1. Definition of the area and data structure
Actual location: according to DLD data, the building MAG 318 belongs to the Business Bay area (value area_name_en), with Business Bay also being the master project. All area- and master-project-level analytics will be built relative to this segment.
2. Transaction activity and liquidity
For 2-bedroom apartments (2BR) in MAG 318 there has been a regular number of transactions almost every year since 2020. Over the past 12 months, new sales have taken place in the building, which indicates stable market activity and the presence of either primary or secondary demand. On the rental side, the building shows a high level of interest: more than 1,300 lease contracts have been recorded over the entire period, meaning the asset is in demand both for end‑use and for buy‑to‑let.
3. Price and rental dynamics
3.1. Sales price dynamics for MAG 318 (2BR):
– Since 2020, the average price for 2-bedroom units has fluctuated in the range from 11,700 to 23,500 AED/m² with periodic spikes.
– From mid‑2022 an upward trend emerged: in Q3 2023 the price moved above 20,000 AED/m², and over the last 12 months the average level for 2BR reached 22,854 AED/m².
– Across Business Bay (all apartments): the average price over 12 months amounted to 25,895 AED/m² — MAG 318 is selling slightly below the area benchmark for new transactions.
3.2. Rental rate dynamics (MAG 318):
– MAG 318 shows a confident increase in average rental rates: from 1,100 AED/m² in 2021 to 1,800+ AED/m² in 2024 (annual figures).
– Over the last 12 months, the average rental rate amounted to 1,749 AED/m² per year, which exceeds the area average (1,499 AED/m² over the last 12 months in Business Bay).
– Thus, MAG 318 as a standalone building provides an investment premium in rental yield relative to its surroundings.
4. “Building vs area” comparison
MAG 318 (2BR) sells at a 12% discount to the average price in Business Bay, while the rent per m² is 17% above the area level. This creates an attractive picture for an investor: an income premium with a discount to the area on entry price.
5. ROI and fair investment price range
Based on actual DLD data for the last 12 months:
– Average sales price (MAG 318, 2BR): 22,854 AED/m²
– Average rent (MAG 318): 1,749 AED/m² per year
– Calculated gross yield (brutto ROI): 7.7% per annum for the building
– For Business Bay (area): ROI = 1,499 / 25,895 ≈ 5.8% per annum
Taking into account transactional and related costs (entry ≈ 7–8% on top of the purchase price), the effective (net) yield for MAG 318 will be around 7.1–7.2% per annum at the current price and rental levels.
The “fair for an investor” price range per m² (based on a target yield of 7–8%) for MAG 318 is:
– At 8%: 1,749 / 0.08 = 21,860 AED/m²
– At 7%: 1,749 / 0.07 = 24,986 AED/m²
The current market price of MAG 318 (2BR) fits well within this range and even looks attractive relative to the wider area.
6. Investment outlook for the asset
The asset combines liquidity (a large number of sales and lease contracts), strong tenant demand, and a rental yield premium versus the area. The entry price is comparable to or slightly below the “fair” level (calculated for a 7–8% yield). Over a 3–5 year horizon, assuming this balance of demand and rents is maintained, one can expect stable occupancy and capital appreciation at or slightly above the market average. The probability of a yield decline is low even amid market fluctuations, as rental levels in MAG 318 consistently outperform the surrounding stock.
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