New service charge caps proposed for commercial towers

New service charge caps proposed for commercial towers. The change matters most to occupiers currently in the market and to owners weighing a sale against holding for income.

What follows is the practical read. Commercial decisions in Dubai turn on a handful of variables — the service charge, the fit-out condition, the licensing route and the realistic exit — and each of those can move the effective cost per square foot by a wide margin.

For occupiers, the practical implication is that a comparison based on asking rent alone is close to meaningless. Two units quoting the same figure can differ by twenty percent or more once cooling, parking, fit-out amortisation and rent-free periods are normalised. We run that normalisation on every shortlist.

For owners, the relevant question is whether the current income is defensible on review and whether the building's management supports the valuation. Assets with transparent service charges and a stable tenant mix consistently transact at tighter yields.

• Normalise on effective rent, not asking rent
• Verify the service charge history, not the current-year budget
• Confirm the licensing route before signing
• Model the exit at entry

If you are weighing a specific building or unit, we can provide the underlying figures rather than the summary.

Areas, service charges and returns are indicative and must be verified before offer.