Commercial mortgages in Dubai: buying an office or a warehouse on credit

What changes compared with a home loan

The deposit is larger — commercial lending typically starts around a third of the price and can run to half. The term is shorter, commonly in the ten-to-fifteen-year range rather than twenty-five. Rates are quoted case by case rather than off a rate card.

Most importantly, the underwriting question changes. A residential lender asks whether you can pay. A commercial lender asks whether the asset can pay: what the lease is, who the tenant is, how long the term runs, what happens at renewal. Your own income supports the file, it does not carry it.

Expect more documentation: company accounts, trade licence, bank statements, and a coherent story about how the space will be used or let.

What can be financed

Offices in business districts — Business Bay, DIFC and the free-zone towers — are the most common. Warehouses and light-industrial units in the logistics corridors are financed against tenant covenants. Retail and showrooms are the hardest, because their value moves with footfall and with the specific location rather than with the district.

Owner-occupier purchases are viewed differently from investment purchases: a business buying its own premises is underwritten on the business, and the rent it stops paying is part of the case.

Remember the tax line that does not exist in residential: commercial property carries 5% VAT. It belongs in the model from the first spreadsheet, not as a surprise at signing.

When leverage is worth it

The arithmetic is simple and unforgiving: leverage helps while the net yield on the asset exceeds the all-in cost of the debt, and hurts the moment it does not. On commercial property the net figure is what matters — service charge, fit-out cycles and void periods between tenants are larger than in residential.

Void risk is the one to respect. A vacant apartment is re-let in weeks; a vacant office in a soft market can sit for a year while you service the loan. Model a void of at least several months and see whether the deal survives it.