Investment in Commercial Real Estate

Initially, the client considered purchasing property in the Marina or Abu Dhabi. However, after reviewing current market data, we found that these investments did not meet the expected return requirements: the payback period ranged from 7 to 10 years, with a net ROI between 10 and 14 percent. Following the analysis, the client decided to explore commercial real estate in other areas with a significantly higher return on investment.

After thorough analysis and discussions on various properties, the client chose to invest in a ground-floor commercial unit in the Lum1nar Tower project by developer Object1, which is set for completion in 2026.

To enhance the client’s understanding of the investment process, we prepared an analysis on commercial real estate and developed criteria for selecting commercial properties:

• Location — a key factor for attracting tenants.
• Usable Area — analysis to determine the unit’s potential.
• Intended Use — verification of suitability for different business activities.

The client received consulting on the potential leasing of the unit, and negotiations with potential tenants confirmed that the unit meets their requirements and would be considered for future lease agreements.

Since the client planned to lease the unit as an individual, the following issues arose:

• Intended Use — verification of legal documentation for compliance with commercial purposes.
• Taxation — consulting on VAT, which applies when the income exceeds 375,000 AED per year.
• VAT Registration — guidance was provided on the VAT registration process as an individual.

After analyzing the property and obtaining legal advice, the client decided to invest in a 2,345 sqft commercial unit in Lum1nar Tower, including three parking spaces for service vehicles.

During negotiations with developer Object1, we secured a discount for the client. We also provided full legal support for the transaction, including the signing of a deposit agreement and arranging an optimal payment plan for the client.

The transaction took three months as the buyer, who initially began the transaction as an individual, decided to complete the purchase under a legal entity. This required the client to register a company, obtain a license for leasing the property, and open a bank account. These procedures took approximately two months due to the need for multiple checks.