We get where you’re coming from.
Steady ground helps businesses grow, and owning your office can do that. Picking in Dubai is tough, though. There are many options and regulations. And is it wise to buy space in a city like Dubai, where the business sector moves at breakneck speed?
In this post, we’ll explore the process and considerations around buying office space in Dubai. We’ll also share some tips and recommendations for alternatives.
Let’s get started.
Can I Buy An Office In Dubai?
Yes, you can buy an office in Dubai, but it’s generally expensive. Here’s why.
Cost Breakdown For High End Offices
- Prime Location: Dubai attracts companies from around the world. Prime areas like Downtown Dubai and Business Bay are highly desirable, driving up property prices.
- High Demand: Many businesses want to set up in the Middle East, so there’s a constant high demand for office spaces. This demand, combined with limited supply, pushes prices up.
- Quality and Amenities: Office buildings in Dubai often have top-notch facilities and amenities like advanced security systems, ample parking, and modern infrastructure, which all add to the cost.
Of course, not all offices are expensive. You can find different offices to buy with different price ranges. Here is a list of classifications that can help you identify the right kind of office.
Classifications And Average Prices
- Grade A Offices: In prime areas, prices range from AED 1,500 to AED 2,500 per square foot.
- Grade B Offices: In secondary locations, prices range from AED 1,000 to AED 1,500 per square foot.
- Grade C Offices: These are more budget-friendly, often in less central areas, with prices typically ranging from AED 700 to AED 1,000 per square foot.
Pricing Examples
A 1,000 square foot Grade A office in Downtown Dubai could cost between AED 1.5 million and AED 2.5 million. A Grade B office of the same size in a less central area might cost between AED 1 million and AED 1.5 million. A Grade C office could be even more affordable, costing between AED 700,000 and AED 1 million for the same size.
Legal Requirements For Buying Office Space
Buying offices includes a lot of paperwork. We’ll break that down quickly in this section.
That way, you’ll be able to pick better.
- Ownership Restrictions: If you’re a foreign national, you can only purchase property in designated freehold areas like Downtown Dubai, Business Bay, and Jumeirah Lake Towers (JLT).
- Property Registration: You must register the property with the Dubai Land Department (DLD), which involves paying a registration fee (usually 4% of the property value). This registration confirms your legal ownership.
- Paperwork Verification: You’ll have to verify the title deed, check for any debts or liens, and ensure compliance with zoning rules. It’s recommended to hire a legal advisor for this process.
- Financial Requirements: You’ll need to show proof of funds or get financing. Mortgages are available but usually require a large down payment (around 25-35% for non-residents). You should also be ready for ongoing costs like maintenance fees and property taxes.
How To Buy Office Space in Dubai: The Process
The process is more or less the same as in the rest of the UAE. You might need to change things up based on if you had a Mainland Company Formation or a Free Zone one, though. Both of these can affect your options with price and availability.
Here’s an overview of what this process includes:
- Setting your budget and selecting the right office size, location, and type for future growth.
- Working with a knowledgeable real estate agent to locate suitable properties and manage negotiations and legalities.
- Signing a Memorandum of Understanding (MOU) to agree on price, payment schedule, and completion deadlines.
- Depositing around 10% of the price into a secure account upon signing the MOU.
- Inspecting the property to ensure clear title and no legal issues, possibly with legal guidance.
- Completing all required approvals.
- Finalizing the Sale and Purchase Agreement (SPA) by detailing the sale process and obtaining signatures from both parties.
- Having ownership transferred by registering the property, paying fees, and completing the final payment.
- Receiving the title deed post-registration as proof of office space ownership for future transactions.
Pros And Cons Of Buying Offices In Dubai
Purchasing office space in the UAE is a huge step, regardless of city, all prices are fairly high. So before you go further, take a step back and think about it, along with all the other options.
Pros of Buying Office Space in Dubai:
- You could see the value of your office space increase over time.
