ROI analysis of apartment in MAJESTINE: DLD data and real deals

1. Definition of the area and data structure

Actual location: according to the DLD register, the MAJESTINE building is fully assigned to the Business Bay district and the Business Bay master project.

Data volume:
– For 2-bedroom apartments (2 b/r) in MAJESTINE, 33 sale transactions have been registered.
– For long-term rentals in MAJESTINE, there have been over 1,700 valid contracts across all unit types in recent years. However, with the filter set strictly to “2 bed rooms”, there are no recorded contracts with valid sizes and rates, although the overall rental statistics for the building are substantial.

2. Market analysis: sale transactions

Transaction dynamics:
– Sales of 2-bedroom units in MAJESTINE have been recorded from 2021 through the current year, with several transactions each year, indicating standard liquidity for this segment.
– At the Business Bay district level, the annual transaction volume is very high, confirming strong demand and high liquidity for this type of apartment.

Average prices per square metre (2 b/r apartments, MAJESTINE):
– From 2021 to 2024, the average price increased from 13,756 to 16,500 AED/m², followed by a correction to 15,600 AED/m² in Q2 2024.
– Over the last 12 months, the average transaction price for 2-bedroom apartments in MAJESTINE was 12,209 AED/m² (including all size types and only actual transactions).

Business Bay (residential apartments overall):
– The average price level in the district is consistently higher than in MAJESTINE. Over the last 12 months, the average price per m² was 25,935 AED/m².
– Over the past 4 years, the district has shown a clear, steady increase from 13–15k AED/m² (2020) to 25–26k AED/m² (2024).

Comparison of MAJESTINE with the district:
– 2-bedroom apartments in MAJESTINE are currently selling at almost half the district’s average price: MAJESTINE — 12,209 AED/m², Business Bay — 25,935 AED/m².
– This may be related to the building’s characteristics (age, fit-out quality, competitive supply within the pool of towers in the district), but formally, based on DLD data, this discount is statistically stable.

3. Market analysis: rentals

For rentals specifically in the “2 bed rooms” format in MAJESTINE, there are no valid contracts for the last year, but across the building as a whole there is a sufficiently dense flow of transactions.

Average annual rental rate for the building:
– Over the last 12 months, the average annual rental rate across MAJESTINE as a whole was 1,325 AED/m².
– Across Business Bay, the comparable figure was 1,337 AED/m².

Rental dynamics:
– MAJESTINE: since 2020, the average rental rate has increased by almost 1.7 times (from 800–900 to 1,250–1,320 AED/m²).
– In Business Bay, the growth has been even more pronounced: from 700–900 to 1,200–1,350 AED/m², with peak values reached in quarters after 2023.

4. ROI over the last 12 months and fair price range

Return calculation based on DLD:
– Gross ROI for MAJESTINE (entire building): 1,325 / 12,209 ≈ 10.8% per annum before expenses.
– For Business Bay: 1,337 / 25,935 ≈ 5.2% per annum.

Net yield (including transaction costs of ~7%):
– MAJESTINE: around 10.1%.
– Business Bay: around 4.9%.

Fair price range for an investment yield of 7–8% (MAJESTINE):
– For an 8% annual return: the fair investment price level is 16,560 AED/m².
– For a 7% return: 18,929 AED/m².
– The actual price in MAJESTINE is currently 25–35% below this “investment fair value zone”, meaning that, according to DLD data, a purchase corresponds to a gross yield above 10% per annum. By comparison, to achieve such ROI levels in Business Bay, district-wide apartments would have to be at least 40% cheaper.

5. Liquidity and outlook

– Transaction and rental volume: MAJESTINE is consistently sold and leased, with standard liquidity for the mid-price residential segment. In Business Bay, liquidity is among the highest in Dubai.
– Price dynamics: in the medium term (3–5 years), MAJESTINE has significantly lagged the district in terms of price growth, but rental rates are “catching up” with the wider market.
– For an investor, MAJESTINE is an asset with very high formal yield at the current price (based on DLD statistics), while at the district level the building is trading at a noticeable discount.

6. Conclusions

MAJESTINE (2-bedroom units and the building as a whole) currently offers a very attractive proposition for an investor:
– Transaction prices are significantly below the district average.
– Rental rates for the building and for the district are almost identical, despite the lower entry price.
– At current levels, MAJESTINE transaction prices provide a gross yield of 10–10.8% per annum, which exceeds standard expectations for UAE residential.
– Outlook: if rental rates continue converging with the district and there is no strong price pressure from new projects, capital appreciation for investments in MAJESTINE looks protected over a 3–5 year horizon (bearing in mind that a return of prices to the district average would narrow ROI).

Note: all yield estimates and “investment fair value” levels are based on actual DLD averages for the last 12 months. The comparison is made between MAJESTINE (entire building) and Business Bay (district), not individual apartments.