ROI analysis of apartment in PARAMOUNT TOWER HOTEL & RESIDENCES: DLD data and real deals

1. Definition of the area and data structure

Actual location: According to DLD, PARAMOUNT TOWER HOTEL & RESIDENCES is located in the Business Bay (Dubai) district, with no master project specified (empty value). All further benchmarks and comparisons are made relative to this district.

The DLD database contains a substantial volume of information on sales and rentals for this building and the surrounding area, which makes it possible to carry out a full quantitative analysis both for the building itself and for the Business Bay market for 1-bedroom apartments.

2. Transactions and liquidity

Over the entire period, the DLD database records 107 transactions for 1-bedroom apartments (1BR) in PARAMOUNT TOWER HOTEL & RESIDENCES. Sales have been registered since 2020, with activity visible every quarter, which indicates stable demand and high liquidity of the asset. At the Business Bay district level, the volume of transactions for 1-bedroom apartments is even higher, confirming the attractiveness of the broader market base.

Rental activity in the building is also high: over the past 12 months, 259 lease contracts have been concluded for the property (without breakdown by apartment type), which is one of the highest figures in this segment.

3. Sale price dynamics for 1-bedroom apartments

The weighted average price per square meter in PARAMOUNT TOWER HOTEL & RESIDENCES for 1BR units over the past 12 months amounted to 22,433 AED/m².
For Business Bay, the comparable figure is 24,785 AED/m², meaning the building is positioned slightly in the lower part of the market spectrum (around 9% cheaper than the district average).

Price dynamics for the building:
– In 2020–2021, the price per m² in the building was in the range of 17,000–20,000 AED.
– In 2022–2023, the average price rose to 19,000–25,000 AED/m².
– Since the beginning of 2024, average values have increased to 20,000–22,300 AED/m².
— For Business Bay, growth has been even more pronounced: from 14,000–16,000 AED/m² three to four years ago to the current 23,000–25,000 AED/m² (and higher outside this building).

Thus, the pace of price growth in the building significantly lags behind the average dynamics in the district. There is no price premium to the district for this asset, which makes it attractive for end-users or investors seeking to buy a liquid asset at a discount to the wider Business Bay market.

4. Rentals: levels and dynamics

The average annual rental rate in PARAMOUNT TOWER HOTEL & RESIDENCES over the past 12 months for all residential apartments is 1,531 AED/m²/year.
For Business Bay, this figure is slightly lower at 1,336 AED/m²/year (approximately 15% below the building level).

Rental dynamics for the building:
– In 2022, rental rates for residential units in the building increased from 960–1,200 AED/m² to 1,230–1,470 AED/m² in 2023–2024.
— In the last two quarters of 2024, rents stabilized at 1,450–1,480 AED/m².
– In Business Bay, the average rent reached 1,160–1,250 AED/m² for 2024.

Accordingly, the rent_psm parameter for the building is consistently above the district average, which is typically associated with premium characteristics of the complex: managed services, strong demand for short-term rentals, a relatively new stock, and a strong brand.

5. Price comparison and returns (ROI)

Calculated indicators based on DLD data for the last 12 months:

Parameters for 1-bedroom apartments, last 12 months:
– Average sale price per m² in the building: 22,433 AED/m²
– Average rent per m² in the building: 1,531 AED/m²/year

Estimated gross return (brutto ROI) for investment in a 1-bedroom apartment:
– For the building: 6.8% per annum (calculation: 1,531 / 22,433)
– For Business Bay overall: 5.4% per annum (1,336 / 24,785)

Adjustment to net ROI taking into account transaction costs (one-off entry load of ≈7–8%):
– Estimated net ROI for the building is 6.3–6.4% per annum.
– For Business Bay: around 5.0–5.1%.

Range of investment-fair prices to target a 7–8% annual return:
– For the current average rental levels in the building, the “fair” price range is 19,140–21,900 AED/m².
– Current market prices (based on actual transactions) are slightly above the range that would provide a net return of 7–8% per annum at the current average rent. However, with a small discount, or if one focuses on growth potential (rising short-term rates and the brand premium), a purchase can be justified.

6. Structure and rate profile

The building commands a rental premium relative to the district, while the price per square meter is slightly below the district average. This profile is often typical for branded residences, where strong rental liquidity compensates for relatively modest capital appreciation on the secondary market.

7. Final assessment

— PARAMOUNT TOWER HOTEL & RESIDENCES is an extremely liquid asset within Business Bay, with steady demand both for purchase and for rent, allowing investors to secure reliable and predictable returns through a stable tenant flow.
— The building is attractive for buyers focused on rental income and a buy-to-let strategy; the annual yield level is on average higher compared with the district.
— Due to the slower capital appreciation of the complex relative to the rest of the district, an investor may find a focus on short-term (holiday homes) tenants and a regular income stream particularly appealing.
— The 3–5 year outlook is moderately positive: rental demand is above average, and secondary market prices may show a gradual increase in line with the broader Business Bay market or remain stable against the backdrop of premium rental yields.