Setting up a new business is not a piece of cake for everyone. The burden & requirements of the entrepreneurship journey can keep you on your toes. Consistent hard work and taking upright decisions are two of the necessary factors to plan a thriving business. Speaking of the latter one, choosing the right premise for the company plays a vital role in the overall growth. It makes the business operations quite seamless & even offers security standards. EXPO 2020 has already revolutionized Dubai’s trading hub & economy & a lot of new ventures are coming into existence. 

The growth in the Dubai entrepreneurship market has increased the demand for commercial properties. Although the city has a plethora of commercial properties on sale, new startups are still struggling with the huge capital investment. Renting commercial property is one ideal choice to get a suitable property with minimal investment. Setting up your business and growing in the huge competition will have its own set of challenges.

Finding the perfect rental commercial property can also be a troublesome task if you are not aware of the necessary factors. So, to make it easier, here are some of the key factors & aspects related to renting commercial devices. 

Prerequisite For Renting Commercial Property In Dubai

 

Let’s understand the details of commercial property renting in Dubai in three segments - before leasing, after leasing, and rental agreement. 

 

The first and foremost thing is to find out if you’re eligible for acquiring a rented property in Dubai. The process will need a valid trade license to start applying for the rented properties. Dubai Economic Department (DED) is responsible for setting up business in an onshore location. Further, you need to find the local concerned authority in the area itself. Dubai Silicon Oasis (DSO), Dubai Multi Commodities Center (DMCC), and several other respective free departments handle the legal matters to set up business in a free zone. The trade license also assists in finding the perfect commercial unit types in the right location. 

 

Renting offices in Dubai involves certain things like a commercial license. There are different types of commercial licenses for already running companies in the city. The location is dependent on the license and hence must be decided only after the license is approved. The business location should be the same as per the commercial unit license area. 

 

The area should be accessible to the targeted audience especially if you are running a shop/showroom for walk-in customers. A suitable parking space is also a must to suit the number of employee vehicles. Thus, renting a place requires research based on the trade license and finding whatever works best for your business. 

 

Businesses in Dubai offer employee visas to foreign workers as per their expertise. However, there are certain restrictions in the process like: 

 The shared office can provide up to three visas. 

A company with a shared office can provide up to five visas. 

Offices having their own physical space can provide visas as per the area. One visa is allowed for every eight square meters. 

 

Ensure That Documents Are Complete

 

Dubai’s policies are quite strict regarding commercial business. It is essential to have all sorts of necessary documentation in place before starting your business. Following are some of the must-have documents for your business: 

 

1. Proof of owning a business

2. Status of the building/premises

3. Compliance with previous plans

4. Essential permits to run business in that place

 

In case your commercial property in Dubai needs any update or change in recent times, it is mandatory to mention the same in the contract. Other business-related information should be updated and would have no sort of discrepancies. Every real estate transaction in Dubai is taken care of by Ejari. It is a commercial rented policy by the Dubai government to handle the contractual terms and conditions & avoid any disputes. 

 

Budget Pricing Factors

Budget is one of the essential factors while renting a property in Dubai. There would be a certain security deposit amount besides the annual rent. Consider having a certain hidden charge before making a final decision. RERA (Rent Increase Calculator) can be a suitable option to research for the rent increase and remain aware of the raise in tenancy amount while renewing the agreement. 

 

Having a professional real estate advisor by your side has its perks. Consult a real estate agent in Dubai to keep all criteria(s) in check to buy commercial properties in Dubai. There are certain advantages of professional real estate consultation in Dubai like: 

 

1. Get the right advice regarding commercial property purchases. 

2. They come with deep knowledge of market price, average value, and certain other valuable information. 

3. They can put you in the right spot to do the negotiation and help you crack the best deal. 

 

But, as mentioned earlier, only a professional real estate expert can provide valuable suggestions. Thus, make sure to do your bit of research and have the potential questions about the commercial property ready:

 

1. How many cheques are required for rental commercial property?

2. What about the accessibility to public transportation?

3. Required permissions to conduct business operations. 

4. Experience of the real estate company.

5. What are their servicing areas? 

 

Make sure to choose the real estate agent in the same area where you are planning to purchase the commercial properties. 

