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What types of commercial real estate are there in Dubai and the UAE

Какие виды коммерческой недвижимости есть в Дубае и ОАЭ

Dubai is a major Middle Eastern industrial and economic center, attracting entrepreneurs from all over the world. All conditions have been created for their convenience: the business registration scheme has been simplified, taxes have been minimized, free trade zones and free economic zones have been created that serve certain sectors of the economy or its segments. The rapidly developing commercial real estate market allows you to choose comfortable premises for work, housing or investing funds.

What to consider when investing in commercial real estate

  1. The demand in this market segment is very high, despite the fact that the supply is very limited. Despite the fact that the construction of new facilities does not stop for a single month, demand among investors and tenants often exceeds supply. Flexible economic conditions attract more and more foreign companies that need offices, trade and exhibition halls, etc.
  2. Increased demand with a small supply ensures a high level of return on investment (ROI). Prices in this market segment are constantly growing, so landlords can return from 4 to 8% of capital investments per year, and if we are talking about warehouse or sorting centers, work settlements, then up to 13%.
  3. Landlords remain in the black even with a low ROI, since lease agreements are usually concluded for at least 5 years, which is a reliable protection of facilities from downtime.
  4. It is also worth considering some negative nuances. With the highest demand for real estate and an increased level of return on investment, its liquidity remains very low. To sell an asset, you will have to significantly reduce the price, which can negate the profit received from renting out the premises.

Types of commercial real estate in the UAE

The commercial real estate market offers hundreds of options that take into account even the smallest details that interest the client – from the total area to the wishes in interior design and the view from the windows.

Offices

Offices

They can be bought or rented. The most prestigious business districts are Business Bay, Jumeirah Lake Towers, Sheikh Said Road. Here you can buy a small well-maintained office with an area of 25-35 “squares” for about 250 thousand dirhams. Rental premises are divided by area into small up to 86 “squares”, medium up to 186 sq. m and large – more than 186 sq. m. The highest annual rental price in the community of Jumeirah Lake Towers: from 55,000 AED per small. The cheapest option can be found in the Deira area: 19,000 AED per year.

Co-working spaces

Coworking is especially popular among aspiring entrepreneurs and freelancers. Such facilities allow you to organize a workspace with a sufficient level of comfort and an acceptable working environment. Not the least role is played by the low rental cost. Payment can be made by the hour, by day, by month. You can rent coworking spaces with an area of 4.5 to 10 in the prestigious areas of Jumeirah Lake Towers or Business Bay for 10-20 thousand dirhams.

Among IT specialists, single network coworking sites are particularly popular, for example, Dubai Bureau, Aue Space, Nuc. Here it is possible to purchase an office and organize it for your own needs. They are usually adapted for conferences, lectures, seminars, product presentations, as well as for salons providing spa services.

Stores

Store in the UAE

Buying a shopping pavilion or an entire store is a profitable investment. Demand for them is high in all communes. It is more profitable to buy at the construction stage, because. in this case, the price will be much lower compared to the price of a similar room on the secondary market.

The more prestigious the community, the higher the rental and purchase price will be. The most expensive options are boutiques in Dubai Mall, Mall of Emirates. The purchase can cost several million. Nevertheless, the demand is so great that it has to be booked in advance.

Smaller retail outlets are also in demand, for example, small pavilions at markets where they sell clothes, souvenirs, and products.

Warehouses

Purchasing a warehouse is a highly profitable investment. Storage and sorting of goods is an integral part of many types of business, therefore, trade interest in warehouses and sorting centers is always great. It became even higher with the beginning of the pandemic, when most merchants transferred their work to the virtual space.

When choosing a suitable warehouse, you should pay attention to the proximity to highways, sea and air ports. The best deals can be found in Jebel Ali, Dubai Investment Park, Al Thru. The rent for the year starts from 23,000 AED, you can buy a warehouse with an area of several tens of thousands of “squares” for about one and a half million dirhams.

Exhibition halls

Exhibition halls

These are halls designed for presentations of goods, including building materials, heavy technical devices, large-sized aggregates, electronic devices. Such showrooms occupy a space of several hundred to several thousand square meters and are located in SEZs specializing in the production of products in need of presentation to buyers. The purchase and rental costs are high: the rent starts from 100 thousand dirhams, and the purchase price of the pavilion starts from 9 million dirhams.

Commercial units

These are premises located on the ground floors of residential buildings, business centers, multifunctional complexes, adapted for small businesses, for example, a gym, fitness center, spa. They can occupy both small areas and entire floors. There are many rental and purchase offers in all areas of Dubai, but Business Bay, Jumeirah Lake Towers, Marina are considered the most prestigious for investment.

Commercial villas

Commercial villas

These are detached buildings of one or more floors with 5-10 rooms. They are perfect for organizing a kindergarten, spa, medical clinic, exhibition hall, shop or office. Usually, cozy green courtyards are organized around such houses, often with fountains and pools where you can relax or have a snack, there are parking lots. The best offers are concentrated in the districts of Mohammed Bin Rashid City, Jumeirah. The rental cost for the year starts from 200 thousand AED, the purchase price – from 2 million.

Buildings

They are larger than villas, are always multi-storey and are suitable for organizing hotels, medical clinics, business or shopping centers. Investments in multi-storey buildings are profitable, since the latter guarantee a high level of investment return. The communities of Deira, Sheikh Said Road, Hills Estate have a lot of offers.

Land plots

Land plots

Land is bought for the construction of a specific object – industrial or residential. There are two types of plots in the emirates: the first (mixed) is suitable for the construction of both production workshops and residential buildings, the second (industrial) can only be used for the construction of industrial facilities: factories, warehouses. It is better to buy mixed–type plots in Jumeirah Village Circle, Business Bay and Al Jadaf, for the construction of industrial facilities – in Al Kuoz, Jabal Ali Frison. The cost of the plot starts from 1 million AED.

Factories

The Government of the Arab Emirates is actively developing the industrial sector of the economy, strongly encouraging investors who want to buy or build a new industrial enterprise. The country has long been a center of metallurgy, mechanical engineering, pulp and paper,      perfume and cosmetics industry. Industrial zones where you can rent or buy a factory are located in the communities of Investments Park, Industries Park and Al Casas.

Work settlements

Work settlements

This type of commercial real estate is in demand on the market among entrepreneurs interested in creating comfortable living conditions for their workers. 80% of the workforce are foreigners working for hire. The owners of factories and factories build workers’ settlements near their enterprises or rent (buy) already ready in the communities of Al Kuoz, Investments Park, Jebel Ali.

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Vladimir Sviridov
Vladimir Sviridov
General Manager RLC Consulting
With a Postgraduate Masters in Finance from The, Moscow State University, Russia. Vladimir started his professional career as an auditor of the financial sector of EY. After that, he worked for several years in senior positions in corporate banking. In 2018-2021, he managed the finances of a large agricultural holding, and is currently responsible for strategic planning, corporate partnership and financial management in the role of General Manager of RLC Consulting GROUP in the UAE.

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