1. Definition of the area and data structure
Actual location:
According to DLD, the building The Diplomat Residences (name matches exactly) is located in the Al Yelayiss 2 district and belongs to the TOWN SQUARE master project. All further comparative indicators are based on this district and master project, using verified data from the DLD system.
Volume and structure of the database:
There are 259 recorded sales for the building (all apartment types). For rentals, 84 unique lease contracts have been recorded for this project; there is also separate data for studios (0 BR).
2. Liquidity and transaction frequency
Sales dynamics:
– The main wave of transactions for the building occurred in 2023 (peak — 102 deals in Q1 2023).
– In 2024, sales data is available for Q2 and Q3 (3 deals per quarter), with activity noticeably reduced.
– A significant number of registrations fall into future periods (2025 and 2026), which is related to the policy of finalising off-plan units — these periods were not included when analysing current trends.
Rental transactions are present: the building has formed its own rental track record, both for the entire building and specifically for studios.
3. Dynamics and levels of purchase prices
Average price per m² for The Diplomat Residences (history, completed periods only):
– In 2023, the average price per m² was in the range of 11,200–11,300 AED/m².
– In 2024, quarterly values show a spread (from 8,130 to 12,430 AED/m²). The 2024 deal pool is already limited in terms of the number of transactions, so individual deviations are possible.
– Over the last 12 months, the average transaction price has been 13,221 AED/m² (for the building).
– For comparison: the average price in Al Yelayiss 2 over the last 12 months is 13,790 AED/m².
Comparison with the district:
– Until mid-2023, prices in the district were slightly lower (8,300–11,600 AED/m²). During 2024 and over the latest 12‑month window, the gap between the average level of the building and the district is minimal: the indicators are almost identical, which indicates a high degree of synchronisation between the asset and its area.
4. Dynamics and levels of rental rates
Average annual rental rate per m², confirmed by active DLD contracts:
– Over the last 12 months, the average rate for the building is 1,128 AED/m².
– For Al Yelayiss 2, it is 900 AED/m² for the same period.
By individual apartment types:
– For studios (0BR) in The Diplomat Residences, the average rent over the last 12 months reaches 1,388 AED/m² — noticeably higher than for the building as a whole. This indicates a higher relative yield for studios compared with larger formats.
Rental dynamics:
– During 2025 (up to and including Q1 2026), quarterly rental rates for the building are recorded in the range of 1,088–1,315 AED/m².
– For the district, there has been a stable, gradual increase in rental rates since 2022 (from 637 to 900+ AED/m²), reflecting the current trend of sustained demand and internal migration.
5. Comparison of the building with the district
– The Diplomat Residences significantly outperforms the district average in terms of yield, both by average rental rate and specifically for studios (approximately 25–40% above the district’s average rate).
– In terms of purchase price, the building is comparable to the district, which indicates a balanced entry price.
6. Current ROI and “fair” investment price
– Current gross ROI for the building (based on the latest 12‑month data): 1,128 / 13,221 ≈ 8.5% per annum.
– For the district: 900 / 13,790 ≈ 6.5% per annum.
– For studios in the building, ROI is even higher (1,388 / 13,221 ≈ 10.5% per annum).
– After accounting for entry costs (typically +7–8% to the purchase price: DLD fee, agency commission, registration, etc.), the net ROI for the building is estimated at 7.8–8% per annum. For the district — around 6% net.
“Fair” price range for a target yield of 7–8% per annum (based on DLD rental rates):
– For the building: 1,128 / 0.08 = 14,100 AED/m² (upper boundary of the investment range); 1,128 / 0.07 = 16,110 AED/m² (lower boundary of the range).
– The actual average transaction price for the building (13,221 AED/m²) lies below this corridor, so purchasing at current DLD levels can deliver the target ROI for investors without requiring a large discount.
– For the district, a similar corridor is 11,250–12,860 AED/m², which is slightly below the average market price in the district (13,790 AED/m²). Therefore, achieving a 7–8% annual yield here requires a modest discount to the market.
7. Overall assessment and conclusions for the investor
– The asset is characterised by high liquidity (259 sales, a solid rental history).
– Very strong yield for the mass segment (especially for studios), while the purchase price of the building is not overheated relative to the district.
– Price and rental dynamics for the building and the district are synchronised; no significant overheating or bubbles have been identified.
– The asset is attractive for an investor focused on current income and growth potential; a target net yield of around 8% per annum looks realistic, especially for studios.
– The prospects of TOWN SQUARE and Al Yelayiss 2 are supported by ongoing demand dynamics and rental growth over the last three years.
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