Tips on commercial property investment in Dubai

2015 was a year of highs and lows for almost every market, from real estate to oil. However, the UAE’s real estate market seemed to have maintained a stable trajectory, showing steady growth and offering greater choice for tenants as the emirate continues to be a global and strategic hub. While prices may have dipped, we should remember that the softening is coming in after three years of sharp price growth and should not be compared to the decline that we witnessed during the 2008-2009 crises. Moreover, it is likely that the softening of prices and price growth of commercial property in Dubai will continue into 2016 given global economic conditions, such as, the Chinese economy, the appreciating dollar and Euro Zone concerns.
Here are few property tips that savvy investors of commercial real estate might want to consider.

1. Seek profitable tenants: As an investor, your aim would be to focus on assets that offer robust income producing potential. This means closely looking at the buildings tenants. If you are to attract high paying tenants, then reducing rents will no longer be enough. Look into asset management, manage your commercial property better than the next warehouse or office down the road and you will attract more profitable tenants.
2. Explore other markets: Look for opportunities in global markets that have been reported to reach their peak in terms of pricing and saturation. Find the right property to invest in such primary markets and you’ll be on your way to taking advantage of high rental growth that they may offer.
3. Understand the risk and return: When it comes to property investment in Dubai or anywhere else in the world, investing in residential property is relatively lower risk and as a consequence, offers lower returns than commercial property. Commercial property comes with higher risk as it could take months and possibly more than a year to find a new tenant for a office space, while securing a new tenant for an apartment or a villa might only take weeks.
4. Consider maintenance costs: While upgrading a residential property in terms of a paint job or replacing floor coverings in the kitchen may not cost much, refurbishing a commercial property can be an expensive affair.
5. Read the lease carefully: While a residential lease is short, leases for commercial property often run into 50 pages in length and generally require a solicitor to draw them up. So, read the lease carefully and if you are unsure of anything, get a legal professional to clarify it for you.

With the market maturing, 2016 is a great year for property investment in Dubai. Click here for the latest commercial property in Dubai.

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Cost of setting up Business in Dubai

Finding a local UAE national sponsor is mandatory for foreigners, who want to setup their business in Dubai. Company owner must have a legal local partner possessing 51% of the shares in company. Whereas, expat entrepreneurs usually possess 49% shares in the business. It is possible for shareholders to adjust these terms via Memorandum of Understanding.

The tax free nature of doing business in the Emirate is very alluring for many investors and business persons.  Irrespective to the nature of your business, being an entrepreneur what you need to consider first is the primary cost of setting up business in Dubai. Whether you are going establish a franchise of an existing company or you want to establish a brand new business in the city, you need to consider paying some essential cost.

•    Every entrepreneur is bound to pay fee to get trade license to become eligible to establish a business in emirate.

•    Everyone who wants to setup business in free zones in Dubai is required to pay some amount as fee. Every free zone has its own setup procedures and fees. Whereas, few of the free zones also consider the bank balance of applicant and allow only those candidates who have minimum amount of capital according to their criteria.

•    Other important expanses you need to keep in mind, while running business in free zone include the amount you will spend to sponsor your employees to provide them visas and legal documents to enable them to live in the country.

•    If you own a trading firm, then you need to consider future expenses of importing goods to the country. Check Dubai Customs guidelines to know what is allowed to bring in with cots of import. If your company is trading within Gulf Council Countries then custom fee is nominal, in contrast to those who are trading across the world. 

There are many benefits of working with local partner as they will be very well aware with social, cultural and business etiquettes in the city. Business licenses can be obtained for both mainland and free-zone areas. Depending on your budget and nature of business you may choose suitable sector to setup your business. If you don’t have huge capitals setting up your business in Dubai Free Zones could prove pricey due to high property prices. If your business directly involves consumers then it’s good to find suitable office space in commercial projects located on the mainland.

Cost of setting up business is very important aspect of establishing business irrespective to the nature of business. This cost does not include the capital amount of your investment.

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Prospects of investing in Dubai Real Estate in year 2014

Market surveys showed that real estate sector of UAE had been showing great signs of recovery after increased foreign investments. Especially the two leading emirates Dubai and Abu Dhabi had played a great role in rebounding of property market. Record transactions had been observed in small duration of time during year 2013. A market survey conducted by Royal Institution of Chartered Surveyors (RICS) in 2013 listed UAE commercial property market on first position on Occupier Sentiment Index (OSI) whereas on second position on its Investment Sentiment Index (ISI).

Win of EXPO 2020 and City Momentum Index

After successful bid to host EXPO2020, city momentum index by Jones Lang LaSalle (JLL) listed Dubai on third position among 20 world’s dynamic cities. City Momentum Index (CMI) is the criteria which have been considered to rank cities. Occupying leading position in CMI’s list means Dubai possess strong short term socio-economic and commercial real estate momentum. After becoming the primary standard for calculating CMI, commercial real estate sector is not only considered as the outcome of city’s success rather it becomes driving factor, which has the ability to drive city towards success. 

