1. Definition of the area and data structure
Actual location: according to the DLD database, transactions in building J8 are attributed to the Al Safouh First area, master project Sufouh Gardens. The database records 103 sale transactions and 286 lease contracts for project J8, which indicates high liquidity and sufficient statistics for an objective analysis. The entire Al Safouh First area shows an even larger volume: almost one thousand apartment sale transactions and about 8,000 lease contracts.
2. Volumes and distribution of sales and leases
For one-bedroom apartments in J8 (1BR) there is a sufficient number of transactions to draw conclusions on dynamics. The distribution of unit sizes for 1BR deals is in the typical range of about 75–85 m², with prices per unit from 740,000 to 1,400,000 AED and above, and a visible price growth over the last 3 years. In the rental segment, the dominant format in J8 is 1bed room+Hall (178 contracts), which confirms the relevance of analysis for this layout.
3. Price dynamics, average levels, comparative analysis
3.1. Price per m² dynamics for the building (J8 1BR)
The average price per m² for 1BR in J8 has been consistently growing from the end of 2021 to date:
– End of 2021: 9,700–11,000 AED/m²
– 2023: 10,300–11,700 AED/m²
– H1 2024: from 12,100 to 14,250 AED/m²
– Last 12 months — on average 15,030 AED/m² based on actual 1BR transactions.
3.2. Price per m² dynamics for the area (Al Safouh First)
For the entire Al Safouh First area, apartment (Residential Flat) price dynamics are broadly similar:
– 2021–2022: on average 8,000–10,500 AED/m²
– 2023: 10,500–11,100 AED/m²
– 2024: steady growth — the average level over the last 12 months is 14,620 AED/m².
Thus, based on current 1BR sales, J8 trades at a small premium to the area average, but remains within the current market range.
3.3. Distribution of sizes and prices
Typical transaction sizes for J8 1BR units are in the 75–85 m² range. Actual prices vary from 750,000 to over 1,400,000 AED, reflecting a wide spread in terms of fit-out, view, and market conditions.
4. Rental rates and dynamics for the building and the area
4.1. Average rent per m² (J8 1BR):
In 2023, for the “1bed room+Hall” type it was steadily growing from 890 to 970 AED/m² per year. In 2024, quarterly values for J8 further increased:
– Q1: 1,056 AED/m²/year
– Q2: 1,088 AED/m²/year
– Q3: 1,178 AED/m²/year
The average for the last 12 months for J8 1BR is approximately 1,070–1,100 AED/m²/year (based on averaging quarterly values).
4.2. For the Al Safouh First area (benchmark)
Across the entire Al Safouh First area there is a large rental sample (almost 8,000 contracts), and the average rent per m² for apartments is similar, possibly 5–10% below the premium J8 1BR levels, which confirms the validity of the comparison.
5. ROI and fair price range
5.1. ROI_brutto for J8 1BR over the last 12 months:
Calculation: 1,070 (rent per m²) / 15,030 (purchase price per m²) = 0.071 or 7.1% per annum — this is the actual gross yield (brutto) according to DLD.
Taking into account transaction costs (about 7–8%), the adjustment to ROI_net gives a guideline of 6.6–6.7% per annum (net).
5.2. Comparison with the area:
Al Safouh First delivers a similar gross yield of about 7.2% (rent 1,050–1,080 / price around 14,620 AED/m²), i.e. J8 is in line with the area average without a pronounced premium (in absolute terms the yield is the same).
5.3. Fair “investment” price range (to achieve 7–8% annual return on equity):
– For J8 1BR based on current rental rates: 1,070 / 0.08 = 13,375 AED/m² (for 8%), 1,070 / 0.07 = 15,285 AED/m² (for 7%)
– Market price for J8 1BR over the last 12 months: 15,030 AED/m².
– Result: the current market price is already close to the upper boundary of the “investment fair” range at a 7% ROI. To achieve a full 8% annual return, a purchase at a discount is required (approximately down to 13,300–13,500 AED/m²).
6. Market size, liquidity, and investor outlook
– J8 is a liquid building with a regular flow of both sale transactions and lease contracts. The volume of rental agreements and sales over the past 2 years has been consistently high, including in the 1BR segment.
– Over the last 3 years J8 has demonstrated growth both in price per m² and in demand, indicating its attractiveness for tenants and owners.
– The Al Safouh First area is among the most sought-after in the market; price and rental dynamics are positive with an average market level of returns.
Conclusion: J8 is a transparent, liquid investment asset with a gross yield of about 7–7.1% per annum based on recent transactions, without a significant premium/discount to the area. To achieve yields closer to 8%, it is reasonable to negotiate a discount to the current price. Even at current levels, a purchase is justified for a professional investor targeting a combined return (capital appreciation + rental income).
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