What Are the Commercial Trends in Dubai Real Estate Market?

What Are the Commercial Trends in Dubai Real Estate Market

Dubai is the most popular of all the emirates in the United Arab Emirates. And one of the top reasons behind its popularity is its eye-catching infrastructure and architecture following by the great employment opportunity for all people throughout the world. Therefore, the Dubai real estate market is on the boom for the past few decades and every other entrepreneur wishes to buy commercial property in Dubai. 

Buy Commercial Property in Dubai

Buy Commercial Property in Dubai

Dubai is a famous commercial hub, that attracts many businesses throughout the world. New policies and schemes were introduced in the city to make a favourable work culture for entrepreneurs and business owners to set up in Dubai. If you’re an entrepreneur and willing to set up your business in Dubai but have doubts regarding buying or renting commercial real estate in Dubai, then you are at the right place. Here we have come up with the reports of commercial real estate experts in Dubai. These reports show some of the best commercial property for sale in Dubai. Also, the reports discuss the legacies involved in renting or buying commercial real estate in Dubai.

The report states that the ex-pat entrepreneurs with the established business plan should buy commercial property in Dubai especially if they wish to stay more than 10 years in the United Arab Emirates. The present market situation provides favourable conditions for ex-pat business proprietors to enjoy strong returns on their invested amount in the next 10 years, which they have spent in buying a commercial property today. It also helps remove the price of rent and build opportunities in order to target budgets on ventures that can develop the business.

Charges for Ready-to-Move-in Commercial Property in Dubai

Ready-to-Move-in Dubai Real Estate

Here is the breakup of the upfront price that business entrepreneurs can expect while buying commercial property in Dubai: The value of the property

    • The transfer charge of 4% to (DLD) Dubai Land Department 
    • 5% of Value Added Tax (VAT)
    • The trustee registration charge is AED 4k + 5% VAT, which comes up to AED 4,200
    • Brokerage cost to the real estate agency

Return of Investment for Commercial Properties in Dubai

Return of Investment

The commercial and residential real estate market in Dubai provides all investors with a competitive and strong return on their investment. Therefore, some of the real estate market surveys in Dubai believe that commercial properties in the city will create better ROI for investors in the future years. The better ROIs generally outgrowths from the commercial properties. And this is based on the fact that the tenants at commercial property stay longer at the same address. The reason why commercial tenants stay longer in the same rental building is that they need to customize the area as per the brand requirements which in the end costs higher. 

Owing to Commercial Properties in Dubai 

According to the Dubai property market law, the freehold commercial space in Dubai must belong to the company’s name. At present, the offshore enterprises listed under the (DMCC) Dubai Multi Commodities Centre or (JAFZA) Jebel Ali Free-zone Authority can officially buy freehold properties in Dubai. Just like this, businesses that are in the free zones of Dubai are also permitted to buy commercial properties in that specific free zone. Buying a commercial space under the name of the company comes with several advantages. It includes securing your invested amount, security, privacy, and complete foreign ownership. 

Renting Commercial Property in Dubai

Renting Commercial Dubai Real Estate Market

Renting commercial spaces in Dubai comes with several legalities and prices. Also, the most important amongst all the legalities is that the commercial property, tenants should create the tenancy contract under Ejari – a government-run program that determines the tenancy contracts in Dubai.

Best Areas for Commercial Properties in Dubai

The entrepreneurs and the business owners have a choice to start their company in Dubai be it the mainland or a free zone area. Both the areas only have different ownership rules. 

Free Zone

Under the free zone area, all the foreign nationals get complete 100% ownership of their business. But they can only run a business and trade along with the companies outside the United Arab Emirates. 

Mainland

Under the mainland areas of Dubai, the foreign nationals used to have a UAE national in order to act like an owner. The business owners in the mainland own a 51 % share of the total business. Therefore, this provision was altered after the introduction of the complete 100% foreign ownership law back in the year 2018. 

But there comes the law along with the complete ownership in both the areas of Dubai. Yes, after the mainland area of Dubai has restricted the foreign ownership with a selected category of business programs. And for this reason, around 95% of new businesses in Dubai prefer to start a business in a free zone area. Besides the free zone area in Dubai, DMCC which is located in the JLT area is the next best and the most considered area for commercial spaces like workspace, commercial floors, or shops. 

