1. Area definition and data structure
Actual location: According to DLD, the J5 building is located in the Al Safouh First area, master project Sufouh Gardens. The project is identified as J5 (exact match in the database).
2. Liquidity and transaction frequency
Over the past 4 years, 46 sale transactions and 193 lease contracts have been registered for the J5 building. Sales activity increased noticeably in 2024 (13+7+2 transactions in Q2–Q3–Q4), indicating good market liquidity and solid buyer interest. A similar picture is seen in the rental market — 5–11 new lease contracts consistently every quarter, confirming stable tenant demand.
3. Sale price dynamics for the building and the area
The following average prices per square metre by quarter (AED/m²) have been recorded for J5:
– In 2023, prices ranged from 10,183 to 18,124 AED/m².
– In 2024, there is a steady upward trend: Q2 – 13,449 AED/m², Q3 – 13,045 AED/m², Q4 — a peak of 14,763 AED/m².
Over the last 12 months, the average transaction price for J5 was 15,130 AED/m².
For comparison, in Al Safouh First the average price per m² over the last 12 months was 19,179 AED/m². The area is significantly more expensive, and J5 is trading well below the area average (by roughly 21%).
Price dynamics across the area are more volatile due to the heterogeneous stock: quarterly values for Al Safouh First in recent years have ranged from 11,000 to 33,000 AED/m².
4. Rental dynamics and rate ranges
For the J5 building, the average annual rental rate per m² over the last 12 months is 1,123 AED/m².
In the Al Safouh First market, the rate is lower: 945 AED/m². Thus, J5 rents at almost a 19% premium to the area average.
Rental growth has been evident since late 2022: from 835–950 AED/m² up to 1,050–1,170 AED/m² in 2023–2024. The most recent quarterly figure (Q2 2024) is 1,118 AED/m².
By apartment type (entire period):
– 1 bedroom: average rent about 999 AED/m² (96 contracts)
– 2 bedrooms: 802 AED/m² (56 contracts)
– 3 bedrooms: 817 AED/m² (41 contracts)
We can conclude that one-bedroom units generate the highest income per square metre, while 2–3 bedroom units rent at a noticeably lower rate.
5. Price vs rent comparison. ROI and investment scenarios
– For the J5 building:
– Average sale price: 15,130 AED/m² (last 12 months)
– Average rent: 1,123 AED/m² (last 12 months)
– Direct yield calculation: ROI_brutto ≈ 1,123 / 15,130 ≈ 7.4% per annum.
– Taking into account initial acquisition costs (around 7–8%), the effective net yield ROI_net is ≈ 6.9–6.8% (given the rising entry price).
– For Al Safouh First:
– Average price: 19,179 AED/m²
– Average rent: 945 AED/m²
– ROI_brutto = 945 / 19,179 ≈ 4.9%, net ≈ 4.5–4.6%.
At current market levels, J5 looks significantly more attractive than the wider area in terms of yield.
For an investor targeting a 7–8% annual return, the fair price range for J5 is:
– At a rental rate of 1,123 AED/m²: 14,040–16,043 AED/m² (corresponding to a 7–8% ROI).
The current average for J5 (15,130 AED/m²) sits in the middle of this investment-fair range.
For Al Safouh First, a fair price level for a 7–8% ROI would be 11,800–13,500 AED/m² — well below the current average transaction prices, which indicates clearly inflated values compared with the income-based price for a rental investor.
6. Conclusions and outlook
The J5 building is characterised by:
– Good liquidity in both sales and rentals, with ongoing market activity.
– Moderate but consistent price growth over the last 12–24 months.
– Rental rates significantly above the area average, providing an attractive yield level for investors (7–7.5% gross).
– Purchase prices that are aligned with achieving a 7–8% return at a moderate risk level.
The wider Al Safouh First area looks less profitable in terms of price-to-rent: where the average rental rate is lower (945 AED/m²) and purchase prices are substantially higher (19,179 AED/m²), an investor would need a significant discount to reach the target yield.
For an investor, J5 is more advantageous than an average apartment in the area: yields are higher, rental demand is stable, and both sales and leasing markets are well developed.
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