ROI analysis of apartment in Mercer House South Tower: DLD data and real deals — 11.12.2025

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 area and the DMCC-EZ1 master project. Sales of 1-bedroom apartments in this building are recorded in the database, whereas there are no rental contracts for the Mercer House project itself in the open rental data, which is typical for new or under-construction (off-plan) projects.

Database structure: The transaction volume for the building is significant (237 transactions), with most deals in 2024 and predominantly for 1-bedroom apartments. There are no 1-bedroom rental deals either for the building or for the DMCC-EZ1 master project — only at the Al Thanyah Fifth area level, which indicates that the complex itself is still at the off-plan stage: buyers have not yet put the units into operation and have not started renting them out.

2. Liquidity and demand

Over the last full quarter, more than 50 transactions for 1-bedroom apartments in the building were recorded. This indicates a high level of interest in the complex among buyers and investors at the launch stage. Liquidity is supported both by the developer and by the primary market. Later, after completion and handover, the focus will shift to the secondary market and rentals; however, at this point there are no rental contracts for MERCER HOUSE – SOUTH TOWER even in DLD’s contract data.

In the Al Thanyah Fifth area, tens of thousands of rental transactions are concluded annually (over 59,000 for residential properties alone), which points to very strong demand, a well-developed secondary rental market and a broad tenant pool.

3. Sales price dynamics

Quarter by quarter over the past year and a half, the average price per square metre for 1-bedroom apartments in MERCER HOUSE – SOUTH TOWER has ranged between 23,000–30,000 AED/m², with peaks around 30,000 AED/m² recorded in certain quarters. The data shows moderate fluctuations: the bulk of transactions in mid-2024 were in the 23,700–24,000 AED/m² range, some deals in early 2025 reached 28,900–30,400 AED/m², but then the level partially eased back to 22,900–23,700 AED/m² in some quarters. The average level for the last 12 months for the building is 27,045 AED/m².

For comparison, in the Al Thanyah Fifth area (same segment, 1-bedroom apartments) the average price per square metre over the last 12 months stands at 19,761 AED/m². Over the past 4 years, the area has gone through a phase of a twofold increase in market prices: from 8,500–12,000 AED/m² in 2020–2021 to 16,000–20,000 AED/m² by the end of 2023 and beyond.

Thus, current transactions in the building are closing with a substantial premium (approximately 37% above the area average), reflecting the project’s newness, its class and the level of demand at the off-plan stage.

4. Rental rates and yield

There are currently no rental transactions for the building itself or for the DMCC-EZ1 master project in the open DLD database. As a result, a direct estimate of the average market rent for 1-bedroom apartments in Mercer House is not possible — the building has not yet effectively entered the rental market.

Across Al Thanyah Fifth as a whole, the average annual rental rate for residential property over the last 12 months is about 1,084 AED/m². For the 1-bedroom segment this rate may be slightly higher in the future, but this cannot be reliably confirmed without actual contracts for the building or at least for this unit type at the area level.

5. Calculation of ROI (gross and net) and the fair price range

Since the rental rate is not defined for the specific building or master project, only the area’s average level can be used as a benchmark.

Gross ROI (for the area): around 5.5% per annum (1,084 / 19,761), if we take the average area transaction price over the last 12 months as the basis.
However, when purchasing units in MERCER HOUSE – SOUTH TOWER itself at an average price of 27,045 AED/m², the area rental rate translates into a yield of about 4.0% per annum (1,084 / 27,045).
Taking into account initial entry costs (around 7–8% of the purchase price), the effective (net) ROI for the area will be even lower — around 3.7% per annum when entering at the price level typical for recent transactions in the building.

The fair price range for an investor (if the target yield is 7–8%) based on the current area rental level is 13,550–15,485 AED/m². This is significantly below the current price level in the building (27,000 AED/m²), so to achieve a 7–8% ROI either higher rents or entry at a discount to current off-plan prices would be required. However, neither of these is guaranteed, and a real case for the building cannot be calculated until actual rental transactions appear.

6. Conclusions and outlook

MERCER HOUSE – SOUTH TOWER (Al Thanyah Fifth area) demonstrates a very high level of liquidity at the launch stage, as evidenced by dozens of 1-bedroom transactions per quarter. Prices are significantly ahead of the area’s average market levels and reflect strong demand among buyers for new developments.

The actual level of rental rates is still unknown: there is no data either for the building or for the master project, so any yield calculations should be treated as indicative and rather conservative. The current gap between off-plan entry prices and the average area rent points to low initial yields (around 4%), which is typical for new premium complexes at the start of the cycle and in periods of high speculative activity.

Future returns will depend on real tenant demand after handover and on the ability to rent above the area average, but it makes sense to rely only on confirmed market contracts for the building itself. In terms of liquidity and investment prospects, the building remains one of the most sought-after new projects in the area; however, for yield-focused investors it is important to factor in the high entry threshold.