Complete Guide on How To Rent a Commercial Space in Dubai

A Complete Guide on How to Rent a Commercial Space in Dubai

Being an entrepreneur is hard. Physically, Mentally and Financially taxing, the entrepreneurial job keeps one on their toes at all times. On top of challenging self-doubt, managing the complexities, finding like-minded people who would not only support you but help you grow as well, handling the logistics, managing the cash flow, and financing everything, entrepreneurs have to ensure everything is working smoothly and efficiently. A huge part of managing and reinforcing a successful business is finding a suitable space for you and the business. Where you work plays a very major role in your business’ growth. For all of you starting in business, here is our beginner’s guide to renting a commercial space in Dubai.

Dubai has become one of the most preferred destinations for both commercial and residential. The city is teeming with fully furnished, cutting-edge offices that are offered for sale, lease, and rent. Most businesses start by leasing or renting a commercial space in Dubai before relocating to more permanent offices they own for their operation.

A trade license issued by the Dubai Economic Department (DED) or a registration in a free zone like the Dubai Multi Commodities Centre (DMCC) or Dubai Silicon Oasis is required for all businesses looking to purchase, lease, or rent a commercial property in Dubai (DSO).

Few Tips to Bear in Mind Before Renting a Commercial Space in Dubai

Renting a Commercial Space in Dubai

Before you lease a commercial property in Dubai, you might want to check out the following tips and keep the following in mind:

  • Always Consult First

Commercial real estate agents have deeper market knowledge and a better understanding of trends that will be advantageous for you. Seek their help to facilitate your decision-making. 

  • Whether it’s on-Shore or in a Free Zone, Location is Crucial

Location is crucial since it affects ownership and costs. It is necessary to share ownership with a UAE citizen in on-shore Dubai (partner). Alternatively, foreigners who work in the free zone keep complete ownership.

  • Obtain The Necessary Paperwork

When renting a commercial property in Dubai, preliminary approval from the licensing authorities that is of relevance to you is necessary. Additionally, it is critical to show that the property is yours, that it is in good condition, that it complies with any existing plans, and that you have the necessary permits to utilise it.

Professional Advice Before Renting Commercial Property in Dubai 

Renting Commercial Property in Dubai 

As mentioned above, you must seek consultation and professional help from an expert to make an informed decision. 

Speaking with a real estate professional if you want to rent an office in Dubai is essential. When renting a commercial space in Dubai, particularly in the F&B or healthcare industries, certain requirements must be followed. Working with a real estate agent is still advised even if your business is different for the following reasons:

When deciding to rent a commercial property in Dubai, they can provide you with the appropriate guidance. They are good at negotiating on your behalf and sealing the best transaction since they are more informed about the typical asking price, market trends, and other important facts.

While having a real estate agent by your side is advantageous, make sure you research the area. Make a list of inquiries you want to make regarding the potential Dubai workplace for rent before you meet the agent. Consider crucial elements like:

    • How many rental payment checks are there,
    • Public transportation is available,
    • Required authorisations, etc.

Verify That All The Necessary Documents Are in Order

As mentioned above, you must sort and verify all the documents necessary to use commercial premises. Dubai has defined rules. You cannot utilise your workplace as a warehouse and vice versa. Therefore, you ought to have all the required paperwork. This comprises, but is not restricted to:

    • Proof of corporate ownership
    • The condition of the property
    • Premises’ adherence to the existing blueprints
    • The authorisations required to utilise the location

Ejari is the authority on Future of real estate in Dubai and regulates all real estate transactions, including commercial leases. Therefore, to avoid misunderstandings later, it’s important to ensure that all contractual terms and conditions are clearly stated in the contract.

Make sure it is specified in the contract if the commercial property Market Dubai that you have chosen needs alterations, such as the installation of cubicles. Ensure all of your company’s details, including their nature, are accurately registered to avoid misunderstandings.

Sorting all your documents will help you understand the next step, ensuring you are qualified to rent a commercial space in Dubai. 

