Commercial Mortgages in Dubai
Finance Your Office, Retail, or Investment Property with Confidence.
Use Our Commercial Mortgage Calculator to Plan Smarter:
Whether you’re acquiring an office floor in Business Bay, investing in retail space in JVC, or financing a warehouse in Al Quoz—your commercial mortgage needs to be structured right from day one.
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To give you a fast, data-driven starting point, we’ve built an interactive Commercial Mortgage Calculator.
Why Consider a Commercial Mortgage in Dubai?
Dubai is one of the world’s most dynamic commercial real estate hubs. Tax-free income, robust tenant demand, and high-quality freehold assets make it a compelling market for investors and business owners alike.
Key Advantages:
✔ Preserve capital through structured payments
✔ Leverage income-producing assets
✔ Hedge against inflation with rent escalation clauses
✔ Refinance or consolidate existing commercial debt
✔ Benefit from competitive bank interest rates
What Qualifies as a Commercial Mortgage?
A commercial mortgage applies to any property primarily used for business or investment, including:
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Offices
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Retail shops
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Restaurants & cafés
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Warehouses & industrial units
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Medical or educational facilities
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Commercial floors in mixed-use buildings
Mortgages can be issued in your personal name, a company name, or through a special purpose vehicle (SPV).
How Are Commercial Properties Valued in Dubai?
Commercial properties are valued based on their potential income rather than comparable properties in the market.
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Valuation formula:
Property Value =
Net Operating Income (NOI)
Cap Rate
To determine market value, banks and valuers divide the property's net operating income (NOI) by the cap rate. For instance, if your commercial unit generates AED 240,000 per year in net income and the cap rate is 8%, the bank-assessed value would be AED 3,000,000.
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It’s important to note that banks often take a conservative view, applying discounted rental income or using average market rents instead of actual lease values. Being aware of this dynamic can help you negotiate better and avoid surprises during the loan process.
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Read more about cap rates, commercial property valuations and even try our valuation tool to check a property's value by clicking the link below:
Loan-to-Value (LTV) Guidelines
Banks in the UAE are typically cautious when it comes to commercial lending. For UAE residents and locally registered companies, the loan-to-value ratio usually ranges between 60% and 70% of the bank’s valuation. For non-residents, the LTV ratio tends to be lower, around 50% to 55%. If the borrower is a new business or the asset is held in an SPV, the bank may apply even more conservative limits or require additional guarantees.
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Because the bank’s valuation is often lower than the market price, the actual down payment required may be significantly higher than expected. I always advise clients to prepare for this possibility in advance.
Interest Rates & Repayment Options
Interest rates for commercial mortgages in Dubai are generally higher than residential loans, reflecting the higher risk profile. Fixed rates typically range between 4.5% and 5.5% for tenures of one to five years. Variable rates are commonly structured as EIBOR plus a margin, with total interest margins falling between 1.5% and 2.5% above EIBOR.
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Some lenders may offer interest-only periods—particularly useful for investors acquiring a vacant or newly tenanted property that is still stabilising.
Eligibility Criteria
To qualify for a commercial mortgage, both the borrower and the property must meet specific conditions.
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For borrowers—whether individuals, companies, or SPVs—banks look for a clean credit history, a valid trade license (if applicable), a stable business track record of at least two years, and clear financial documentation such as audited accounts or proof of income. Identification documents like a passport and Emirates ID are also required, or company incorporation documents in the case of offshore entities.
For the asset itself, the bank will require a title deed or Oqood (if under construction), existing tenancy contracts, lease renewal history, and evidence of strong market rentability. Properties in prime locations with stable tenant demand are far more likely to be approved.
Step-by-Step: How to Secure a Commercial Mortgage
The process of getting a commercial mortgage is more rigorous than residential loans, and can take several weeks. These are the steps involved in the process: ​
1. Initial Consultation
We review your asset, income potential, and goals. A feasibility check determines if the deal meets lender thresholds.
2. Bank Matching & Pre-Approval
Your case is submitted to suitable lenders. Pre-approvals typically take 5–10 working days.
3. Valuation & Income Assessment
Third-party valuers assess rental income and yield to determine the official market value.
4. Final Offer Letter
If valuation and eligibility align, the bank issues a binding offer letter outlining loan terms.
5. Signing & Registration
You sign the agreement and register the mortgage with Dubai Land Department. DLD fees and insurance are paid.
6. Loan Disbursement
Funds are released to the seller or developer. Deal complete.
Need Equity Release on an Existing Property?
If you already own a commercial property in Dubai, you may be eligible for equity release without having to sell it.
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This process allows you to unlock up to 60% of the current market value of your property—provided it is fully leased and generating stable rental income. A new valuation will be required, and the bank must be satisfied that the rental income can support the additional loan repayments.
