Commercial mortgage in Dubai: offices, retail and warehouses under construction
A commercial mortgage in Dubai covers offices, retail units and warehouses, but banks finance at most 60% of the price, so the buyer puts down at least 40%. According to Roman, the mortgage broker interviewed by Oleg Svyatenko, the rate is 0.5 to 1 percentage point above a residential loan and approval takes longer.
Is commercial property more profitable than residential in Dubai?
On average, yes. Roman's figures for the period before the regional escalation: residential property returns around 7.5% a year, while commercial property in a good liquid area returns around 12%, with long leases and roughly 95% occupancy.
That gap is the reason Oleg finds commercial mortgages more interesting than ordinary ones. The landlord rents to a business, not to a private tenant, and the lease runs for three to five years instead of one.
Roman's point is that the difference in return is about four percentage points, while the difference in the mortgage rate is far smaller. On paper the spread works in favour of commercial property.
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What is the main risk of commercial property in a crisis?
Vacancy. When businesses close and people lose their jobs they still need somewhere to live, so residential demand survives a crisis. Nobody can predict how full the offices will be, and that is the other side of the higher yield.
Roman reminded viewers that most people in the UAE are residents with businesses, not citizens, and some leave in hard times. Each investor has to choose between commercial and residential according to their own risk profile.
At the time of recording the unstable period had lasted about a month, and he thought it too early for forecasts. There were no official statistics. By feel, tourists had left, but residents were still in the evening traffic and office staff were at their desks.
The sectors that felt it most, in his view, were tourism and hospitality: hotels, restaurants and cafes. Some property brokers had moved to remote work but were still working.
Are commercial mortgage rates higher than residential ones?
Yes, but not by much. Roman puts the difference at about half a percentage point to one percentage point. Before the escalation that meant commercial rates of roughly 4 to 5%.
He set that against the yield gap of about four percentage points. The extra cost of borrowing is small compared with the extra rent, which is why buying commercial property to let can look more attractive than residential.
Which offices do banks prefer to finance?
Banks finance the business, not the property type. A good office that is already let to a solid tenant with reliable monthly payments is what Roman calls the perfect deal, and it may even earn slightly better terms than the market.
The premium segment is the strongest. Up to February 2026, he said, average office occupancy was 95%, and in the luxury segment it was 98%. As with housing, Dubai has high demand and a shortage of top-tier space.
The age of the building matters too. A newer tower of decent quality will last longer, which lowers the bank's risk and makes approval easier.
The best case of all is a company buying the office it already rents. If you are opening a company in Dubai and aiming at the premium segment, Roman considers buying that office with a mortgage exactly the right move.
What happens if the tenant moves out?
The owner pays the mortgage alone for some months. An apartment can be re-let within a month. An office usually cannot, because almost every new business does its own fit-out and expects a grace period while the works are carried out.
Roman's advice is not to underestimate this. An investor who buys an office with a loan in order to rent it out should budget for a number of months without rental income.
The same logic shapes the bank's offer. An office with a three-year or five-year lease already running is easier to approve than an empty one. For an empty unit the rate will be higher or the bank will lend 50% instead of 60%.
A banker who sees that the unit is in a strong area and would be re-let quickly may still agree. The bank is always hedging against risk, and liquidity is the argument that reduces it.
The 60% ceiling: how much a bank will lend
The maximum is 60% of the price, so the minimum down payment is 40%. Financing of 80% is not available for commercial property. Roman described this as the banks' internal policy, in answer to Oleg's question whether it was a law.
Oleg summed up the recipe for a strong application: a new tower, and either an office with a tenant on a three-to-five-year lease or an office the buyer was renting for his own company.
Can a private individual get a mortgage for an office?
Yes, but the choice is very narrow. According to Roman, one bank is left that still lends to an individual for an office purchase, and he named it as ADCB.
Why is a commercial mortgage harder to get?
It takes longer, needs more documents and carries a slightly higher rate. With a residential file Roman expects approval at the chosen bank with about 99% probability. With commercial property the review is longer and success on the first attempt is less likely.
He described the UAE market as more than 20 banks, each with five or six programmes for different segments: resident or non-resident, salaried or not, and for employees the type of licence and company matter as well.
Some banks avoid whole categories of borrower. His examples, which he stressed were hypothetical, were a bank that will not lend to property agents and one that will not work with certain passports.
So the chance of reaching the right bank and the right banker on the first try is not 100%. It may take five attempts, and each one costs time. The list of documents is public; the skill is in presenting why the unit is liquid and the risk is low.
Oleg added his own experience of a refusal with no explanation, and of a savings account opened at one bank for salary and commission payments that caused repeated problems until a proper salary account was opened elsewhere.
Extra costs: 4% transfer fee and 5% VAT
A commercial purchase carries 5% VAT on top of the 4% Dubai Land Department fee, and the bank covers neither. Roman confirmed that banks finance only their share of the price, so these sums come out of the buyer's own funds.
Can you get a mortgage for a warehouse under construction?
Yes. Banks lend on retail units and warehouses, and one bank has a programme for warehouses that are still being built. It applies only to freehold property in two emirates, Dubai and Abu Dhabi, and requires at least 40% of the buyer's own money.
There are restrictions by zone, and leasehold does not qualify. The bank works with the zones where plots are currently being sold. A business can build on its own plot or buy from a developer already building there.
Roman would not quote an exact rate because it depends on the borrower. The bank's published wording says up to 7.5%, which in practice could be 5.5% or 6%. It depends on the client's profile and on the business that will occupy the warehouse.
Oleg called it a remarkable arrangement for foreigners, a construction loan in a free zone, and said he does not know of similar programmes in other countries.
Office or warehouse: which is the better purchase?
Buy what your business uses. If the company trades goods, take a warehouse. If it has a large team that must work on site, take an office. Roman declined to give a general financial recommendation beyond that.
On whether to borrow now, his answer was yes. The future cannot be predicted, but an existing mortgage can be refinanced. If terms improve, you refinance. If they get worse, you have already locked in today's terms.
His arithmetic rests on rents. He cited office rents in liquid locations rising by around 30% in 2025 compared with 2024, growth that in his view covers the interest on a bank loan.
The alternative he warned against is still paying rent years later and regretting that the office was not bought, or the warehouse not built, in 2026.
Frequently asked
What is the minimum down payment on a commercial mortgage in Dubai?
40%. Banks finance at most 60% of the price as a matter of internal policy, and for an empty office the bank may lend only 50%.
How much higher is the rate on a commercial mortgage?
About 0.5 to 1 percentage point above a residential loan, according to Roman. Before the regional escalation that put commercial rates at roughly 4 to 5%.
Does the bank cover VAT and the transfer fee?
No. The buyer pays the 4% Dubai Land Department fee and 5% VAT on commercial property from their own funds.
Do banks lend on leasehold warehouses?
Not under the construction programme described in the video. It requires freehold property and currently covers only Dubai and Abu Dhabi.
Is an office with a tenant easier to finance than an empty one?
Yes. A running three-to-five-year lease lowers the bank's risk, while an empty unit means a higher rate or a lower loan-to-value.
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