Do You Qualify for Commercial Space Rental in Dubai?

Do You Qualify for Commercial Space Rental in Dubai

Before setting your business in motion, you must determine if you are eligible to rent a commercial unit in the emirate of Dubai. Please note that you are eligible to rent out commercial space in Dubai only if you possess a relevant trade license. 

Obtaining a trade license in Dubai also enables you to focus on areas in Dubai that provide particular renting a commercial property in Dubai. According to where you intend to establish your business, a license may be issued by a different body. The Dubai Economic Department in UAE is responsible for issuing all permits for domestic businesses.

Let’s say you wish to establish your company in a free zone. In that instance, the relevant free zone authorities, such as Dubai Multi Commodities Center (DMCC), Dubai Silicon Oasis (DSO), and others, issue the licence. The general prerequisites for starting a business in a free zone are listed below.

Choose The Best Area in Dubai to Rent Commercial Property For Your Business. 

Best Area in Dubai to Rent Commercial Property

When renting a commercial space in Dubai, there are a number of considerations. Additionally, entrepreneurs running businesses in Dubai have access to various commercial licenses. You must choose the ideal location to rent commercial real estate in Dubai for your company based on your license.

For instance, you must ensure that your commercial workspace is situated in the same location as your TECOM-free zone license. TECOM includes 11 communities of various businesses and are managed by Dubai Holdings, a sovereign investment vehicle for the Government of Dubai. Each of these neighbourhoods specialises in a particular industry.

Additionally, consider the following:

    • The feasibility of the business you have from the chosen location.
    • If your commercial space is a showcase for walk-in clients, the location must be accessible for the target customers to produce sufficient foot traffic.
    • Whether there is enough parking for your amount of staff.

Researching when choosing where you should rent an office space in Dubai is very crucial. It is always good to put in your research work before deciding to rent a commercial space in Dubai based on your trade license.

Visas Based on Type of Office & Employee

Businesses are permitted to provide visas to foreign employees based on their skill level. But this advantage is constrained by the kind of workplace and the available area. Please bear the following in mind: 

    • These visas may be obtained for businesses using Flexi-desks (i.e. shared office).
    • A business with an office that is serviced may obtain up to five visas.
    • A business that uses physical space might apply for visas depending on the area devoted to offices. Every nine square metres is eligible for one visa application.

Pay Heed To Your Budget

Your budget is a very crucial factor to take into account when leasing a commercial space in Dubai. In addition to the annual rent, you must also consider the sum of the security deposit and all the other associated costs before making an informed decision.

You can also research any potential rent hikes by calculating the RERA Rent Increase to avoid any unexpected, unfortunate events while renewing the tenancy agreement for your office space in Dubai. You’ll be able to find various calculators for RERA Rent Increase online. 

Various Types of Lease Agreements 

Various Types of Lease Agreements 

In Dubai, there are 4 different types of typical lease agreements.

  • Gross Lease

As the name suggests, the resident is in charge of purchasing the land on which the building will be constructed. When the lease ends, the landlord receives the building and the land. 

  • Land Lease

As the name suggests, the resident pays for the piece of land to construct a building to carry out business. Once the lease ends, the landlord gets possession of the land and the building.

  • Triple Net Lease

According to the triple net lease, tax, maintenance, insurance, and rent are all the resident’s responsibilities. This kind of lease is advantageous to landlords.

  • Modified Net Lease

When the landlord and resident split all costs equally, it is called a Modified Net Lease. In the emirate of Dubai, this method of leasing commercial real estate is highly popular.

Things To Do Post Renting a Commercial Property!

When you’re done with the task of finding the ideal commercial rental property in Dubai and signing the lease, do the following:

  • Make The Appropriate Arrangements

Following the leasing agreement for business property in Dubai, you must:

    • Make certain that you get water and electricity connection from DEWA.
    • Secure your business continuity and purchase property insurance.
    • Make provisions for the office’s interior design. If you’ve rented a property that is ‘shell and core’, you might need to engage with an expert. You can look at a few of Dubai’s best interior design firms for the position. After all, making a business property in Dubai look attractive to potential consumers when investing a sizable sum in renting makes sense.

