Acquisition of commercial property

A client has requested assistance in finding a commercial property to purchase with the goal of leasing it out and achieving a high ROI. The main requirements are:

• Liquidity of the asset
• Ease of leasing after purchase
• High return on investment.

After analyzing the market, we proposed an option with an existing tenant (a beauty salon) that meets the investor's criteria:

• High location liquidity: Business Bay, where there is strong demand for commercial real estate.
• Area growth potential: A new project, VYB by developer GINCO Properties, is being built nearby, which will increase future demand for commercial properties in the area. Additionally, a park will be constructed within the complex, attracting more visitors to the zone.
• Versatile layout: The space is suitable for various types of businesses, such as a grocery store, pharmacy, beauty salon, or cafe. Its rectangular shape and 1,100 sqft area make it convenient for subletting to different businesses.
• High ROI: 10%. The initial cost of the property was 2,450,000 AED, with a tenant (a beauty salon) leasing it for 230,000 AED per year on a 3-year contract with a 5% annual increase. Negotiations reduced the purchase price to 2,300,000 AED, ensuring a gross ROI of 10%.

Property details: Located in Oxford Tower, Business Bay, on the ground floor. Size – 1,100 SQFT. Initial price – AED 2,450,000. Current tenant – Tiramisu beauty salon, with an annual rent of AED 230,000.

Business Bay is one of Dubai’s most vibrant business districts and commercial centers, famous for its tall buildings and impressive skyline. The neighborhood has many conveniences, like easy access to shopping malls, a variety of restaurants, reliable public transportation, and healthcare facilities. With new hotels, restaurants, offices, shops, and wellness centers opening up, the area is growing fast, becoming an extension of Downtown Dubai.

Landmarks: Business Bay is home to iconic landmarks like the JW Marriott Marquis and the scenic Dubai Water Canal.

Connectivity: The area is well-connected to the rest of the city via major roads, including Ras Al Khor Road (E44) and Sheikh Zayed Road (E11), making it easy to get around.