Letting your commercial property

Price it, and state the basis

Because there is no single area-measurement standard in Dubai, as CBRE notes, the basis you quote on is part of your price. Newer buildings increasingly quote on net leasable, that is useable, area. Quote on a different basis from the building next door and your rate will look wrong even when your rent is right, so state the basis in the particulars.

Set the quoting rate against genuine evidence for comparable buildings, in the same grade and the same submarket, and be clear whether the comparable was shell and core or fitted. The current backdrop is firm: CBRE reported Dubai average office rents up 14 per cent year on year in the first quarter of 2026, prime up 16 per cent, flat quarter on quarter, with occupancy steady at 95 per cent.

Underwrite the tenant, not the rent

On a five-year commercial lease, the covenant is the asset. A slightly lower rent from a business that can perform for the full term beats a headline rent from one that cannot.

• Check the trade licence is current and that the licensed activity matches the use you are letting for.
• Ask for audited accounts or bank statements, and for a young company, a parent company guarantee.
• Understand the business model and whether the rent is serviceable from it.
• Take post-dated cheques for the full term at signing, which is the Dubai norm, or advance wire transfer against a bank or parent guarantee.
• Size the security deposit to the fit-out risk, not to a percentage convention.

On cheques, the enforcement position changed and it is worth understanding properly. Federal Decree-Law No. 14 of 2020, in force since 2 January 2022, removed automatic criminal liability for a cheque dishonoured purely for insufficient funds. In its place, the dishonoured cheque is an executory instrument you enforce directly through the execution court, without first having to win a substantive civil judgment, and banks are obliged to accept partial payment against available funds. Criminal liability still applies to fraud, to instructing a bank to stop payment without legitimate cause, and to withdrawing funds so the cheque cannot be met.

In practice that means a cheque is still a strong instrument, but it is now a faster civil remedy rather than a criminal threat. Underwrite the tenant accordingly.

Structure the lease deliberately

Three to five year terms are now common in Dubai where leases were once annual, and up to ten occurs, usually with tenant break options. A longer term is worth more to you than a marginally higher rent, provided the covenant supports it and the review mechanism is sound.

• Permitted use, drawn tightly enough to protect the building and widely enough that the tenant can trade.
• Rent review for the later years, with a stated mechanism rather than an agreement to agree.
• Break options, if any, with a clear notice requirement and a defined penalty.
• Reinstatement, so you decide at expiry whether to take the fit-out or require the space returned to shell.
• Assignment and subletting, with your consent required and a stated basis for withholding it.
• Service charge recovery, matched to what the building actually charges you.
• Chiller account, naming who contracts with the cooling provider.

Get the heads of terms right and the lease follows. Most disputes we see trace back to a point that was left vague at the heads of terms stage because both sides wanted to get on with it.

Controlling the fit-out

Most office space hands over shell and core, so your incoming tenant will be running a construction project inside your asset. Control it with the lease and with a licence to alter, not with goodwill.

1. Require your approval of the drawings before any work starts.
2. Require the tenant to obtain all authority approvals, from Dubai Municipality or the relevant free zone or development authority, and Dubai Civil Defence for fire and life safety.
3. Require a registered contractor, from the approved list where the building or master community maintains one.
4. Hold a fit-out deposit against damage to the base build and the common areas.
5. Require as-built drawings and sign-off on completion, and keep them on file.

Where you grant a rent-free fit-out period, define it in months with an explicit start trigger and tie it to the lease commencing. An open-ended fit-out period is an open-ended void.

Your service charge obligations

If your property sits in a jointly owned building, the service charge regime is regulated and it covers commercial property. Dubai Law No. 6 of 2019 states in Article 3 that it applies to all master projects and jointly owned real property in the emirate, including in special development zones and free zones, with units defined to include commercial and industrial use.

That gives you rights as an owner as well as obligations:

• Under Article 27, the management entity cannot charge owners without RERA’s prior approval, and under Article 27(b) RERA will not approve a budget that has not been audited by a firm it recognises.
• Under Article 30(a), collections must be held in a dedicated account at a Dubai-licensed bank recognised by RERA, deposited within seven working days.
• The Dubai Land Department administers the regime through Mollak, which approves budgets and monitors the accounts.

So if you are being charged in a strata building, you are entitled to an approved and audited budget behind the figure. Where your building is single-owner rather than subdivided, this regime does not apply and the service charge is a contractual matter between you and your occupiers, which is a freedom and a responsibility at once.

Running costs and voids

• Service charges on vacant space, which continue regardless of occupancy.
• District cooling capacity charges, which accrue on contracted capacity whether or not the space is occupied. Under Executive Council Resolution No. 6 of 2021 this is a regulated tariff with a capacity element and a consumption element, overseen by the Regulatory and Supervisory Bureau.
• Void periods, which on commercial space are typically longer than residential because the occupier pool is narrower.
• Agency and marketing on each letting.
• Base build maintenance and plant replacement.
• VAT, since the sale and lease of commercial property is standard-rated at 5 per cent, unlike residential. Our investment guide sets out the wider tax position.

Commercial letting rewards patience and penalises vacancy. A well-underwritten five-year tenant at a sensible rent will out-earn a sequence of optimistic short lets, and it is a far better asset if you ever come to sell.

Common questions