Commercial property abroad: shops, offices, warehouses

Commercial property is a different asset from a flat. The buyer is not a household but a business tenant, the lease is a negotiated contract rather than a standard form, and the income depends on one question: will the tenant keep paying? For residents of the EU who look abroad, commercial units can offer longer leases and fewer management calls, but they also bring larger tickets, tougher financing and less forgiving mistakes. This article explains the four main segments and what to check before buying. For the Dubai market specifically, see commercial property in Dubai for foreign investors.

The four segments

• Retail. High-street shops, units in shopping centres, supermarkets, retail parks. Income depends on footfall and on the tenant's turnover. Food and daily-needs tenants are generally steadier than fashion or leisure. A shop in a street that loses foot traffic can stay empty for a long time.
• Office. Demand follows employment, remote-work habits and the quality of the building. Older buildings far from public transport are the hardest to re-let. Offices usually need more capital spending to stay competitive.
• Logistics and warehouses. Driven by e-commerce and supply chains. Location near motorways, ports or large cities and the building specification (height, loading docks, power) matter more than design. Small units suit small investors; large distribution centres are institutional deals.
• Mixed-use. Shop or office on the ground floor with flats above. It spreads the risk between tenant types, but it also means two kinds of leases, two kinds of repairs and often a more complicated legal structure.

How yields differ, and how to read them

Yields differ by country, city, segment and, above all, by quality. Cushman & Wakefield reported in its DNA of Real Estate study for Q2 2026 that the average European prime office yield rose by 3 basis points to 5.39%, and that compression had ended. That figure describes prime buildings in the best locations. A small, older or secondary-location unit usually trades at a higher yield precisely because it carries more risk. We did not find comparable current averages for retail and logistics in the same source, so we do not quote them. For current figures by city, read the quarterly market reports of the large brokers (CBRE, JLL, Colliers, Cushman & Wakefield, Savills) and check the date on each number.

A headline yield is also not a return. Subtract vacancy periods, letting fees, repairs the lease leaves with the landlord, taxes and your own financing cost. Our total cost of ownership article lists what to include.

Lease structures

The lease is the asset. Read it before the building.

• Gross and net. In a gross lease the landlord pays building costs (property tax, insurance, maintenance) out of the rent. In a net lease the tenant pays some or all of them; in a triple net lease the tenant bears property tax, insurance and maintenance. Net leases give a more predictable income for the owner but are not available everywhere on the same terms, and local law may limit what can be passed to the tenant.
• Length and the weighted average unexpired lease term. A ten-year lease with a strong tenant is worth more than a three-year one. Ask how many years remain, not only how long the lease was when signed.
• Indexation. Many leases adjust rent by a consumer-price index or by fixed steps. Check the index, the cap, the date and whether rent can fall.
• Break clauses. A tenant's right to leave after, say, five years makes a ten-year lease effectively a five-year one. Check who may break, when, with what notice and with what penalty.
• Rent-free periods and incentives. A seller may quote the full rent while the tenant is still in a rent-free period. Ask for the rent actually being paid.
• Security. Deposit or bank guarantee, and whether a parent company stands behind the tenant.
• Renewal and termination rights. Some countries give business tenants statutory renewal rights or limits on termination. This is local law and should be checked by a local lawyer.

Tenant covenant and vacancy risk

The covenant is the tenant's ability to pay. A national chain or a public body is not the same risk as a start-up on a two-year lease. Ask for the tenant's recent accounts, payment history and the guarantees offered. Then ask the uncomfortable question: if this tenant left in a year, what would the unit re-let for, how long would it take and who would pay for the refit? A single-tenant building is only as safe as that one tenant. A multi-tenant building spreads the risk but needs active management; see property management for remote owners.

Financing differences

Commercial loans are generally underwritten on the property and the lease, not only on your salary. Banks often ask for a larger deposit, shorter terms and higher margins than for a home loan, and they look at the lease length, the tenant and the building. Lending to non-residents adds its own conditions; see mortgages for non-residents. We cannot give typical loan-to-value ratios or rates without a current bank quote.

Legal due diligence

• Title and charges. Who owns the unit, and are there mortgages, liens or pre-emption rights?
• Permitted use. A shop cannot always become a restaurant, and an office cannot always become a flat. Check the permit and the planning status, not the seller's description.
• Lease documents. Every lease, amendment and side letter, plus the rent roll and arrears.
• Building condition and compliance. Fire safety, energy certificate, structural reports, environmental issues for industrial plots.
• Service charges and shared costs, especially in shopping centres and multi-owner buildings.
• Tax. Whether VAT applies to the purchase or to the rent, transfer tax and the tax on rental income differ by country. See annual property tax and bills by country and buying through a company or personally.

Use the general pre-purchase checklist as the base and add the commercial items above. For a comparison with hotels and flats, see hotel vs apartment vs commercial property.

FAQ

Is commercial property better than a flat for an investor? Neither is better in general. Commercial property can offer longer leases and tenants who pay costs, but with larger tickets, vacancy that can last months and a more demanding purchase process. Which suits you depends on budget, time and risk tolerance.

What is the difference between triple net and gross rent? In a gross lease the landlord covers building costs from the rent; in a triple net lease the tenant pays property tax, insurance and maintenance. Net rent is easier to forecast, but check what local law allows.

How much vacancy should I plan for? There is no safe universal figure. Ask for the unit's own letting history and for the local broker's vacancy data, then test your numbers with a long empty period.

Can I buy through a company? In many countries yes, and for commercial property it is common, but the tax result depends on your residence and the country. Take advice from a tax adviser before choosing.

Do small commercial units make sense? They can, but a small unit in a secondary street is a more exposed asset than a prime building. Look at the tenant, the lease length and the resale market.

How we help

We are a trilingual platform that finds properties and coordinates independent local lawyers and tax advisers. We do not sell commercial units ourselves. This text is informational only and is not legal, tax or investment advice; rules and market figures change, so verify current rules and numbers with qualified local professionals before you buy.