Commercial Buyer's Checklist – General Guide for Buying a Commercial Property in Dubai, UAE

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The Commercial Buyer's Checklist

What do you need to remember before buying commercial property? Here are a few pointers to help you along the way.

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Step 1: Know why you want to buy

If your strategy is geared towards selling your business, then it makes sense to effectively ‘pay yourself rent’ rather than an absentee landlord. As soon you have the capital for the down payment, you should consider turning that rental payment into a mortgage payment that will give you a return – just like buying a home instead of renting an apartment.

Step 2: Learn about the market you’ll be buying in

Use a knowledgeable commercial realtor to find your new property. If you’re like most business owners, you don’t have time to attend endless viewings. A competent realtor can save you time plus provide you with comparable demographics, plans for growth and new developments in the area.

Step 3: Define the type of commercial property you are seeking

There is a big difference between buying a restaurant building and a corporate office space. You may be purchasing a commercial building as a location for your business or as an investment. If you are purchasing for investment, consult with a real estate professional to find out which types of buildings are in demand. If you plan to buy an office in an area where there is a high vacancy rate for similar properties, then you may be making a poor investment, depending on your long-term goals.

Step 4: Consider buying/building more square footage than you need right now

You can always grow into it, but this will also allow you to achieve some rental income until that time.

Step 5: Research

Check the zoning and land use restrictions for the property in question. There can be restrictions on certain types of businesses, which is where land use laws become a deciding factor on your area of choice.

Step 6: Ask about the parking situation

Some commercial buildings offer parking and others share common parking with other businesses. Inadequate parking can limit your potential goals.

Step 7: Get organised

Sort out all required documentation that includes:

For an individual buyer:

1. Passport

For a company:

1. Certificate of Incorporation
2. Memorandum and Articles of Association
3. Board Resolution
4. Signing Authority letter
5. Passport copy of signatory

For an overseas company:

1. All of the above documents attested by the UAE Embassy

Step 8: Get pre-approval

Know what you can afford to shop for. Don’t waste time looking for office space outside your budget.

Step 9: Consider low down payment and longer-term loans

This preserves your capital for better utilisation, keeps your cash flow high and allows you to redeploy ‘capital savings’ into other profit-generating business areas. Be sure you understand all of the economics.

Step 10: Account for maintenance costs

Refurbishing a commercial building can be an expensive exercise. Include costs of air conditioning and other refits into your budget.

Step 11: Consider buying tenanted property

Cut down on the risk of void periods by buying a property with the tenant already secured. Email customercare@bhomes.com to enquire about tenanted property.

Step 12: Maximise viewing opportunities

Contact your designated consultant to arrange as many viewings as possible with the owners of the properties you are interested in.

Step 13: Agreeing to buy

Once you have decided on your property of choice, a sale and purchase agreement will be drawn up confirming the agreed price and your solicitor's details. Once the agreement is finalised your deposit shall be passed onto the owner or landlord to secure the property.

Step 14: Transfer of ownership title

The final stage of the commercial buying process is the transfer of ownership and title from the seller to the buyer. There is usually a transfer fee involved and this can vary from developer to developer.

Step 15: Get a quality tenant

Work with a reputed leasing agency to find a quality tenant. A large corporate tenant is likely to rent your property for a long period of time and unlikely to default on the rent.

Looking for more resources? View our other checklists here.