Dubai Commercial Property Classification For Foreign Investors

Dubai is the major preferred city in the world for its best infrastructure, living standard, huge market, etc. It is becoming so appealing for investors and business owners to purchase the property in the trading hub. The city is dedicated to providing all possible relaxation in the laws and promoting ease of doing business.

You will find a favorable climate to set up a business and run operations smoothly.
 

There are certain suitable areas to find the best commercial places like DIFC, Business Bay, Dubai South, Dubai Media City, Downtown Dubai, and Dubai Internet City.

 
Free zones of Dubai cater to the need for commercial properties in the city. As per UAE government laws, free zones are classified in below major categories: 

1. Dubai Creative Clusters Authority (DCCA)

2. Dubai Merchandise Trade Center (DMCC) 

3. Dubai Free Trade Zones

No matter what the business niche, you can easily find the perfect commercial unit in free zones. They come up with multiple sectors like healthcare, medicine, education, finance, logistics, design, and many others. In these zones, the businesses get 100% ownership of the company without the need for a local partner. The major goal of these free zones is to grow foreign investments and stimulate economic activity in the emirate. 
 

In this guide of commercial real estate Dubai, we will review some of the top-notch areas of Dubai best for investment point-of-view. 

 It is important to know that even if the commercial spaces are increasing in the city, Dubai is still not able to completely meet the expectations. Although the government is taking various initiatives to ease concerned laws and regulations and attract multiple business owners from every corner of the world. Every foreign company needs the office, warehouse, sorting spaces, etc., and hence checking availability is a must. 

ROI (Return Of Investment) is one other big factor with the commercial market of Dubai. The growing demand but less supply is causing the surge in prices. However the same was decreased during the pandemic and moved towards normalization with the passing time. This opens the doors of huge opportunity for the investors as they can dream of higher ROI in commercial properties. The ROI for commercial properties in Dubai ranges from 4% to 8% every year. The need for warehouses and labor camps witnessed a huge surge in the COVID period, especially with eCommerce companies. Currently, the real estate market is set to provide a yield of 9% to 13% ROI every year. 


Types of Commercial Real Estate in Dubai
 

The commercial real estate sector is ever-growing for a long time and EXPO 2020 has only added feathers in the same. They open multiple channels of opportunities and investments and lure investors to start doing business. However, the cost of the properties is quite variable and hence it becomes quite important to choose the right space at the best prices. Let’s explore all major categories of commercial real estate Dubai properties. 

1. Offices

Dubai has a diverse range of offices to choose from for the businesses. The investors can go for both purchases and renting the facility. The price of an office commercial unit depends on the location, finishes, size, and furnishing level. Business Bay, JLT, the Sheik Zayed Road, Bur Dubai, and Deira are some popular locations offering the best office spaces. In case you want to go with the rental properties, DIFC and Dubai South can be the perfect alternative for office spaces. 


2. Coworking Spaces

Since Dubai is becoming home to countless new business owners or small entrepreneurs, the need for co-working space is on the rise. These commercial spaces are getting huge popularity among start-up businesses, freelancers, and entrepreneurs. Simply put, these can be understood as a collective office offering a more productive and positive workspace. The lowest rent prices are one of the major advantages of renting commercial spaces. 

 
3. Retail Space
 
It is one of the profit-booster investment areas in Dubai’s economy. Purchase of retail shop units and spaces is seeing a huge demand in various parts of the emirate. The secondary real estate market is the best place to find such fruitful deals on retail spaces. The off-plan commercial retail market is one other provider of low-budget profitable property deals. 

The investors are allowed to buy retail spaces in numerous Dubai areas like Business Bay, Jumeirah Lake Towers, Meydan, Downtown Dubai, Dubai Marina, International City, and Dubai Silicon Oasis. For rental properties, areas like Jumeirah, Deira, Al Barsha, Bur Dubai can be ideal choices. For commercial properties, the area can range from 344 to 9,945 sq. ft with a basic unit price range starting from 150000 AED. On the other hand, the rental areas range from 99 to 37,996 sq. ft with a basic unit starting price of 15000 AED per annum. 

However, the above-mentioned price figures do not fit the luxury shopping mall stores. Simply put, if you’re purchasing or renting retail space in Dubai Mall, Mall of Emirates, or another famous shopping center, the investment is going to rise to a huge extent. Further, it is also quite complicated to find & rent retail space in shopping malls as they remain in higher demand and are hardly open to booking. 

The more retail space investment cost is a clear signal about the importance & demand of the property. Both big and small scale shopping malls are considered to be popular and prestigious. Hence, the retail space cost is quite variable and needs to be researched well before finalizing the investment deal. 

 
4. Warehouses

Investing in the warehouse property can be a fruitful choice in Dubai. The increased popularity of these units can help in generating huge annual revenue. During the hit of the COVID-19 pandemic, the demand for warehouses increased to a new high in Dubai. Ecommerce and all other companies dealing with supply & logistics witnessed huge growth in the pandemic period & which brought the need for more storage spaces. Both purchase and renting of commercial warehouse spaces grabbed business owners’ attention. 