- You’ll have predictable costs and a secure location.
- You can tailor the space to fit your business needs.
- You’ll build equity and grow your asset portfolio.
- You may benefit from tax deductions, like for mortgage interest.
Cons of Buying Office Space in Dubai:
- You’ll need a significant amount of money upfront for down payments and fees.
- Selling the property might take time if you need cash quickly.
- You’ll be responsible for repairs and upkeep.
- The value of your property could decrease if the economy changes.
- It could be harder to move or adjust your space if your business needs change.
Recommendation: Renting Office
Looking for offices for rent in Dubai might be smarter than buying. It’s cheaper upfront and more flexible.
You won’t have to deal with maintenance or long-term commitments. This frees up money for your business and helps you adapt to market changes.
Your business can grow more smoothly when you’re not tied to a specific space. A permanent office isn’t the best bet when you’re just settling in.
It makes more sense to buy later, when your business is stable.
You’ll have steady income then, so unexpected costs won’t hurt as much. For now, focus on making your business scalable. This approach lets you stay agile, which is very important with how fast Dubai’s business space is developing.
How Much To Furnish Office Space In Dubai After Purchase?
Setting up an office in Dubai costs a lot more than renting ready-to-use spaces.
Purchasing office space in top areas already costs a lot. Furnishing adds another AED 500 to AED 1,500 per square foot. So, for a 1,000 square foot office, you could spend between AED 2.5 million and AED 5.5 million.
Renting options like serviced offices, private offices, executive offices, shared/coworking spaces, and virtual offices are cheaper and offer more flexibility, with lower initial costs compared to buying and setting up your own office.
Best Areas For Buying Offices In Dubai
If you’re still interested in buying an office, here are a couple of options you can look into for purchase.
- Downtown Dubai: Prime spot with famous towers like Burj Khalifa. Great for businesses wanting to stand out near luxury spots.
- Dubai International Financial Centre (DIFC): Key money hub with many global firms. Business-friendly rules and nice offices in a good area.
- Jumeirah Lake Towers (JLT): Mix of homes and offices at fair prices. Popular with small firms and startups. Easy to reach by public transport.
- Dubai Silicon Oasis: Tech park for living and working. Has modern setup, flexible offices, and help for businesses.
- Sheikh Zayed Road: Main road through Dubai with top office buildings. Central spot with good transport links.
If you want affordable options, the JLT and SZR are the best options.
How To Buy A Good Office: Essential Tips
You don’t want to end up with the wrong office when you’re committing to a space. That mistake is going to cost a huge chunk of your finances. Doing the following should help.
- Location Matters: Pick a spot that suits your business and is handy for clients, staff, and partners. Think about access, traffic, and nearby amenities, like restaurants.
- Size and Layout: Plan for space now and later. Think of the staff count, room to grow, and office setup (open or divided).
- Budget Planning: Be realistic about costs. Include buying price, fixes, upkeep, taxes, bills, and insurance.
- Full Inspection: Look closely at the property for any structural issues, maintenance needs, or safety concerns.Future Proofing: Think ahead about growth. Choose a space that can change without big costs.
- Financial Prep: Sort out finances early. If you need a loan, understand the terms and conditions. It might help to talk to a financial advisor.
- Get Expert Advice: Work with a business property agent. They know market trends, values, and how to haggle.
- Neighborhood Check: Look into the area. Check safety, nearby shops, and future building plans.
- Negotiate Fully: Don’t be shy to bargain. Add conditions like repairs or changes, to make sure the office meets your needs before you seal the deal.
What Can SpiderBC Do For You?
Your office says a lot about your business—and it impacts your operations, too.
At SpiderBC, we get that finding the right fit matters, whether you buy or rent. We’ll make sure your office matches your brand and works well for you.
Ready to make your mark in Dubai? For office setup questions, call +971 43827700, WhatsApp +971 557012754, or email info@spiderbc.com.