Commercial Property Mortgage in UAE 2024


The UAE has been the hub of attraction for many commercial centers. Every day one or the other business pops up in the country. Several businesses established in the country reach new heights of success.

The diverse population of the UAE is one leading contributor behind the bountiful business opportunities.

Apart from favorable demographic factors, the country's financial regulations are also perfect for a business to thrive. Both new and established businesses in the country are blessed with an ideal environment for entrepreneurship.

A major benefit for businesses in the UAE includes the ease with which commercial property mortgage loans can be acquired in the country.

What is a Commercial Mortgage?

A commercial mortgage is any mortgage for commercial property, including office buildings, retail spaces, industrial buildings, hotels, and more. Commercial mortgages usually have higher interest rates compared to residential mortgages and take more time to process due to the complexity of appraising the underlying property.

Commercial Property Mortgage Loans Dubai 2024

Commercial property mortgages for a business can help in covering a significant amount of the cost of a commercial real estate property. A business can also purchase commercial assets with such loans, which could not have been possible to purchase otherwise.

Even if a business can afford to purchase its commercial property, a commercial property mortgage loan can help businesses retain the cash for future use.

Commercial property mortgage loans can offer numerous other benefits. The benefits will depend upon industry, business opportunities, and situation. But every business can gain something or the other from a commercial property mortgage loan.

Steps To Apply For A Commercial Mortgage Loan

You need to follow a few steps before applying for a commercial mortgage loan. The steps are as follows:

1. Assess Your Financial Status

Can you repay all your monthly installments? Before applying for a commercial mortgage loan, you need to show evidence.

A lender needs to know that your business will be capable of repaying the loan. You have to show that your financial status can deal with commercial mortgage payments. You need to have a practical idea about your finances before applying for a commercial mortgage loan. You need to check the maximum payment your business can afford to pay every month. 

2. Find A Property

You have to find a property before you can apply for a commercial mortgage loan. You should begin by creating a list of requirements in terms of location. It will help in narrowing down your search for the perfect business location. The major leasehold commercial properties like labor camps and warehouses are located in Free Zones. Some of the other major industrial areas in the UAE include the following:

  • Dubai Investment Park
  • National Industries Park
  • Dubai Production City
  • Dubai Industries Park
  • Al Hamra Industrial Zone 
  • Al Ghail Industrial Area
  • Al Jerf Industrial Area
  • SAIF Zone

Your industry and business activity will play a key role in detecting the perfect location for you. Free Zone areas can be perfect for businesses dealing with export, import, and warehousing. Such companies will be able to have full business ownership and tax exemptions in the Free Zone areas. 

Businesses dealing with manufacturing, trading, engineering, or transportation can benefit from commercial properties at Mussafah in Abu Dhabi and Al Awir, Jebel Ali Industrial areas, and Al Qoz in Dubai. The Sharjah Industrial area would also be a perfect commercial location for such businesses. 

You should engage with a real estate agent to begin your search for the ideal property. A real estate agent can help you get on platforms where property owners have made their listings. But you need to be careful while finding a reputable real estate agent to help with your search.

3. Find A Trusted Lender

You can approach various lenders in the country for your commercial property mortgage loan. You can go to a reputed bank to get your commercial property mortgage loan. For instance, RAKBANK can offer you a low interest rate of 2.69%. You can get twenty five years of repayment tenor if you opt for this loan. You can also ask your acquaintances to recommend lenders appropriate for your business.

Remember, commercial property will be the heart of your business. Therefore, choose a lender who will be able to understand your company and its business operations. Your lender should become a partner in the growth of your business.

4. Draft A Business Plan

When you approach a lender, they might ask for an elaborate business plan. You have to provide them with a clear idea about your business plan. You need to show them your plans to make your business venture more profitable.

Your business plans and projections need to be as detailed as possible to earn the trust of the lender. If the lenders feel confident about your business, they will be more likely to lend you a commercial property loan. The lenders will be eager to know how the new commercial property will impact your business and lead to future growth.

5. Think About Other Fees And Costs

Apart from paying the mortgage rate, you will have to think about the other costs associated with taking out a commercial property mortgage loan. You have to focus on the valuation fees and processing fees. Some other costs include legal fees and property insurance fees. You also need to think about the redemption fee in case you pay off your mortgage early. 

Commercial Mortgage Loan For A Startup

A startup often struggles with arranging its finances. A commercial mortgage loan can help in obtaining fixed assets while repaying the loan easily. A startup will be able to increase its equity while maintaining its liquidity for more productive purposes. 

Commercial Mortgage Loan For An Established Business

An established business will have more financial prowess than a startup. But a commercial mortgage loan can become beneficial for an established business if it wishes to expand. An established business can also obtain a higher loan amount which will ensure the stability of the business in the long run. 

Buying a commercial property in the UAE is quite straightforward and can be done without much hassle. You only need to follow the right steps and get in touch with a trustworthy financial partner and property advisor.  

Final Thoughts

Buying a commercial property in the UAE is quite straightforward and can be done without much hassle. You only need to follow the right steps and get in touch with a trustworthy financial partner and property advisor.  



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