1. Definition of the area and data structure
Actual location: according to DLD, Lagoon Views at District One is located in the Al Merkadh area, within the master project Mohammed Bin Rashid AL Maktoum City – District -1 Community. The project is uniquely identified; there are no errors or duplicates in the data.
Scope of available information: the DLD database records 153 sale transactions for this building over recent years and 10 rental contracts over the past 12 months, which allows for a correct comparison with the wider Al Merkadh market, where the volume of deals and contracts is significantly higher.
2. Sales analysis (purchase)
Transaction dynamics and liquidity:
– The main wave of sales for the building falls in 2022 (100 transactions), after which volumes decline: 10 transactions in 2023, 20 in 2024, and sporadic activity of 3–20 deals in the following years (given the project phase, deferred transactions are possible).
– Liquidity at the Al Merkadh area level is very high: over the last 12 months there have been almost 4,000 apartment sales.
Price dynamics for the building:
– From 2022 to 2024, the average price per square meter has been steadily increasing: from 20,400–21,000 AED/m² (2022) to 22,700 AED/m² (summer 2024) and up to 26,500 AED/m² in some recent transactions.
– Over the past 12 months, the average purchase price in the building was 24,358 AED/m² (21 transactions).
– In recent quarters, the dynamics have been volatile, which may be due to heterogeneous layouts (from 21,500 to 26,500 AED/m²).
Comparison with the area:
– For Al Merkadh, the average price per m² over the last 12 months is 20,491 AED/m² (3,907 transactions), meaning Lagoon Views at District One trades at a premium of around 19% to the area’s average market level.
3. Rental analysis
Rental data for the building is limited, but sufficient to draw conclusions:
– Over the past 12 months, 10 apartment rental contracts have been registered in the building, with an average rental rate of 1,573 AED/m²/year.
– For comparison, in Al Merkadh over the same period the average rate is 1,525 AED/m²/year with a very large volume — more than 9,700 contracts.
– The building’s rental premium over the area is about 3%.
Rental rate dynamics:
– For the building: rental rates have been rising, currently in the 1,510–1,600 AED/m² range in recent quarters.
– For the area: a sharp increase over the last 2 years (from 850–1,100 AED/m² at the beginning of 2022 to 1,450–1,550 AED/m² in 2024); as of today the area is stable in the 1,450–1,600 AED/m² range.
4. Yield and calculation of the “fair” price
Actual yield (12 months, building level):
– Average purchase price in the building: 24,358 AED/m².
– Average annual rent: 1,573 AED/m².
– Gross yield (ROI_brutto): 6.5% for the building (above the area, where ROI_brutto is ~7.4%).
Adjustment for all entry costs (taxes, brokerage, registration — in total about 7% of the transaction amount):
– Effective net yield (ROI_net): around 6.0% for the building.
“Fair price” for an investor targeting a 7–8% yield:
– For this target ROI, with a rental rate of 1,573 AED/m², the “fair price range” for the building is from 19,663 to 22,471 AED/m².
– The current market price (24,358 AED/m²) is 8–24% above this range. For an investor targeting a 7–8% yield, the building requires a discount.
– For the area, a similar range is 19,063–21,786 AED/m² versus an actual average price of 20,491 AED/m² — here the alignment with the target investor yield is close to optimal.
5. Conclusions and prospects
– Lagoon Views at District One consistently trades at a premium to the area both in purchase prices and in rents, but its premium in rental rates is smaller than its premium in capital values, which means the yield is “more expensive” for a new investor.
– Liquidity is very high, demand is stable, and the area is growing both in prices and in rental rates.
– The pace of capital appreciation is higher for the building than on average for the area, but the “investment” appeal, if buying now, is lower than the area average (due to the high current price and the relatively modest rental uplift).
– For a long-term investor, area growth may support prices and rents over a 3–5 year horizon, but one should not expect to reach a 7–8% yield quickly at current entry prices for this building (exceptions are possible only for specific layouts or individual negotiations).
– The main opportunity for an investor: selecting projects in Al Merkadh that are closer to the average yield level (or waiting for a price correction/negotiated discount on this asset).
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