Commercial Property in Dubai and Abu Dhabi: The Complete Guide

Where foreign ownership applies

Freehold ownership of commercial property for foreign investors is available in designated zones in both emirates, the same freehold map residential buyers use, plus the UAE’s free zones, where 100% foreign ownership of the business and, in most cases, the unit itself is standard. Outside those zones, commercial space is typically leased on a long-term basis rather than owned outright.

Run your own numbersRental yield calculatorGross and net yield with the costs portals leave out: service charges, management, voids.

What actually decides the yield

Commercial yields typically run 1 to 3 points above residential, which reads as an easy uplift until the costs that come with it are counted. Fit-out is paid by whoever needs the space configured, usually the tenant on a shell-and-core unit but sometimes negotiated into the deal, and it can run to a full year’s rent on a bare office floor. Void periods between commercial tenants run longer than residential, often several months rather than several weeks, because a business relocating has more to plan around than a household does.

The number that actually prices a commercial asset is the tenant’s covenant strength, the certainty they will keep paying rather than the headline rent they are paying now. A grade-A office let to a multinational on a long lease is priced very differently from an identical floor let to a startup on a short one, even at the same rent per square foot.

Offices, retail, warehouses and land

Strata-title offices are bought and sold much like residential apartments, unit by unit, with service charges and an owners’ association. Retail units trade on footfall and the anchor tenants around them as much as on size. Warehouses and industrial space price on ceiling height, loading access and proximity to the ports and Al Maktoum International, which matters more to a logistics tenant than the address on the brochure. Development land is the most illiquid of the four and the most exposed to zoning and infrastructure timing.

The costs on top of the price

Commercial property carries a cost residential buyers never see: VAT on the price. A home’s first sale is zero-rated and a resale is exempt, but a sale of commercial property is standard-rated at 5% under the UAE VAT law, Federal Decree-Law No. 8 of 2017. A buyer who is registered for VAT and lets the unit commercially can normally recover it; one who is not carries it as a cost. The registry fees work as they do on a home. In Dubai the DLD fee is 4% of the price, paid by the buyer by custom, plus a trustee office fee of AED 4,000 plus VAT on a deal of AED 500,000 or more. In Abu Dhabi the ADREC fee is 2% of the higher of the price and the ADREC valuation, shared equally between buyer and seller unless the contract says otherwise. On an illustrative Dubai office at AED 3 million, that is AED 150,000 of VAT, AED 120,000 to DLD and AED 4,200 to the trustee office before the agent is paid and before a dirham of fit-out.

VAT and tax on the rent

Commercial rent is standard-rated for VAT at 5%, where a residential lease is exempt. Once your taxable supplies, which here means the commercial rent, pass AED 375,000 in 12 months, or are expected to within the next 30 days, you must register with the Federal Tax Authority and charge VAT on the rent. Registration is voluntary from AED 187,500, and registering is how an investor recovers the VAT paid on the purchase. A large tenant will expect a tax invoice and reclaim the VAT; a small tenant that is not registered feels the 5% as cost, which is worth knowing when you set the rent. On income, Cabinet Decision No. 49 of 2023 keeps an individual’s real estate investment income outside Corporate Tax as long as the activity is not conducted, and does not need to be conducted, under a licence. Buy through a company and the Corporate Tax rules apply instead, as our tax guide sets out, so settle the structure before transfer.

Dubai’s office market in 2026

Office rents rose for most of the past five years and are now levelling off. Savills had average Dubai office rents flat at AED 238 per sq ft in the second quarter of 2026, the first quarter without growth since the first half of 2021, and Cushman & Wakefield recorded a small quarterly dip in new-lease rents, concentrated in older Grade B stock. Grade A space is still scarce: Savills describes low vacancy across the prime locations and expects about 1.9 million sq ft of new office space in 2026, with the pipeline rising to more than 4.2 million sq ft by 2030, and Cushman & Wakefield notes that much of this year’s delivery is already pre-let. Demand underneath keeps growing, with 71,830 new companies joining the Dubai Chamber of Commerce in 2025. For a buyer, the read is a split market. A Grade A floor let to a strong covenant is priced on scarcity; an older Grade B unit now competes for tenants on rent, which is exactly where the void and fit-out assumptions above decide the return.

Underwriting a commercial purchase

Every recommendation is underwritten against registered transaction data, what comparable units actually sold or leased for, not asking prices, the same data-first standard used on the residential side. A commercial purchase is a numbers decision more than a lifestyle one: run the registered comparables, the realistic fit-out cost and a conservative void assumption before an asking yield is taken at face value.