ROI analysis of apartment in Mercer House South Tower: DLD data and real deals — 12.12.2025

1. Definition of the area and data structure

Actual location: According to DLD, the MERCER HOUSE – SOUTH TOWER building belongs to the Al Thanyah Fifth district and the DMCC-EZ1 master project. For the analysis, all available transactions and contracts for this building over recent years were used, and for comparison — data for the wider district and the master project.

2. Liquidity and transaction volume

The DLD database records 237 sale transactions for MERCER HOUSE – SOUTH TOWER. For studio apartments (0BR), the main volume was concluded in Q3 and Q4 2024 (196 transactions, i.e. a clearly pronounced off-plan sales period), with minor activity extending into 2025. This indicates high liquidity at the project launch stage.

3. Price and rental dynamics (studios, 0BR)

Sales (studios, building):

— In MERCER HOUSE – SOUTH TOWER, the average price per sq.m in the studio segment over the last quarters was:
• 2024 Q3: 24,454 AED/sq.m
• 2024 Q4: 24,740 AED/sq.m
• 2025 Q3: 26,376 AED/sq.m
• 2025 Q4: 26,092 AED/sq.m

Sales (studios, district benchmark):

— In Al Thanyah Fifth, studio apartments have shown a sharp increase in average price per sq.m over the past few years:
• From ~10,100–11,000 AED/sq.m in 2020–2021,
• To 14,000–21,400 AED/sq.m in 2023,
• In 2024 Q3–Q4 — 22,700–24,400 AED/sq.m,
• 2025 Q3–Q4 — 20,600–21,400 AED/sq.m.

Studio rentals:

— There are currently no registered rental contracts for the building itself in DLD, which is typical for new off-plan assets.
— At the DMCC-EZ1 master-project level, more than 100 active rental contracts for studios are recorded.
— The average rental rate across the master project over the last 12 months is 1,391 AED/sq.m/year.
— A similar level for Al Thanyah Fifth is 1,413 AED/sq.m/year.

Rental dynamics (DMCC-EZ1 — studios):

— Rental rates in the master project have been rising in recent years:
• 2020–2021: 770–1,090 AED/sq.m/year,
• 2023: 1,060–1,230 AED/sq.m/year,
• 2024 Q3: 1,462 AED/sq.m/year,
• Last year: around 1,400 AED/sq.m/year.

4. Comparison of current levels and investment returns

— Average price per sq.m for a studio in MERCER HOUSE – SOUTH TOWER over the last 12 months: 26,187 AED/sq.m.
— In Al Thanyah Fifth: 22,202 AED/sq.m.
— Thus, the building is selling at a premium of about 18% versus the district average (justified by its status as a new development and strong launch-stage demand).

— There is no rental data for the building itself (no contracts), so the benchmark can only be taken at the district/master-project level: 1,391–1,413 AED/sq.m/year.

Gross ROI for studios in Al Thanyah Fifth:
— District level: 1,413 / 22,202 ≈ 6.4% per annum.
— MERCER HOUSE – SOUTH TOWER (at 26,187 AED/sq.m, assuming market-level district rents): 1,413 / 26,187 ≈ 5.4% per annum.

Net yield (including entry costs of ~7%):
— District: ~6.0% per annum.
— Building: ~5.0% per annum (based on average district rental rates for studios).

Fair price range for an investor targeting a 7–8% yield:
— At the current market rent in the district (1,413 AED/sq.m/year):
• Price for 8%: 1,413 / 0.08 ≈ 17,700 AED/sq.m
• Price for 7%: 1,413 / 0.07 ≈ 20,200 AED/sq.m
— The current actual price (26,200 AED/sq.m) is noticeably above this range, reflecting a purchase at a premium (off-plan effect, expectations of price growth by completion).

5. Conclusions on outlook and liquidity

— The asset demonstrates high liquidity at the start of sales and a substantial premium to the district’s average prices.
— Over the coming years, the district is expected to retain solid rental demand and further price growth potential in the studio segment, given the historical trend.
— However, nominal returns at current prices are compressed and stand at 5–5.5% gross per annum (based on comparison with market rents), which is below typical market benchmarks for new investment projects.
— To achieve a target yield of 7–8% per annum in this location, either additional rental growth or acquisition of a studio at a lower price (an 18–33% discount to current sales levels) is required.
— There is no actual rental data for the building; any yield estimates are based on market rental levels in the location (DMCC-EZ1 / Al Thanyah Fifth) for comparable assets.