Commercial & Industrial Property UAE

Commercial properties in free zones and mainland UAE have significant differences:

• Ownership Structure: Free zone properties allow 100% foreign ownership, while mainland properties traditionally required local partnership (though recent changes allow 100% foreign ownership in certain sectors).
• Business Activities: Free zone properties are typically limited to operating within the free zone or internationally, while mainland properties allow business operations throughout the UAE without restrictions.
• Taxation: Both offer tax advantages, but free zones often provide additional benefits including customs duty exemptions and guaranteed tax holidays.
• Location: Free zone properties are limited to designated areas, while mainland properties can be established anywhere approved for commercial use.

Our consultants can help determine which option best suits your business objectives.

Commercial property purchase payment terms in the UAE typically follow these structures:

• Off-plan Properties: Usually requires 10-20% down payment followed by installments tied to construction milestones, with 70-80% due upon completion.
• Ready Properties: Standard terms involve 10% deposit upon signing the MOU, followed by 90% upon transfer of ownership at the land department.
• Developer Payment Plans: Some developers offer post-handover payment plans spanning 3-5 years with structured quarterly or bi-annual payments.

Payment terms are negotiable, and our consultants can help secure favorable conditions based on your financial situation.

Commercial lease terms in the UAE typically follow these standard practices:

• Lease Duration: Standard commercial leases range from 1-3 years for offices and retail spaces, while industrial properties and warehouses often have longer terms of 3-5 years.
• Renewal Terms: Most leases include renewal options with notice periods of 60-90 days before lease expiration. Renewal terms often include rent review provisions.
• Security Deposits: Typically 5-10% of the annual rent, refundable upon lease termination subject to property condition.
• Maintenance Responsibilities: Usually divided between landlord (structural maintenance) and tenant (interior maintenance).
• Break Clauses: Can be negotiated to allow early termination with notice periods of 2-3 months and potential penalties.

Our consultants can negotiate favorable lease terms tailored to your business needs.

When purchasing commercial property in the UAE, expect these additional costs beyond the property price:

• Transfer Fee: 4% of the property value paid to the Dubai Land Department (DLD), plus AED 580 admin fee.
• Registration Fee: AED 4,000 for properties valued above AED 500,000, or AED 2,000 for properties below this value.
• Real Estate Agent Fee: Typically 2% of the purchase price if using an agent.
• Valuation Fee: AED 3,000-5,000 depending on property size (required for mortgage applications).
• Mortgage Registration Fee: 0.25% of the mortgage amount plus AED 290 admin fee (if financing the purchase).
• Property Insurance: Varies based on property value and coverage needs.
• Maintenance Deposit: Required by some developers for service charges, typically 5-10% of annual service fees.

Our consultants provide comprehensive cost breakdowns specific to your property investment.

Commercial property valuation in the UAE follows these methodologies:

• Income Approach: Evaluates property value based on rental income potential and capitalization rates, commonly used for income-generating properties.
• Comparative Market Analysis: Assesses value by comparing similar recently sold properties in the same area, adjusting for differences in specifications and facilities.
• Cost Approach: Calculates the cost to replace the building plus land value, minus depreciation, often used for specialized or unique properties.
• Residual Value Method: For development land, calculates potential value after development less construction costs and profit margins.

Valuations should be conducted by RICS-accredited valuers or those registered with the Dubai Land Department. Our consultants coordinate professional valuations to ensure accurate property pricing for sales or financing purposes.

Yes, foreign companies can purchase commercial property in the UAE, but with specific requirements:

• Free Zone Companies: Foreign-owned free zone companies can purchase property within their respective free zone and in designated freehold areas.
• Mainland Companies: Foreign companies with a mainland presence can purchase property in designated areas, provided they have the appropriate commercial license with relevant commercial activities.
• Offshore Companies: Generally restricted to purchasing property in specific investment zones as determined by each emirate.

The regulations vary between emirates, with Dubai and Abu Dhabi having the most liberal policies for foreign ownership. Our consultants can guide you through the specific requirements for your company structure and desired location.