If you hold UK property and you’ve been shown a Dubai office investment this year, you’ll have seen a number somewhere between 8% and 15%. You’ll have seen the words “tax free” nearby.
One of those is roughly true at the right entry price. The other is probably false for you, and almost nobody selling Dubai property to British investors says so.
This is the honest version. Dubai commercial yields set against UK ones on the same basis, what the UK tax position actually is if you’re resident here, and what I’d want to see before buying a floor.
Why UK investors are looking at Dubai offices at all
The Dubai office market has done something unusual, and the data is independently published rather than agency marketing.
Grade A office rent in Dubai, weighted average across the city, in AED per square foot per year:
| Year | AED per sq ft per year |
|---|---|
| 2020 | 180 |
| 2021 | 200 |
| 2022 | 210 |
| 2023 | 240 |
| 2024 | 290 |
| 2025 | 400 |
That’s 38% growth in 2025 alone. Grade B+ rose 52%, to 320.
The cause is supply, not a demand boom. Total Dubai office vacancy fell from 20% in 2020 to 4% at the end of 2025, with Grade A at 3%. Dubai stopped building offices: completions dropped from 1.7 million sq ft in 2020 to around 607,000 in 2025, while 3.36 million sq ft was leased and sold in that same year.
A market leasing several times more space than it completes is one where rents move, and they did.
What Dubai commercial property actually yields
Business Bay Grade A rents at AED 350 to 450 per sq ft per year. Ready Grade A and B+ stock in the central districts is asking AED 4,100 to 7,300 per sq ft.
Before dividing one by the other, a warning about that price range, because it’s where most published Dubai yields go wrong. The 4,100 to 7,300 range spans Grade A and Grade B+ across four districts. The bottom of it does not buy a Business Bay Grade A floor. It buys the weakest stock in the basket. Put a Grade A rent on a 4,100 price and you’ll produce a yield well into double digits, and you’ll have done it by pairing a good building’s rent with a poor building’s price.
So the table below starts at 5,000. That’s my own filter rather than a published figure: it’s the level below which I think a central-district Grade A floor is realistically bought, and you should treat it as a judgement rather than a number from the report.
Gross yield on asking price
| Entry price | Rent 350 | Rent 400 | Rent 450 |
|---|---|---|---|
| AED 5,000/sq ft | 7.0% | 8.0% | 9.0% |
| AED 5,700/sq ft midpoint of published range | 6.1% | 7.0% | 7.9% |
| AED 6,500/sq ft | 5.4% | 6.2% | 6.9% |
| AED 7,300/sq ft top of range | 4.8% | 5.5% | 6.2% |
The number to hold on to: 8% at a 400 rent requires an entry at or below AED 5,000 per sq ft. Above that it falls away fast. At the midpoint of the published asking range you’re at about 7%. At the top you’re between 4.8% and 6.2%.
Dubai commercial isn’t a higher-yielding asset class so much as one where the yield depends almost entirely on what you pay. Buy at the average of the published range and you’ve given most of the advantage away before you start.
Then subtract the cost of buying
Commercial property in Dubai carries 4% Dubai Land Department transfer fee plus 5% VAT, so roughly 9% on top of the price. Against what actually leaves your account:
| Entry price | Rent 350 | Rent 400 | Rent 450 |
|---|---|---|---|
| AED 5,000/sq ft | 6.4% | 7.3% | 8.3% |
| AED 5,700/sq ft | 5.6% | 6.4% | 7.2% |
| AED 6,500/sq ft | 4.9% | 5.6% | 6.4% |
| AED 7,300/sq ft | 4.4% | 5.0% | 5.7% |
A VAT-registered corporate buyer normally recovers the 5% as input tax, which turns it into cash flow rather than cost. An individual buyer carries it. Your accountant, not your agent, should answer that one.
Every figure above is gross: before service charge, void periods, leasing costs and fit-out incentives. I won’t publish a net yield, because the service charge varies building by building and anyone quoting net without having read that specific building’s numbers is guessing with your money.
| UK asset | Net initial yield |
|---|---|
| London West End core offices (Mayfair, St James’s) | 3.75% – 4.00% |
| City of London prime offices (10-year income) | 5.25% |
| Prime distribution warehousing (20-year income) | 5.25% |
| Major regional city prime offices (10-year income) | 6.50% – 6.75% |
| South East town prime offices (10-year income) | 7.25% |
For a whole-market view, UK all-property net initial yield was 5.3% and the equivalent yield 6.8% as at 30 June 2026, on MSCI UK Monthly Property Index figures. I’m quoting those second-hand, from Columbia Threadneedle’s July 2026 UK Real Estate: Talking Points, because MSCI’s index is subscription-only.
