ROI analysis of apartment in AG TOWER: DLD data and real deals

1. Definition of the area and data structure

Actual location: AG TOWER is located in Business Bay according to official DLD data, with Business Bay also being the master project.

A substantial amount of information is available in the DLD database:
– Sales database: 450 transactions for AG TOWER.
– Rentals: 2,238 contracts for AG TOWER found via the project name.
– For comparison, we use market data for Business Bay (studio), where the samples are large and statistically robust.

Filter by property type: the analysis is carried out for “Studio” (0BR) units according to DLD (rooms_en = ‘studio’, ejari_property_sub_type_en = ‘studio’).

2. Deal dynamics and liquidity

Transactions for AG TOWER (studio) occur every year, approximate figures:
– 2020: 46 deals, 2021: 28, 2022: 66, 2023: 38, 2024 (as of the analysis date): 32.
– The last 12 months are also characterized by stable demand.

Quarterly dynamics of the average price per m² for AG TOWER (studio):
– 2020: 17,200 – 15,200 AED/m² (decline by year-end).
– 2021: fluctuations in the 14,700 – 15,700 AED/m² range.
– 2022: an anomalous quarter with a drop to 10,700 AED/m², followed by a recovery to 14,130 AED/m².
– 2023: stabilization and growth to 15,100–14,300 AED/m².
– 2024: growth to 17,100–15,600 AED/m².
– Overall, over 4 years the liquidity profile is stable, with no crisis-level slumps.

For comparison, Business Bay (studio):
– Average price per m² in 2020: 22,200–25,350 AED/m².
– 2021–2022: decline and stabilization at 18,000–22,600 AED/m².
– 2023–2024: dynamic growth to 28,800 AED/m².

AG TOWER consistently trades at a substantial discount to the area average for studios (on average 30–40% cheaper).

3. Averages over the last 12 months

AG TOWER Studio:
– Average transaction price per m² over 12 months: 17,150 AED/m² (building level, 0BR);

Business Bay (studio):
– Average transaction price per m² over 12 months: 28,135 AED/m² (area level, 0BR).

Rent over the last 12 months:
– AG TOWER (studio): average rate 1,311 AED/m²/year (building level, 152 deals);
– Business Bay (studio): average rate 1,615 AED/m²/year (area level, 3,711 contracts).

4. Rental rate dynamics

AG TOWER:
– 2022: growth from ~890 to 1,052 AED/m²/year.
– 2023: gradual growth to 1,202 AED/m²/year.
– 2024: 1,195–1,285 AED/m²/year, with further upward trend still in place.
– Rental dynamics are confirmed by a large contract base (dozens of deals per quarter).

Business Bay:
– 2020–2022: growth from ~870 to 1,207 AED/m²/year.
– 2023: jump to 1,395, then above 1,500 AED/m²/year.
– The current level for studios in the area is higher than in AG TOWER.

5. Building vs area comparison, yield and “fair value”

– AG TOWER is significantly cheaper than the average studio unit in Business Bay (difference ~36%).
– The rental rate in AG TOWER is ~19% below the area average for studios, but the gap in sale prices is much wider.
– ROI_brutto (building level, studios): 1,311 / 17,150 = 7.6% per annum.
– ROI_brutto for the area (studios): 1,615 / 28,135 = 5.7% per annum.

Adjustment to ROI_net (operating expenses ~7%): for AG TOWER: approximately 7.0–7.1% per annum; for the area ~5.3%.

Indicative range of “fair investment price” for a 7–8% yield:
– For AG TOWER: 16,400 – 18,700 AED/m² (based on actual rents; the building is already trading within this model).
– For the area: 20,200 – 23,100 AED/m² (based on the area’s average rent; the actual market is higher, so a discount may be required to reach the target yield).

6. Conclusions on liquidity and outlook

– AG TOWER is one of the most liquid studio buildings in Business Bay, with regular transactions and a strong tenant inflow.
– The building consistently trades at a substantial discount to the area, enabling higher yields when buying “at market”.
– Price and rental dynamics are positive: both indicators have been growing since 2022, with no signs of stagnation.
– Average figures for the building allow investors to achieve a 7%+ target yield when buying at market, whereas in the wider area yield on new investments is declining due to price growth.
– For a conservative investor, AG TOWER looks attractive at current price and rent levels, with the strategy focused on rapid occupancy driven by a larger discount versus the area.

7. Key parameters for charts