 

Multiple Types Of Lease Agreements

It is essential to understand what all sorts of lease agreements Dubai has to offer. Explore the details below to make your choice accordingly. 

 

1. Gross Lease

The companies can take the commercial property on rent with an agreement of monthly rent. All additional expenses like taxes, insurance, and maintenance will be handled by the landlord. 

 

2. Land Lease

The tenant company has to pay for the land to acquire it on the lease. In this agreement, you can construct the building to run the business operations. Once the lease duration is over, the landlord gets back the possession of both land & building. 

 

3. Triple Net Lease

The triple net lease offers the maximum benefits to the landlords. The commercial tenant has to bear the loan amount and also pay for the insurance, taxes, and maintenance. 

 

4. Modified Net Lease

The modified net lease brings common benefits to both commercial investors and property owners. The entire expenses are equally shared & hence becomes a preferred choice. 

 

What should you do after renting commercial real estate?

 

Since you’ve found the ideal commercial property to invest in, here are some crucial factors to look into. 

 

1. Opt for the water and electricity connection from DEWA. 

2. Choose an insurance company to cover the damage related to the business. 

3. Hire an interior decorator to make arrangements. 

 

You can find numerous interior designer companies or individual firms in Dubai. Irrespective of the commercial property choice, interior designing and maintenance are recommended for both rented and purchased commercial spaces. Keeping the look and feel of the business place appealing is a great move. While investing in any renovation or interior designing, you must be sure about taking all these factors into budget account for commercial leasing. 

 

Take the assistance of the interior designing expert to set up your rented office or shell core. There is no such necessity to revamp the interiors unless you feel the need to do so. If you’re choosing to hire interior designers, make sure to do it with proper care. The clause related to changing the look and feel of the home should be properly mentioned in the contract agreement. You will even need the NOC (Non-Objection Certificate) form for the landlord, builder, municipality, or free zone department. Keep in mind that the changes are only possible in the rented property only after the NOC document is ready. 

 

Sub-let the commercial property in Dubai

 

Yes, the sub-letting of the real estate areas in Dubai is allowed with a landlord’s written approval. It is highly recommended to include the sublet clause in the contract and go ahead with the finalized lease without any future confusion.

 

Now, let’s explore the termination clause for commercial real estate properties. In general, the standard termination duration of the lease is one year. Both tenant and landlord come to a mutual agreement to have the property lease for a year. In case they both don’t decide to end the term, the agreement is set to be renewed every year. 

 

Ending your contract before the agreed date can lead to certain penalties as well. The landlord can claim for the two months' compensation against the lease agreement on the commercial property. It is to cope with the losses that he is facing for the early contract termination. Dubai’s Rent Dispute Settlement Centre is going to handle if there is any other big dispute. 

 

Rental Payments for Commercial Properties In Dubai

 

The payments for rent against the commercial properties in Dubai are mainly through cheques. Irrespective of the property type, no investor is going to choose any other payment mode rather than a cheque. These can be issued from the company’s account or the investor’s account. 

 

The long-term budget can be an effective way to rent commercial properties in Dubai. Since the payment for the rent can be done through multiple iterations, the commercial tenant isn’t going to face any sudden burden. As per the agreed rent amount in the contract, 5% of the total amount is to be paid as a security deposit. 

Final Word

Hence, for new entrepreneurs, Dubai is offering ease of starting and doing business. Find the perfect space for your office, warehouse, shop, and run your business with zero hassles. Some of the best areas in Dubai are Business Bay, Deira, Jumeirah Lake, etc. to find your suitable commercial space. 

 

To get more information on Dubai’s real estate market, always seek out the new announcements or be in touch with the agents. It will also help acquaint you with commercial space law amendments.