Equity release is ideal for businesses looking to expand, fund working capital, or acquire additional assets.
Key Conditions For Equity Release:
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Up to 60% of current market value
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Fully leased and income-generating preferred
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Fresh RICS-compliant valuation required
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Income must support new debt load
Typical Costs to Budget For
When financing a commercial property, you should account for several associated costs. These include a bank arrangement fee, which typically ranges from 1% to 1.5% of the loan amount, and a valuation fee of AED 5,000 to AED 10,000 depending on the property size.
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The Dubai Land Department charges a mortgage registration fee equal to 0.25% of the loan amount, plus AED 290. If you are using an SPV or require legal structuring, additional legal or setup costs ranging from AED 5,000 to AED 15,000 may apply. Property insurance is mandatory, and for individuals, life insurance may also be a requirement.
Where possible, I help clients negotiate these costs down or integrate them into the overall financing package.
Common Financing Challenges (And How I Solve Them)
One of the most common issues is that the bank’s valuation comes in lower than the purchase price. To mitigate this, I help you forecast conservative yield assumptions so there are no surprises during the application process.
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Another challenge arises when banks refuse to accept the full value of rental income—especially if tenants are on short leases or have variable rent clauses. I work only with lenders who consider either market rent or projected income based on asset demand and tenant quality.
If you're a new business or don’t have a two-year operating history, I can structure the loan through a co-borrower, personal guarantee, or linked entity with a stronger financial profile.
For those looking to refinance after two or three years, I assist in finding better interest rates, longer terms, or accessing equity release at improved valuations.
Typical Costs to Budget For
Commercial property lending in Dubai can be incredibly rewarding—but only if the deal is structured properly. As a licensed investment strategist with CMAP certification and nearly two decades of Dubai market experience, I help business owners, investors, and developers:
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Secure the best loan structure
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Minimise upfront cost and long-term risk
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Optimise cash flow and exit strategy
Frequently Asked Questions (FAQs)
Commerial Mortgages in Dubai
1. What is the maximum loan I can get for a commercial property in Dubai?
The loan amount depends on your residency status and the bank’s valuation. UAE residents can typically borrow up to 70% of the bank-assessed value, while non-residents are usually limited to 50%–55%. Banks are conservative with commercial valuations, so your effective down payment may be higher than expected.
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2. How long does it take to get a commercial mortgage approved?
On average, the process takes 3 to 6 weeks from application to disbursement. Pre-approvals can be issued in 5–10 working days, but final approval is subject to property valuation, documentation review, and internal credit committee clearance.
3. What interest rates are available for commercial property loans?
Commercial mortgage rates typically start from 4.5% to 5.5% for fixed-rate options, and from EIBOR + 1.5% to 2.5% for variable rates. Rates vary depending on loan amount, asset type, income quality, and borrower profile.
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4. Can I get a commercial mortgage if I don’t live in the UAE?
Yes. Non-residents are eligible for commercial financing, although loan-to-value ratios and documentation requirements are more stringent. Most banks require the property to be income-generating and may ask for a local sponsor or SPV structure in some cases.
5. Do I need to have an operating business to qualify for a commercial mortgage?
Not necessarily. If the property is leased to tenants, the rental income may be used to service the loan. For new companies or SPVs without a track record, lenders may require a personal guarantee, a co-borrower, or additional collateral.
6. How is the property’s value determined for the loan?
Banks use an income-based valuation method, relying on net rental income and prevailing market cap rates. The property value is calculated by dividing the NOI (net operating income) by the cap rate. A third-party valuer appointed by the bank will carry out the assessment.
7. Can I finance a shell-and-core office or retail unit?
Yes, but it's more complex. Banks are more comfortable financing ready and leased units. For shell-and-core or vacant properties, lenders may reduce the LTV or defer approval until you secure a tenant. Some banks may also factor in fit-out costs and time to income.
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8. Are equity release or refinance options available?
Yes. If you already own a commercial property in Dubai, you may be eligible to release up to 60% of its current market value—provided it’s income-producing. Refinancing can also help you access better rates or consolidate debt after 2–3 years of ownership.
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9. What are the main costs involved in getting a commercial mortgage?
Expect to pay a bank arrangement fee (typically 1%–1.5% of the loan amount), a valuation fee (AED 5,000–10,000), DLD mortgage registration fee (0.25% of the loan), and legal or SPV setup costs if applicable. Insurance is mandatory and may also require prepayment.
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10. What if the bank values the property lower than the purchase price?
This is common in commercial real estate. The bank’s loan will be based on its own valuation, not the sale price. To manage this risk, I help clients pre-assess likely valuation ranges using market cap rates and rental benchmarks before committing to a purchase.