And UK residential, since most people reading this own some: gross rental yields averaged 7.35% across eight major UK cities in Q2 2026, with London at 6.62% and Liverpool at 8.64%. That’s Global Property Guide data, built from asking rents against asking prices on a single portal rather than from transactions, so treat it as indicative of those eight cities and not as a figure for the UK housing stock.
So what’s the honest read?
A Business Bay Grade A floor bought at or below AED 5,000 per sq ft produces roughly 8% gross, or about 7.3% once acquisition costs are counted.
That 7.3% still isn’t a net initial yield. It’s had purchaser’s costs taken off the price and nothing taken off the rent: no service charge, no void allowance, no letting or management cost. A genuine NIY deducts both ends. Note too that UK net initial yields already have UK purchaser’s costs, mostly stamp duty, built into their denominators, so don’t count the Dubai 9% twice.
Against 6.50% to 6.75% net for prime regional UK offices, that leaves a headline gap of roughly 55 to 80 basis points, and the deductions I haven’t been able to make sit inside that gap rather than outside it. Which way it settles turns on one thing. Dubai Grade A rents are quoted triple-net, with the tenant carrying the service charge. If that convention holds on the specific floor and the sale contract confirms it, most of the gap survives. If it doesn’t, the gap can close completely.
So the truthful answer to “does Dubai beat UK regional offices on yield” is that I can’t tell you until I’ve seen that building’s service charge and who carries it. Anyone who answers it faster than that is guessing. Against City of London at 5.25% net the margin is wider and survives more assumptions. Against a UK residential gross yield of 7.35%, compared gross for gross, Dubai is closer than you’d think.
Which is why the case for a Dubai floor doesn’t rest mainly on the headline percentage. It rests on 38% rent growth in a single year, Grade A vacancy at 3%, and a corporate tenant on a multi-year lease instead of an individual on twelve months.
The tax question, answered properly
This is the part worth reading twice, because it’s where most Dubai marketing aimed at Britain is quietest.
If you are UK tax resident, your Dubai rental income will normally be taxable in the UK. HMRC’s wording is that UK residents “normally” pay UK Income Tax on foreign income, and that explicitly includes rental income from overseas property. It goes on your Self Assessment return.
The UAE levies no personal income tax on rental income, so there’s usually no foreign tax to credit against the UK bill. For a UK-resident higher or additional rate taxpayer, that means keeping rather less of a Dubai rent than the brochure implies. If you’re buying through a company rather than in your own name, UAE corporate tax may apply to the entity, which is a separate question again and one for your accountant.
There is an important exception, and it may well apply to you
The remittance basis for non-UK-domiciled residents ended on 6 April 2025, but it was replaced rather than simply abolished. The Foreign Income and Gains regime relieves most foreign income, rental income included, from UK tax for up to four consecutive tax years, for anyone who becomes UK resident after at least ten consecutive tax years of non-residence.
If you’ve been in the Gulf for a decade and are thinking about coming back, that is directly relevant to you. It has to be claimed on your tax return, and claiming it costs you your personal allowance and CGT annual exemption for that year, so it isn’t automatically worth doing.
So when a Dubai brochure says “tax free”, it’s describing the UAE’s treatment rather than yours. It’s accurate about Dubai and silent about your position. For most UK-resident buyers that silence is the whole story, and for a returning long-term expat the real answer is more generous than the brochure could have told you anyway.
I’m a property broker and not a tax adviser, residence rules are considerably more involved than a blog post can carry, and the FIG rules in particular have conditions I haven’t set out here. Get a UK-qualified adviser to model your own position before you commit to anything.
Currency
The UAE dirham is pegged to the US dollar at 3.6725, and has been for years. The dirham does not float against sterling; it floats against sterling via the dollar.
That means a UK investor buying Dubai property is taking a GBP/USD position whether they intended to or not. If sterling strengthens against the dollar, your rent converts to fewer pounds and your capital value falls in sterling terms, with nothing having changed about the building. If sterling weakens, the reverse. Over a five to ten year hold that can comfortably outweigh a 150 basis point yield advantage in either direction.
That isn’t a reason to avoid Dubai. It is a reason to size the position knowing that part of what you’re taking on is a currency view.
What’s coming, which is the strongest argument against all of this
Around 1.85 million sq ft of Dubai office space is forecast to complete in 2026, and 7.65 million sq ft is announced for 2027 to 2030. About 3.16 million sq ft of that sits in Business Bay across six schemes, which is 41% of the national pipeline landing in one district.
Three per cent vacancy is what produced the rent you’d be buying into. That pipeline is what could unwind it. Anyone pitching you Dubai commercial without raising it is either not reading the market or hoping you aren’t.
Two things sit on the other side. Announced isn’t delivered, and Dubai completions have slipped every year since 2020, which is precisely why vacancy collapsed.
