Landlords in Dubai are willing to offer bigger commissions to property brokers to push their properties first to customers. This is a relatively new trend in the city but is picking up as demand for real estate has dipped over the past months.

"Landlords in Dubai are giving bigger incentives to their property agents to ensure brokers push their buildings first for rent," Porush Jhunjhunwala, Manager, Commercial Leasing at Better Homes, told Emirates Business.

"Unlike a few months ago, smart landlords are now compensating their brokers. The commissions can go up to five per cent of the contractual value. In addition, tenants are now asking for discounts on commissions, which are being paid by the landlord," he said.

However, there is no fixed percentage that brokers are charging property owners. According to Michael Michael, Director of Sales and Leasing, Landmark Properties: "Landlords are willing to pay the two per cent standard commission. On occasion, they may be flexible, however, it is all calculated losses on their behalf and every penny counts. We have witnessed a few transactions where the commission has been more than two per cent so they are definitely out there. It all depends on the circumstances of the individual," he said.

"For ready commercial properties for lease we are seeing more 'rent free' periods being offered to incentivise the tenant. This period will also have an impact on the length of the tenancy contract, therefore, committing the tenant to a longer period; something that could benefit either party at the end of the contract depending on the length," he said.

However, the commissions agents are getting in the city are still lower than what is offered in Western markets.

"The commissions paid in Dubai are much lower than what landlords pay in developed markets.

"In the West, property owners pay their commercial agents fees ranging from 17 per cent of the first year rental income or $5 (Dh18.36) per square foot, whichever is higher.

"In most matured markets both landlords and tenants pay one month rent each as broker's fee, which amounts to a total of 16.66 per cent of the rent to the broker.

In comparison, it was only five per cent commission here some time back, which was being foot by the tenant," said Jhunjhunwala.