Dubai is one of the largest economic centers in the world. Entrepreneurs and startup developers find here fertile ground for development and investors are ready to support fresh creative ideas.
A friendly business environment in Dubai includes such a tool as commercial real estate, which helps companies and entrepreneurs to develop their businesses. In this article, we are talking about Dubai’s commercial real estate market, what types of commercial properties it offers and what the prices are for options available for sale for foreigners.
- Free Economic Zones (FEZ) and their categories
- What you need to know about investing in commercial real estate in Dubai
- Types of commercial property in Dubai
- We will help you buy commercial property in Dubai
Free Economic Zones (FEZs or Free Zones) are a perfect solution for running a business in the UAE. Here, foreigners can freely buy real estate and open a private business without working with local companies and sponsors. According to information from the official website of the UAE government, free economic zones in Dubai are divided into three categories:
- Creative Clusters Authority (DCCA - Creative Clusters);
- Dubai Merchandise Trade Center (DMCC - Dubai Trade Center);
- Dubai Free Trade Zones (DFT - Free Trade Zones).
Entrepreneurs can operate in free zones in a variety of areas, from design and logistics to manufacturing and healthcare. The purpose of the FEZs is to attract foreign entrepreneurs and increase economic activity in Dubai.
The first thing you need to know about commercial real estate in Dubai is that options available for sale in this segment are limited, and demand is consistently high. International companies need warehouses, sorting and office space. There are fewer off-plan commercial options than residential ones, although the demand remains high both among tenants and buyers.
The second point is the assessment of the return on investment (ROI). In Dubai, in the commercial real estate sector, it is quite high and varies from 4 to 8.5% per annum, depending on the area and type of property. The highest and the fastest return on investment since the beginning of the coronavirus pandemic is ensured by workspaces, sorting and storage facilities with up to 13% per annum.
The commercial real estate sector in the emirate offers many options. Investors and entrepreneurs can purchase or rent office space or entire factories.
We offer you to get acquainted with the most popular areas for investment in the field of commercial real estate.
In Dubai, you can find both fully furnished and unfurnished offices for rent and sale. Their cost varies depending on the area, size of the premises and whether it is furnished or not. The best areas to buy offices are Business Bay, Jumeirah Lake Towers and Sheikh Zayed Road.
The average cost of a commercial space up to 35 m² is AED 250,000 (USD 68,063, CNY 456,702).
Offices for rent are divided into:
- Small - up to 84 m² - from AED 19,000 (USD 5,172, CNY 34,709) per year;
- Medium - up to 186 m² - from 72,000 AED (USD 19,602, CNY 131,531) per year;
- Large - from 186 m² - from AED 182,000 (USD 49,550, CNY 332,482) per year.
Comfortable co-working spaces with a relaxed atmosphere and a friendly corporate environment are a great option for investors in commercial real estate, since the capital requirements for starting such a business are minimal and the rent is lower compared to other properties.
You can open a co-working space in Dubai on your own or buy a ready-made franchise or premises. Such spaces are very popular among IT freelancers.
Retail spaces and shops are popular investment options in any area and residential community of the city. You can buy an off-plan, new or resale property. The first option is the most affordable, since the price of options under construction, as a rule, is much lower than finished ones. You can search for options in the most popular business districts of the city such as Business Bay, Downtown Dubai and Dubai Marina.
Properties from 32 m² to 925 m² and more are sold here. Their cost starts from AED 150,000 (USD 40,838, CNY 274,024).
The rent rates for premises with an area from 9.2 m² to 3,500 m² range from AED 15,000 (USD 4,083, CNY 27,396) to AED 4 million (USD 1,089,017, CNY 7,307,308) per year.
Warehouses are another popular type of commercial real estate. They are not only suitable for storing goods, but can also be used for simple production processes. Dubai has a significant supply of warehouse space available for rent or purchase.
The cost of a warehouse in the emirate varies from 1 million AED (272,254 $, 1,826,827 ¥) to 73 million AED (19,874,572 $, 133,358,380 ¥) for properties ranging from 118 to 36.7 thousand m².
The minimum cost of renting a warehouse in Dubai as of May 2022 is AED 22,800 ($6,207, ¥41,651) per year.
Showrooms are ideal for showcasing your products. And we are talking not only about clothes and accessories, but also about household appliances, the latest electronic devices and even heavy equipment. A wide range of areas (from 340 to 4,500 m²) of exhibition halls allows entrepreneurs to adapt them to any need.
Most showrooms in free economic zones are aimed at corporate clients who want to establish closer interaction with end customers.
Interesting offers can be found in the areas:
- Business Bay;
- Al Barsha;
- Ras Al Khor.
The purchase price starts from 9 million AED ($2,450,289, ¥16,441,444).
The annual rent rate starts from 100,000 AED ($27,225, ¥182,682).
Commercial villas can be used as an office, shop, restaurant, private clinic or kindergarten, etc. These properties are very convenient thanks to their layout. They usually have from 3 to 7 bedrooms, equipped bathrooms, parking spaces and comfortable recreation areas. The most attractive areas for buying commercial villas:
- Mohammed Bin Rashid City;
- Umm Suqeim;
The minimum purchase price of a villa in these areas reaches 2.1 million AED (571,734 $, 3,836,336 ¥).
Rent rates start at AED 200,000 ($54,450, ¥365,365) per year.
If you are interested in something bigger, such as opening your own hotel or fitness center, you can purchase an entire building for this purpose. Many buildings available for sale and rent are located in the following areas:
- Dubai Hills;
- Dubai Production City;
- Al Barsha;
In these areas, the purchase price of a property starts from 3 million AED (816,763 $, 5,480,481 ¥).
The minimum annual rent is AED 220,000 ($59,895, ¥401,895).
Did not find a suitable option from available ones? In this case, you can buy a land plot and build your own project. In Dubai, investors are offered two types of plots:
- land of mixed use - suitable for the construction of residential units;
- land for industrial use - for the construction of commercial facilities.
The Business Bay, Jumeirah Village Circle and Al Jadaf are the best destinations for the first option. For the second - Al Warsan and Jebel Ali.
The minimum cost of a piece of land is AED 1 million ($272,254, ¥1,826,824). The value of land depends on its purpose.
The rent starts from 60,000 AED ($16,335, ¥109,609) per year.
One of the most important points of Dubai's prosperity strategy is the development of production. The state is interested in investors investing in the development of this industry, therefore it provides them with tax, customs and other benefits.
Most of the emirate's enterprises are located in the areas:
- Al Qusais;
- Dubai Investments Park;
- Dubai International Park.
The minimum purchase price for a factory in Dubai is AED 800,000 ($217,803, ¥1,461,461).
You can rent a production facility from 1.25 million AED ($340,318, ¥2,283,533) per year.
Dubai is home to a great choice of commercial property. Depending on your goals, you can choose any area and launch any project, from a small clothing store to a full-fledged production. When selecting a property, it is important to take into account that some types of real estate such as factories, warehouses or land plots may be tied to a specific area. If you need detailed advice on buying commercial real estate, contact us and we will guide through the best options and help arrange paperwork.