ROI analysis of apartment in AXIS RESIDENCES 8: DLD data and real deals

1. Definition of the area and data structure

Actual location: according to DLD, the AXIS RESIDENCES 8 building is located in the Nadd Hessa area within the Silicon Oasis master project. The database records 72 sale transactions for this building over the entire period, as well as 287 lease contracts for various apartment types.

2. Dynamics and level of apartment sale prices

For 2-bedroom apartments in AXIS RESIDENCES 8, no transaction data has been recorded in recent years, but for the building as a whole, deals are taking place on a regular basis. The average price per square meter for the entire building over the last 12 months was approximately AED 7,160. For comparison, the average level in Nadd Hessa is significantly higher at around AED 15,150 per sq.m over the same period. Over three years, price dynamics in the building have been volatile, but the main price range has remained within AED 5,000–7,000 per sq.m. Particular attention should be paid to the fact that the level in this building is substantially below the area benchmark, which may indicate its positioning and the level of demand for the asset.

The dynamics for Nadd Hessa in recent years show a steady upward trend: between 2021 and 2024, average prices increased from AED 6,000 to AED 13,000–15,000 per sq.m, with a sharp spike in recent months. In contrast, market prices in AXIS RESIDENCES 8 have remained in the lower segment of the area’s market.

3. Dynamics and level of rental rates

For AXIS RESIDENCES 8, the average rental rate over the last 12 months was approximately AED 725 per sq.m per year. This almost matches the area average of AED 737 per sq.m per year. Historical data shows stable, gradual growth: over the last 3 years, rental rates in the building have increased from AED 400–500 per sq.m to more than AED 700 per sq.m, which is in line with the overall area trend. The number of lease contracts concluded in the building is sufficiently high to draw confident conclusions; liquidity is confirmed.

4. Assessment of investment yield (ROI) and fair price

The ability to compare current purchase prices and rental levels makes it possible to estimate indicative investment yield (ROI):

– For the building, based on data for the last 12 months, the indicative gross yield is 10.1% per annum (725 / 7,160).
– Taking into account typical transaction-related costs (~7%), the expected net yield (ROI net) will be around 9.3% per annum.
– For the area, a similar indicator is lower at approximately 4.9% per annum (737 / 15,150), with net ROI in the area at about 4.5%.

Thus, AXIS RESIDENCES 8 currently offers a yield significantly above the area average, which is explained by the relatively low purchase price and sufficient rental demand in this segment.

If an investor targets a yield of 7–8% per annum, then the “fair” purchase price range at the current rental level is AED 9,063–10,357 per sq.m (725 / 0.08 and 725 / 0.07 respectively). The actual average transaction price is now about 20–25% below this range, which makes the asset attractive for income-focused strategies. At the same time, to achieve a similar yield based on the area’s rental level, the purchase price should not exceed AED 9,200–10,500 per sq.m, which is practically impossible at current area prices.

5. Liquidity and outlook

AXIS RESIDENCES 8 has a sufficient volume of both sale and rental transactions, which confirms its liquidity. Rental prices have almost doubled over 3 years, creating favorable conditions for yield growth. The building’s segment significantly lags behind the area average in terms of capital values, yet it retains a competitive advantage for tenants and income-focused investors. At the same time, its attractiveness for a pure capital-gain buyer is constrained by the lower “capitalisation” of its value relative to the area’s arithmetic mean.

Long-term outlook: if current trends in the Dubai Silicon Oasis and Nadd Hessa markets persist, the probability of a substantial decline in rental rates is low. There remains room for capital value growth in the building, especially if a “catch-up” effect towards the area price level materialises.