ROI analysis of apartment in RIAH TOWERS: DLD data and real deals

1. Definition of the area and data structure

Actual location: According to DLD, RIAH TOWERS is located in the Al Jadaf area, within the Jaddaf Waterfront master project. The DLD database records both sales and a large number of rental contracts for this property, which allows for detailed analysis and comparison of the building’s performance with that of the wider area.

2. Structure of the sales and rental market

Since 2020, more than 100 transactions have been registered for 2-bedroom apartments (2 b/r) in RIAH TOWERS. On the rental side, there have been over 450 contracts for residential units in the building. This indicates high liquidity: the property is actively both bought and rented out.

3. Dynamics and level of sale prices

Over the past few years, the average price of 2-bedroom apartments in RIAH TOWERS has fluctuated significantly: the largest number of deals falls in 2021–2023, with quarterly averages ranging from 6,550 to 9,770 AED/m². Over the last 12 months, the average transaction price for 2-bedroom apartments in the building amounted to 8,331 AED/m².

For comparison, the average price for apartments across Al Jadaf over the last 12 months is substantially higher at 19,556 AED/m². This points to a significant price gap: units in RIAH TOWERS trade at a large discount to the area average, which may be driven by rising prices in new projects, the specific characteristics of the building itself, its segment, or the condition and quality of finishes.

4. Dynamics and level of rents

For rentals, the average rate in the building over the last 12 months (for residential units, without breakdown by apartment type) was 757 AED/m²/year. This is below the average rate in Al Jadaf, where the comparable figure is 967 AED/m²/year. By year and by quarter, the building shows a steady increase in rental rates and solid demand dynamics: around 450–500 rental contracts, with rental growth particularly evident from 2023 onwards (636–743 AED/m²/year in 2024). The area-wide level is also growing steadily, but remains higher than in RIAH TOWERS.

5. Yield (ROI) and fair value analysis

Building-level ROI (last 12 months): 757/8,331 ≈ 0.091, i.e. around 9.1% gross per annum for the owner of a 2-bedroom unit purchased at the current market price (based on average calculated values from actual sales and rentals). Area-level ROI (Al Jadaf): 967/19,556 ≈ 0.049, i.e. about 4.9% gross (average for apartments in the area).

Adjusting for transaction and associated entry costs (~7–8%): effective yield (net ROI) for the building decreases to ≈ 8.4–8.5%. For the area, it falls to about 4.5–4.6%.

At a target yield of 7–8% per annum, the fair price range for an investor focused on this level of return at current rents for the building is 9,463–10,814 AED/m² (i.e. building rent_psm/0.08 to rent_psm/0.07), which is above the current average market price based on actual transactions in the building. This confirms that current deal levels in RIAH TOWERS provide potentially very high returns, making the building attractive specifically from a yield perspective. For Al Jadaf, the fair price range for a 7–8% yield is 12,086–13,813 AED/m², which is below the current market: to reach such yields in the area, either rents must grow significantly or sale prices must be discounted.

6. Investor outlook and liquidity

RIAH TOWERS consistently attracts tenant demand (450 contracts and rising rents), while sale prices are significantly below the area average (around a 40% discount), yet it delivers above-market returns for investors (9.1% gross versus 4.9% for the area). This makes the building an appealing entry point for sourcing high-yield units, especially against the backdrop of rising rental rates in Al Jadaf and the relative affordability of the property itself. The 3–5 year outlook will largely depend on the pace of rental growth and any narrowing of the gap with new supply in the area.

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