Startups have a very thin margin of error. Since the whole business is a new setup, a wrong step can cause unbearable loss even before the business starts to meet the break even.
Entrepreneurship has increased over the years. To be a successful entrepreneur, you need to be cautious about executing your business strategy. Every factor must be taken into account and one of the most important steps pertains to renting the warehouse.
Almost every business needs storage facilities or warehouses. Fortunately, Dubai, a global business hub gives you multiple options for warehouses. However, if you are on a budget, renting is the right way to save money. There are certain things you need to consider before renting a warehouse in Dubai.
Let’s go through a detailed guide about the legal obligations, ideal areas, and the things you should consider before renting a warehouse in Dubai.
Legal Obligations for Renting a Warehouse in Dubai
For every business, new or old, it is important to understand the legal requirements and fulfil them to avoid any conflicts with law. To be eligible for renting any commercial unit in Dubai, you must have a valid trade licence.
Furthermore, you should have all your documents available for renting a commercial property in Dubai. The documents include but are not limited to:
- Business ownership proof
- Status of premises
- Compliance of premises with existing plans
- Necessary permits to use the premises
Types of Lease Agreements
There are four types of leasing agreements for renting commercial properties in Dubai. The types are as follows:
- Gross Lease – In this agreement, the tenant pays a pre-decided monthly rent. Whereas the landlord is responsible for other expenses such as taxes, insurance, and maintenance.
- Land Lease – The tenant pays for the piece of lands he leases to construct and conduct business on. When the lease ends, the landlord gets possession of the land and building.
- Triple-Net Lease – It is the favourable lease for landlords. In this agreement, the tenant pays rent and also takes care of other expenses like taxes, insurance and maintenance.
- Modified Net Lease – This is the preferred type of lease as it favours both the landlord and tenant. In this agreement, the tenant and landlord share the expenses.
The rental agreement must be registered with Ejari; the regulatory system for monitoring rental contracts between landlords and tenants. Registration with Ejari is important for all rental contracts.
When the agreement is signed and registered, you can get the water and electricity connections from DEWA. You should also get insurance against damages to make accidental loss manageable and ensure business continuity.
Things to Consider before Renting a Warehouse in Dubai
Apart from the legal obligations, there are some other things you should consider before renting a warehouse in Dubai. Here is a list of things you should do to get the best outcomes.
CALCULATE STORAGE CONSUMPTION
You should know the area you will be using. Some landlords may charge you for the area under the drip lines or start measuring from outside the warehouse. Therefore, it is important to know how they are measuring the area.
Additionally, you should also check the vertical area of the warehouse. If you plan on stocking items or boxes that may take up space vertically, then consider renting a warehouse with higher roofs.
On the other hand, if your inventory will not be taking any vertical space, you can rent a different storage facility instead of paying for the whole space.
KNOW THE ZONING
Land in any municipality is divided into zones for urban growth and development. These zones define the types of businesses and properties that are allowed. Make sure the warehouse or industrial property is zoned for your intended use.
Industrial lease rates can be cheaper but if someone wants to use the space for retail, the landlord must be ready to apply for a zoning amendment.
PARKING AREA
It is another important thing to consider before renting a warehouse in Dubai. Warehouses send and receive deliveries frequently. While the loading and unloading process takes place, the vehicles need to be parked, sometimes for hours. It is important to have a proper parking area with convenient entries for large vehicles.
Naturally, the warehouse employees also require car parking in Dubai for their vehicles. You should also consider the shift timings as you may require overnight parking facilities for night shift employees.
HEATING, VENTILATION, AND AIR CONDITIONING (HVAC)
Most warehouses don’t have the full building HVAC. If the tenants want it, they usually get it installed on their own. You can end up leasing a place with an HVAC system installed by the previous tenant.
You can negotiate with the owner to keep the existing HVAC system and ensure maintenance. Get the current system checked by a professional and ask the owner to bear the repairing cost, if any.
OPERATING EXPENSES
Another important step in our guide to renting a warehouse in Dubai is to know about the operating expenses. You must be well aware of what expenses you have to bear like taxes, insurance, maintenance, etc. You will be responsible for any of these costs if it’s in the contract.
You need to know the everyday costs and who will handle the garbage disposal and cleaning. The priority should be finding a place that can cater all your needs. Once you have narrowed down the places, you can go for the one with the lowest price.
LOCATION
Location plays an important role in any business. For warehouses, in particular, you should consider a place ideally located near major highways. Apart from that, the warehouse location could be close to areas with some restaurants and grocery stores so the workers can easily get their supplies.
The commute of the workers is another aspect to be considered. Ideally, the warehouse should be accessible by public transport in Dubai and have parking spaces for their personal vehicles. Understanding the area’s real estate dynamics can give a better idea about the rent of the place.
SECURITY
Our guide to renting a warehouse in Dubai wouldn’t be complete without covering the security aspect. You will likely be storing a good amount of valuable inventory in the warehouse so safety is a key factor.
Consider renting a warehouse with fencing as it can stop the crooks from entering the property. Also, make sure the area is safe for commuting. Additionally, you can prefer warehouses with CCTV monitoring and regular guards patrolling.
EXPANSION OPTIONS
As your business grows, so does the number of supplies. You can ask the warehouse owner if there are expansion options available if you want to lease the space next to the warehouse. In the long-term, this can save you valuable time and money that would be spent on transferring your entire inventory to a new warehouse.
Questions to ask the Warehouse Owner Before Signing a Deal
Apart from the tips for renting a warehouse in Dubai, there are some important questions you need to ask the warehouse owner before signing a deal. This can help you avoid future conflicts and give you a clear idea of what you are signing up for.
Here is the list of questions to ask the warehouse owner before signing a deal:
- What will be the duration of the lease and will there be any option for break?
- Will the lease be inside or outside the Landlord and Tenant Act?
- What maintenance and service will I be responsible for and what will be covered by the owner?
- What are the utility supplies (Gas, water, electricity, etc) available in the place?
- Are there any restrictions (access to certain areas) that I should be aware of?
- How soon can I get access to the place?
- When will the rent increase in the future?
As an added layer of precaution, you should hire a trusted professional for carrying out these dealings.
Areas to Consider for Renting a Warehouse in Dubai
Dubai is a global business hub and has ample options for you to rent a warehouse. However, certain areas can be ideal for renting a warehouse. Here is a list of the areas you should consider for renting a warehouse in Dubai:
For rental warehouses in these areas, you can check out the following:
- Commercial warehouse for rent in Jebel Ali
- Commercial warehouse for rent in Umm Ramool
- Commercial warehouse for rent in Al Quoz
- Commercial warehouse for rent in Ras Al Khor
- Commercial warehouse for rent in Dubai Investment Park
- Commercial warehouse for rent in Al Qusais
This was everything in our guide on renting a warehouse in Dubai. Undoubtedly, Dubai offers the best facilities to business owners which makes the city a big attraction for businessmen.
If you are looking for an office space to go with your warehouse, you can check out commercial property for rent in Dubai. For buying a place near your warehouse, you can check out property for sale in Dubai.
Stay tuned to UAE’s top property blog for more information.