And 7.65 million over four years averages about 1.9 million a year, against 2025 take-up of 3.36 million sq ft. On that comparison the market still runs short. Be careful with it, though, because 2025 was an exceptional year: take-up in 2024 was 550,000 sq ft, and in 2022 it was 8.9 million. Absorption in this market swings hard, and a pipeline judged against a single strong year is a fragile piece of reassurance. I’d rather give you all three numbers than the flattering one.
Take it seriously without treating it as settled. In practice that means buying at a price that still works if rents flatten.
What I’d want to see before buying a floor
Commercial floors are what I spend the week on. This is the filter, and you’re welcome to use it on me.
Entry at or below AED 5,000 per sq ft for Grade A in a central district. Above that the arithmetic stops working and you’re buying a story about future rent.
A rent that belongs to the building’s own district. Swap Business Bay’s 400 for DIFC’s 650 and the same floor’s yield rises by more than 60% on paper, with nothing having changed about the building. Whenever anyone shows you a number, ask what rent they used and which district it came from. If they can’t answer both halves it isn’t a yield, it’s a hope with a percentage sign attached. Ask me the same thing.
The service charge in AED per sq ft, in writing, before an offer goes in. Not after.
Net leasable area, not gross built-up. If the quoted area is gross, your real cost per usable foot is higher than the number on the page, and so is every yield derived from it.
A floor more than one kind of tenant would take. An odd shape, weak power supply or poor goods access will narrow the tenant pool to almost nothing, and you won’t notice until you’re trying to let it.
Most of what’s on the market fails at least two of those. That’s not an argument against Dubai commercial, it’s why the individual floor matters far more here than in UK residential, where one two-bed in a block is much like another.
Can UK citizens buy commercial property in Dubai?
Yes. Non-GCC nationals can own property freehold in Dubai’s designated freehold areas, which include Business Bay, and you don’t need to be resident in the UAE to do so. Title type varies by plot, so confirm the specific building’s designation and tenure with a Dubai conveyancer before you commit.
Do UK residents pay tax on Dubai rental income?
Normally yes. If you’re UK tax resident, HMRC treats overseas rental income as taxable UK income, declared through Self Assessment, and the UAE charges no personal income tax on it, so there’s usually no foreign tax credit to offset. The main exception is the Foreign Income and Gains regime, which replaced the remittance basis on 6 April 2025: it can relieve foreign rental income from UK tax for up to four years if you become UK resident after at least ten consecutive tax years of non-residence. It must be claimed, and claiming it forfeits your personal allowance for that year. Take UK-qualified advice on your own position.
What yield does Dubai commercial property actually produce?
On the published data, a Business Bay Grade A floor bought at or below AED 5,000 per sq ft yields roughly 8% gross at a 400 AED/sq ft rent, falling to about 7.3% once the 4% transfer fee and 5% VAT are counted, and lower again after service charge. Bought at the midpoint of the published asking range it’s nearer 7% gross. Anything above 10% deserves a hard look at which district’s rent was used.
What does it cost to buy commercial property in Dubai?
Beyond the price: 4% Dubai Land Department transfer fee and 5% VAT, roughly 9% combined. The published sale basket covers units above 1,500 sq ft, so at AED 5,000 to 7,300 per sq ft the smallest lot runs from about AED 7.5M to AED 11M, and a full floor is a multiple of that.
Is Dubai commercial property better than UK buy-to-let?
On gross yield, sometimes, and by less than most pitches suggest. Gross yields across eight major UK cities averaged 7.35% in Q2 2026. The real differences are elsewhere: a corporate tenant on a multi-year lease rather than an individual on twelve months, a market at 3% Grade A vacancy, and 38% rent growth in a single year. Against that sit a thinner exit, longer voids, currency exposure, and a supply pipeline arriving from 2027.
How does Dubai commercial compare to UK commercial yields?
Carefully, because the two are usually quoted on different bases. UK prime yields are net initial yields; Dubai figures are typically gross. Knight Frank put City of London prime offices at 5.25% and major regional city offices at 6.50% to 6.75% net in September 2026. A Dubai floor at roughly 7.3% after acquisition costs, but before service charge and voids, sits about 55 to 80 basis points above prime UK regional offices. Whether that gap survives depends on the service charge on the specific building and who carries it, which is why it’s worth establishing before you compare anything.
What are the main risks of investing in Dubai commercial property?
Supply from 2027 onwards, concentrated in Business Bay. Longer void periods than residential, because far fewer tenants exist for a whole floor. A thin resale market, so exits are slow. Currency, via the dirham’s dollar peg. And service charges, which are frequently not disclosed until late in a transaction.
If you’re looking
I’d rather tell you a floor is badly priced than sell it to you. If you want the numbers above run against real stock at real asking prices, including what I’d avoid and why, that’s a straightforward conversation.
If nothing on the market fits what you’re after, I’ll say that too.
WhatsApp me for a quick answer, or book a consultation if you’d rather go through it properly.
