and that has even enhanced the commercial properties sale & purchase. Because of the multiple events, fairs, festivals, more and more global scale businesses are switching to Dubai.

Commercial real estate has specifically witnessed new growth in the past few years. Entrepreneurs are considering the exposure and business benefits of the city and hence investing in co-working spaces, warehouses, offices, etc. Having your business established in such an advanced city provides the upper hand benefits just because of the right location. Both real estate company in Dubai and individual builders can meet the current market demands. They are bringing more effective construction options to deliver the best-ever properties at budget prices.

The technological advancements in the commercial spaces are driving more business to Dubai. Things are getting much better in terms of space management with real estate assets. Simply put, the city has already simplified the commercial property purchase in Dubai to a huge extent. The newbie entrepreneurs can begin with the small investment or renting a space and flourished ones can make the bigger investments.

FAQs (Frequently Asked Questions)

Do property prices in Dubai see an all-time low?

The commercial property prices in Dubai fell by 2.93% in 2020 in the event of a pandemic breakout. However, the situation started normalizing and an improvement of 4.05%.

Is it a good time to invest in Dubai’s commercial real estate market?

As per the prediction, Dubai’s real estate market is witnessing positive momentum in the second half of 2021 as the city is coming back to normality after a year or so. The government’s relaxation in the commercial property laws is what has embarked on boosting the economy.

Is the Dubai property market improving?

The commercial property market in Dubai has increased by 4.4% in the first 8 months of the year. As per the real estate company in Dubai and experts, it is maximum annual growth in the market since February 2015.

Mr. Dinesh Ramchand is a seasoned businessman well known for his negotiation skills, business acumen and vibrant personality. He is also a successful director who handles his business with a strong passion.