Buying a Property in Dubai

The concept of Freehold property in the United Arab Emirates was introduced in 2002 with Dubai leading the way. Due to the fact that the property market is still in its early stages, the way it operates is somewhat different to the more established conventional markets and it is important to understand this in order to make educated investment decisions.

Whilst most projects available on the market are offering residential accommodation there are an increasing number of commercial projects and mixed use buildings coming to the market. For those looking to purchase a property in Dubai, professional advice is a must when starting your search. Our professional staff have access to a large number of properties available direct from developers and the secondary market. They will take time to fully understand your needs, advise you and guide you through the whole buying process.

The 3 main developers in Dubai are Nakheel, Emaar and Dubai Properties who are all Government backed organisations. The land granted to them by the Government is either developed by them or sold off in plots to smaller private developers who will then build and sell the units.

Off-Plan properties

Developers have recognized the demand for commercial property and we have seen a number of new off-plan projects being released on to the market. Many businesses are looking at this as a suitable alternative to paying the high rents that are being commanded in some areas of Dubai. As the city continues to expand and spread across the sands, businesses are also now needing to look at their location.

Whether you are looking at office or retail space there is often now a suitable option to purchase rather than rent. Delivery dates of completed projects vary and this can suit many businesses as they are typically tied into longer tenancy contracts than you would find with a residential lease.

The figures don't always speak for themselves but with such overwhelming growth and continued vision to expand the borders of Dubai, attracting more foreign businesses and with it huge increases in population there is no doubt a need for quality commercial space. Current reports and our own experiences suggest that there is a drastic undersupply of office space for businesses currently operating in Dubai and this is unlikely to change for some time. So it is inevitable that investors will be attracted to the potential.

Rental yields are being quoted in the region of 18%, which is in itself attractive to investors when residential property is giving around 8% and bank interest rates remaining much lower. The market also presents good growth potential, as a simple look at supply and demand would tell you.

Buying commercial property as an investment is however an altogether different scenario to investing in residential property. Ask any property fund manager and they will tell you that commercial property is typically a much less volatile investment. Tenants tend to stay in the premises for a number of years signing lease agreements up to 5 years. Dependent on the lease agreement put in place you may then be forced to hold on to your investment with tenant in situ, unless you are able to sell the property as a going concern.

Ready Occupancy

There are currently very few completed commercial developments completed in Dubai making the ability to purchase a property and move straight a difficult task. Some investors like to see instant returns on their investment. Due to the shortage of completed property in Dubai at the moment and the massive number of new businesses, demand way outstrips supply so rental yields are high and will remain as such for the foreseeable future, when more property comes on stream.

Due to the fact that the property market is still in its early stages, the way it operates is somewhat different to the more established conventional markets and it is important to understand this in order to make educated investment decisions.

It is quite possible to arrange finance for many of the properties for sale in Dubai. Unlike many more developed markets it is not usual practice to seek the assistance of a lawyer when purchasing a property in Dubai. We recommend that you take time to read through our simple guidelines.