Scouting for an office location in Dubai

Office in DubaiMohanad Alwadiya

We are  about to start a new business and open an office in Dubai. What are some of the things I should consider? -Marta s., Dubai

There are lots of things to consider but I will touch on some of the most important.

The clichéd expression "location, location, location" is critical. It's all about proximity and the convenience and prestige a well-chosen location can bring to your potential customers, staff and business associates. But make sure you don't mix your ambitions with your capabilities.

Everybody wants a prestigious address, but only a few can realistically afford it.

Beware of over capitalisation. It is easy to get earned away with your office design and investing too much money on items that tickle your personal fancy, but will have little real effect on your customers or your staff. Ask yourself: "what really matters to my customers?" and "will my new office really have an effect on the productivity and effectiveness of my staff?" Be brutally honest with your answers. Remember, not only are you outlaying cash, amortisation charges will also be hitting your bottom line.

Sometimes, a shiny new office may look very nice and make you feel good, but will only have minimal real effect on improving your business. Having said that, research has shown that a well-thought-out solution can have a very positive effect on client impressions and staff performance.

It's all about balance and determining the appropriate levels of investment.

Think about purchasing your premises. It's in your interests to do a complete analysis to see if this option will work for you. We have advocated for several years that, cash flow permitting, businesses acquire their own premises. If you are a business committed to operating long term in Dubai, it makes sense to own your office space, particularly if it is a well-negotiated purchase.

There is no tax advantage in leasing in Dubai and, as long as your office space is appreciating, your balance sheet will look a whole lot better and grow stronger over time. When it comes to office space, there are still some excellent deals to be had.

If you decide to lease your premises, try to get the best deal possible and lock it in for three to five years. Lease rates in Dubai will increase going forward and make sure you take advantage of current rates. This will make your financial planning easier.

I have been trying to sail my apartment for three months. My problem Is that all offers so far have been at least 15 par cent below the price suggested by the broker. Should I change brokers and start again? -Michael W., Dubai

It sounds as though you have selected your current broker because he quoted the highest price for your property? If so, you may need to change brokers. Some brokers will promise anything to get listings. Agents that quote higher prices will waste your time and are detrimental to the industry. Eventually, the broker will try to convince you to lower the price using a wide variety of excuses.

Work with agents that give you facts-based advice and analysis with no fluff and excessive promises. Dropping the price is not always the solution. You can achieve higher returns if you work with a professional broker who can introduce unique and innovative added-value elements to your property proposition and can offer you effective marketing advice and a comprehensive sales and marketing plan to promote your property and present it in a professional and attractive manner.

I own an apartment which Is currently leased. The lease will expire in six months and I wish to furbish the apartment and use it personally. My tenant Is saying she does not want to leave and is threatening to go to court. I need your advice please. – Pedro P., Dubai

You are within your rights to evict a tenant for the purpose of refurbishment and eventual personal use. However you need to consider the rights of the tenant also.

Law No. 33, Article 25 (2) provides protection to the tenant by stipulating under which circumstances a tenant can be evicted. If the landlord wishes to demolish the property or conduct construction, which makes it impossible for the tenant to use the property, the landlord has grounds to effect an eviction. This would appear to apply in your case. If challenged, however, you would need to provide proof of your intentions such as plans, contractor agreements, etc.

The landlord also has the right to evict a tenant if the landlord wishes to use the property or for a next of kin. The landlord will have to prove that the landlord does not have access to an alternative property as a suitable alternative.

The landlord must give at least 12 months notice of eviction, the reasons and necessary documentation supporting the notice to evict.

I am currently deciding on the purchase of an apartment close to a Metro station, which I intend to lease. The seller wasn't happy with my offer and claimed the property commands a premium of around 7 per cent because it is within easy walking distance of a Metro station. What premium should I be factoring into my offer? –Salman S., Dubai

A 6 per cent premium sounds reasonable. Being situated close to the Metro is all about convenience, cost and lifestyle efficiency. Your prospective tenants can enjoy a cost-effective, fast, comfortable and reliable mode of transport to work, visit friends or light shopping. They don't have to worry much about traffic hassles, road works, parking and wear and tear on the family car, while the need for a second family car is diminished. Many tenants are prepared to pay a rental premium for these benefits.

Our studies have concluded that properties located within 500m of a Metro station can command a premium between 6 percent and 11 per cent when compared to similar properties with no feasible ambulatory access to the Metro.

Source: Mohanad Alwadiya, For Property WeeklyPW
Managing Director of Harbor Real Estate and advisory board member and Instructor at the Dubal Real Estate Institute, the offtclal training and certification arm of the Dubal Land Department.


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