When allocating funds for business leasing in Dubai, don’t forget to consider the cost associated with all of these items.

  • Changing Interiors 

Changing Interiors 

Making internal changes is not required, but if you must, ensure you do it correctly. First, the landlord must agree to the clause and include it in your rental agreement.

Following that, you must acquire a Non-Objection Certificate (NOC) from:

    • The Landlord
    • The Builder or building manager 
    • Dubai Municipality or the Free Zone Authority.

Please remember that you cannot make alterations to the property without approval while renting a commercial space in Dubai.

  • Subletting The Commercial Property

Are you wondering if subletting commercial real estate is permitted in Dubai? Then, dear readers, the answer is yes! In Dubai, you are permitted to sublet office space under you with the landlord’s written consent. Including the subletting clause in the contract is recommended before the lease is signed to avoid confusion and conflict.

  • Terminating The Commercial Rental Lease

In Dubai, a commercial property lease typically lasts one year. The landlord and the tenant can mutually terminate the lease after a year. If they don’t opt to cancel or modify it, the contract will be automatically extended for an additional year.

You can face the consequences if you decide to end the contract early to lease commercial real estate in Dubai. In this situation, the landlord is entitled to pay for the damages incurred due to the contract’s unfulfilled term. This can take the form of two months’ worth of rent. Both parties can take their case to Dubai’s Rent Dispute Settlement Center if there is a significant disagreement. 

  • Rent Payment For Commercial Property

Rent Payment for Commercial Property

No matter what property you’re renting a commercial space in Dubai, checks are the most common form of payment for rent in Dubai. The owner’s or the business’s bank accounts may be used to issue checks for commercial properties. Depending upon the agreement of the landlord and renter, the rent can be paid with one or more checks. A security deposit of 5% of the rent is also required under the rental agreement.

To Sum it Up

When compared to Q1 2021, the sales value of the commercial real estate in Dubai increased by 107% in Q1 2022. According to DXB Interact, the first quarter of 2022 saw a record-breaking increase in sales for the Dubai real estate market, reaching approximately AED 56 billion. Leasing or renting a commercial space in Dubai emirate is a great idea, as the upward swing reflects the immense demand for the same. 

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Frequently Asked Question (FAQs)

What are the different kinds of Commercial Properties available in Dubai?

In Dubai, it is simple to discover office spaces, retail stores, warehouses, and showrooms for rent. In Dubai, you can buy commercial buildings if renting is not your preference.

How is Dubai's rental market doing?

In the year leading up to June, average rentals rose by 21.7%, with increases of 21.2% and 24.7% for apartments and villas, respectively. The average annual rent for an apartment was Dhs85,294, and for a villa was Dhs255,437 as of June 2022.

Which Dubai rental yield qualifies as good?

Apartments in Downtown Dubai have an average rental return of 5.43%, and their average selling price is little more than 2.1 million AED, or USD 572,000. Because of the area's high visitor popularity, purchasing short-term lodging there is a great idea.

What would you say is the difference between shell and core units and fitted united?

Shell and core or fitted commercial real estate are both available in Dubai. When you choose a shell and core unit, you receive a room that is empty of any fixtures or furniture. However, the pantry and restrooms are primarily located in communal areas. Fitted units frequently come with everything you need to get your business up and running. These apartments often have workstations, conference spaces, and occasionally a reception area. In general, fitted units cost more than shell units.

Meghna Chakraborty Definitely on the spectrum of being socially awkward, Meghna prefers to write over clumsily explain what she wants to say! No matter how much she says she likes you, if you have a dog, she'll probably like your dog better.... A couch potato, she chills harder than you party! She's also a very proud Hufflepuff!
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