Having considered the connectivity with other countries across the globe and emirate’s status of being the business and trade hub in the region of MENA enabled Dubai to become investment hotspot in Middle East. Moreover, the win of EXPO 2020 bid has greatly enhanced the confidence of city while improving city’s momentum towards success.  

Real Estate Transactions in year 2013

Dubai Land Department DLD has issued a report in the mid of January 2014 about total real estate transaction in Dubai for year 2013.  According to this report the total amount of land or property, sold or mortgaged has greatly increased from Dh 154 billion in 2012 to Dh236 billion in year 2013.  In terms of percentage the total rise in property transactions is 52%. Specifically for pieces of land total transactions have increased to 50 percent from Dh111bn in 2012 to Dh166bn 2013.  Secondly the total percentage transactions for complete apartments and villas have been raised to 52% with total amount of Dh62bn.

After considering this gigantic rise in property transactions in Dubai real estate sector, Knight Frank issued a report about Dubai property market and clearly mentioned that Dubai real estate is expected to be top performer on international level in year 2014 with asset price rise of 10 to 15 percent. Furthermore, DLD director General Sultan Butti bin Mejren has also estimated the percentage rise is asset prices of 35 to 40 per cent for year 2014.

Dubai has successfully gained the status of global gateway and trading hub on international levels. Being the magnet for foreign investors, Dubai business sector clustered top investors across the world. With progressing economy the emirate is capable to offer high class business and financial services for entrepreneurs. The positive market trends improve investor's confidence and they consider making investments in business and real estate sector in Dubai.

Angela Davis:

Angela Davis is a passionate and an experienced writer and social media consultant. She always try to produce unique and stimulating content for their valuable readers.

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Office Space in Dubai for your Small and Corporate Business

Every business venture needs an office space – whether it’s a start up or an expanding enterprise. Before you start looking for space, you should outline what you want you’re your business. If you’re just starting up and looking to keep costs down, then a virtual office will be most cost effective. Providing you with an office environment without having to lease office space, it offers you the advantage of a business address, infrastructure such as telephone, Internet and equipment. On the other hand, if you need a physical office space without the hassle of utility bills and office admin, then a serviced office is a good option. Giving you equipped space, it allows you to get your business up and running right away and upgrade as and when your business grows.

However, if you need a large office space in Dubai, then conventional offices spaces are the best option. Detail your requirement to make sure you locate the right Dubai commercial property. Ask yourself if you need individual offices or an open plan space. What meeting or pantry facilities will you need? Would you need parking for customers and staff? Finding the right office space in Dubai can have a huge impact on employee productivity and in turn the bottom line. As one of the world’s leading business hubs, Dubai offers small and big businesses a great selection of commercial real estate. With new businesses looking to establish a presence in Dubai and existing companies looking to expand their presence, Dubai commercial property is growing each day.

Dubai International Finance Centre, DIFC, is one of the world’s fastest and most attractive financial zones and home to some of the world’s biggest firms. Here are some of the best commercial real estate districts for established businesses and start ups. A prestigious address, DIFC offers some of the best office space in Dubai at Grade A towers such as Liberty House. Close to the metro, steps away from shops and restaurants and within easy access to Sheikh Zayed Road, DIFC offers commercial properties in Dubai that come with shell and core and fitted office spaces. Business Bay, an upcoming residential and commercial real estate cluster, is a visionary project featuring premium waterfront towers set amidst landscaped gardens and pristine surroundings. Some of the prominent towers in the community include The Prism and Al Manara. Offices are conveniently planned to suit the needs of modern businesses. Most towers offer state-of-the-art health clubs, gymnasiums, temperature-controlled pools and business centres. Another popular destination to explore commercial properties in Dubai is TECOM.

A free zone dedicated to information, communication, media and knowledge industries, TECOM is a vibrant district offering residential and fully equipped commercial office space in Dubai. Fitted to the highest standard, popular towers in TECOM include Grosvenor Business Tower and Executive Heights. Proximity to the metro and Sheikh Zayed Road add to the value of commercial real estate in TECOM. Dubai Marina is also a great location, given the competitive lease packages on Dubai commercial property on offer. Marina Plaza is a go-to address for Dubai commercial property in the Marina. One of the few commercial real estate buildings in the Marina, the tower offers fantastic views of the Marina and is located next to Marina Mall, just off Sheikh Zayed Road. Jebel Ali is another thriving commercial real estate community in Dubai. A port town known for its industries, Jebel Ali today is a much-sought after residential and commercial district. Home to 1000s of small, medium and big-level companies, Jebel Ali features magnificent high-rise residential apartments, luxury villas and penthouses alongside commercial properties in Dubai such as retail complexes, shopping malls and entertainment options. The Ibn Battuta Mall and the Emirates Golf Club are very close. The metro station is an added advantage, providing easy transportation services for residents and employees to various areas of Dubai. Buying or renting a space for your business is a huge decision, so consider the above before you zone in on a suitable Dubai commercial property.

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