It claims 0% personal tax or commercial income tax and it gives complete foreign ownership through an online platform that comes along with all sorts of required facilities to administer your business. Since JLT consists of a residential area and a free zone, it has become easy for people to live and work in the same community through which they also manage to lower their travel time and commute expenses. The JLT area is feasible to many entrepreneurs as it provides a strategic location because the area is nearby to some other business hubs just as Dubai Internet City and Dubai Media City. Business owners who wish to buy or rent warehouses in Dubai can also look towards Dubai South that is close to Al Maktoum Airport.

The Rise in Commercial Properties in Dubai

Trend of Coworking Spaces

At present, the complete stock of office spaces in Dubai stands for about 8.7 million sq m of GLA. There was nearly 80,000 sq m of GLA which was included in Q3 in the year 2019 in Dubai with the accomplishment of the 4 and 5 offices in the Mastercard building and the Trade Centre District in Dubai Media City. Most of the office space demands in the Dubai property market come for small units which are less than 1,000 sq m with a preference for a big hall instead of small cabins or a shell. There are a few initiatives that have been introduced to increase the demand for commercial properties in Dubai. 

There are a number of new initiatives that have been launched to boost demand for commercial real estate in Dubai such as the introduction of One Free Zone Passport which allows free zone companies to increase their construction to the mainland in Dubai. DWTC DAFZA, DMCC, and DIFC are all related to the free zones and have contracted the agreement with the economic development department to provide dual licenses. Such initiatives are likely to generate more demand for workspace across the Dubai real estate market in the coming years. 

Increasing Rate of Hotel in Dubai Real Estate Market

Hotel Dubai Real Estate Market

The hospitality department observed substantial growth in the year 2019 across all the key cities in the United Arab Emirates. Back in 2019, there were 800 keys added to bring the complete number of service apartments and hotels to bring it to around 124,000 keys in Dubai. Since the time the government gave relaxation in the laws on short-term rental properties in Dubai, holiday homes and hotel stays have come in higher demand. Having this opportunity, there comes out an announcement through the IBG group to acquire 10,000 properties to manage and furnish the hotels and holiday homes in Dubai. 

Apart from this, Emaar has also joined this Dubai real estate market with its very own online platform named “Ease by Emaar”, the purpose of this platform is to allow the buyers of the property to rent it for a short-term period. For this reason, the commercial property for sale in Dubai has reached its peak. 

Conclusion

Dubai is a big and one amongst the popular emirates of the United Arab Emirates. Thus, in the past few years, Dubai has evolved and developed to the next level that has made the city most visited all over the world. And just because of this there started many fairs, festivals, and business-related expositions on the global front. 

One of the most visited places with everything in it the commercial properties in Dubai has reached new heights. Be it a tower or a coworking, entrepreneurs started to buy commercial properties in Dubai every now and then to establish their business in a well-structured and highly advanced city. Most of the real estate firms in the UAE are looking for a merger to restore their profits as resumed economic growth is drawing new investments. All the developers and constructors are trying to keep the market advanced with such a product that costs lower than the earlier ones, thus, meeting all the demands of the current market. 

Progressing technological advancements just as new coworking spaces are driving the real estate market in terms of space management with real estate assets. And this concept has made it easy to buy commercial property in Dubai. Such concepts help beginners start with small instead of skipping the idea due to the heavy costs of buying their own commercial space.

Frequently Asked Questions (FAQs)

Are property prices falling in Dubai?

The prices in Dubai fell by 2.93% in the year 2020 during a pandemic but an improvement has been observed from the prior year’s decline which was 4.05 %.

Is 2021 a good time to buy property in Dubai?

Dubai's property market will maintain positive momentum in the 2nd half of the year 2021 because of visa reforms and the successful Covid-19 vaccination program. Also, the government measures to assist the economy spur requests and manage oversupply, as per the reports of the real estate experts.

Is the property market in Dubai actually improving?

The property rates in Dubai have increased by 4.4 percent on average in the first 8 months of the year, recording the maximum annual growth from February 2015, as per the real estate consultancies in the market.

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