While investing in warehouse storage spaces, one should look forward to its distance from central highways, ports, and airports. It will ease the mobility and transportation processes. Jebel Ali, Al Quoz, Dubai Industrial Park, Dubai Investment Park, Technology Park, Al Qusais, and Al Warsan are some of the popular areas having plenty of warehouses. You can purchase an area of 1,270 to 395,443 sq. ft under the price of AED 1,400,000. For renting opportunities, the cost begins from AED 22,800. 


5. Showrooms

Showrooms are a suitable option for any sort of product presentation. Be it for modern electronic devices, huge-sized equipment, construction materials, etc. a showroom can be the best place to bring your products in direct customer accessibility range. In general, these spaces offer a suitable area between 3,659 to 49,438 sq. ft to organize your products or services. 

Some showrooms have their targeted audience as corporate clients, while others put effort into customer interactions. You can find the best showroom space in areas like Al Khor, Business Bay, Al Quoz, and Al Barsha. Their selling price begins from 9000000 AED & rental from 99000 AED. 

6. Commercial Space Units

A lot of independent investors are visiting Dubai to set up their businesses. Commercial units are good & mandatory for all small-scale ventures like gyms, cafes, spas, etc. These units are available in residential communities with segmented portions or full floors. They are even available in the residential areas from the purchase cost of AED 3,200,000 cost & rental cost of AED 242,000. 

With the growing real estate agency in Dubai and economy, there is no shortage of commercial units in the city. You should be looking in the areas like Business Bay, Downtown Dubai, Jumeirah Lake Towers, Dubai Sports City, Dubai Marina, DIFC, or Jumeirah Village Circle to bag the best deal in full-floor units. 

7. Commercial Villas

Commercial Villas are suitable for both offices or shops & come up with multiple configurations. They can be converted into a clinic, studio, restaurant, kindergarten, or anything else. These are the all-around solutions to a space needs with multiple amenities. You can find kitchen areas, parking spaces, swimming pools, lounges, and many others. The buying price for these villas starts from AED 2,100,000 while the rented price starts from AED 200,000. If you’re keen to purchase or rent commercial villas in Dubai, look over in areas like Umm Suqeim, Deira, Al Wasl, and Al Safa. 

8. Commercial Buildings

Commercial buildings are also a great investment opportunity in Dubai. The buildings are handy to assist the clubs, businesses, shopping centers, hotels, and other establishments. You can search for these units in various locations like Dubai Hills Estate, Al Barsha, Dubai Production City, Barsha Heights, Jebel Ali, and Sheik Zayed Road. Purchase price begins from AED 3,000,000 & rental cost from AED 220,000. 

9. Commercial Land

Commercial land comes up with multiple personal and investment benefits. Dubai can offer major mixed-use & industrial-use commercial plots. The industrial plots are significant for factories, camps, and warehouses while mixed-use can be for both commercial and residential property. Find mixed-use in various areas like Jumeirah Village Circle, Al Jadaf, and Business Bay while Al Quoz, Al Warsan, and Jebel Ali Freezone account for industrial commercial units. The buying price starts from AED 1,000,000 while the rental price is said to be a minimum of AED 60,000. 

10. Factories

Being one of the leading construction cities across the globe, Dubai has all sorts of industries from mechanical engineering, paper, metallurgy, perfumery, cosmetic products, and many more. A well-flourished network leads to the need for more factories and that brings the opportunity for real estate investment in Dubai. The government is also focused to lure more businesses into setting up their factories or plants. The customs and tax charges are also quite low as compared to the other cities. The majority of factories and industries are located in Dubai Industrial Park, Al Qusais, and Dubai Investment Park. The starting purchase price begins from AED 800,000 while the rented properties will be available from AED 1,250,000. 

11. Labor Camp

These camp units fall under the commercial properties categories and are in huge demand in Dubai. When it comes to finding budget-friendly storage spaces with well-housing infrastructure, the labor camps are the ideal choice. You should look into the areas like Al Quoz, Muhaisnah, Jebel Ali, Dubai Investment Park, etc. The starting price for full-fledged camps starts from AED 4,500,000 & rented ones from AED 5,500. 

Final Word 

Hence, the above in-depth information leads us to one conclusion - Dubai’s commercial real estate market is on the boom. There is no shortage of business or investment opportunities & the exposure is much more than ever before. You can choose from the offices, industrial buildings, warehouses, factories, camps, etc. for both commercial & residential preferences. 

However, the location of the properties may vary in multiple locations of the city. For instance, commercial properties like industrial spaces, warehouses are located in districts while offices & retail properties can be found in all parts of Dubai. Hence, research around the factors like supply-chain demand, higher ROI, liquidity, rental source, etc., and invest in commercial real estate for enhanced benefits.