1. Definition of the area and data structure
Actual location: according to DLD, THE PALM TOWER is located in the Palm Jumeirah district and belongs to the Palm Jumeirah master project. The analysis will focus on two-bedroom apartments (2BR) in THE PALM TOWER. Comparative data has also been collected for the entire Palm Jumeirah area.
2. Liquidity assessment
Over the entire observation period, 12 sale transactions for 2-bedroom apartments (2BR) have been recorded in THE PALM TOWER. Over the last 12 months, there have been no recorded 2BR transactions in this building, which indicates very low liquidity for this specific unit type in the current period (while the building as a whole has seen 557 transactions over all time).
Across Palm Jumeirah as a whole, hundreds of transactions for comparable apartment types have been recorded over the last 12 months — the area is one of the most liquid in the luxury and upper-upscale segment.
3. Purchase price dynamics
The transaction history for 2-bedroom apartments in THE PALM TOWER shows a wide dispersion of prices depending on the period:
– In 2020–2021, transactions were concluded at 38–44 thousand AED per m², followed by a peak in 2022–2023 at 61–62 thousand AED per m².
– In 2024, based on the available sales, the average price per m² declined to around 29.4 thousand AED per m² (3 transactions).
Across Palm Jumeirah, the average price per m² for 2BR units increased from ~12–15 thousand AED in 2020–2021 to 25–29 thousand AED in 2023–2024. Thus, THE PALM TOWER had long been trading at a premium to the market average, but the recent decline in achieved prices stands out and calls for caution when using such benchmarks.
4. Rental market
For THE PALM TOWER, over the last 12 months there have been no recorded actual rental transactions specifically for 2-bedroom apartments (2BR). However, for the building as a whole (all apartment types combined) there is a substantial volume of concluded rental contracts (609 contracts in total), and the average annual rental rate in the building is approximately 2,594 AED per m².
In Palm Jumeirah, the average annual rent for apartments over the last 12 months is 1,569 AED per m². This indicates a significant rental income premium specifically in THE PALM TOWER.
5. Current price and yield levels (last 12 months)
– For 2BR units in THE PALM TOWER there have been no sales recorded in DLD over the last 12 months, so it is not possible to calculate a current average price per m² specifically for 2-bedroom apartments in this building for this period.
– Across Palm Jumeirah, the average price per m² for 2-bedroom apartments over the last 12 months is 31,290 AED.
– The rental rate for the entire THE PALM TOWER is 2,594 AED per m² per year (without breakdown by unit type).
– The rental rate for Palm Jumeirah is 1,569 AED per m² per year.
6. ROI calculation and investment yield analysis
– For the building (THE PALM TOWER, all unit types): brutto ROI = 2,594 / 31,290 ≈ 8.3%. Taking into account all transactional costs (approximately 7–8% on top of the purchase price), the adjusted net yield will be around 7.7–7.8%.
– For Palm Jumeirah overall: brutto ROI = 1,569 / 31,290 ≈ 5.0%.
Thus, the yield of THE PALM TOWER currently significantly exceeds the market average for Palm Jumeirah, reflecting a premium for this building, likely due to its status, management quality, and demand from high-end tenants.
7. Fair price range for an investor
With a target yield of 7–8% per annum, the fair price range for an investor in THE PALM TOWER (based on the building’s average rent) is:
– For 8% ROI: 2,594 / 0.08 ≈ 32,425 AED per m².
– For 7% ROI: 2,594 / 0.07 ≈ 37,057 AED per m².
The current average price level in the area (31,290 AED per m²) is close to this range, but the significant deviation of individual transactions in the building (especially the latest ones — around 29,400 AED per m²) indicates a current opportunity to buy with a yield closer to 8% and a potential advantage of THE PALM TOWER relative to the wider Palm Jumeirah market.
8. Outlook and investor conclusion
THE PALM TOWER remains one of the most premium assets in the area, with a high average rental rate and consistently strong demand across the building. At the same time, there have been no new transactions in the 2-bedroom segment over the past year — this points to limited supply or a closed internal owners’ market. Theoretical investment metrics appear attractive (above the Palm Jumeirah average), provided the rental income can be achieved in practice, but the potentially low liquidity in the 2BR segment must be taken into account.
As a long-term asset, the property is attractive; for a buy-to-let strategy, it is advisable to target an entry price not higher than 32–33 thousand AED per m² to secure the desired yield from the outset.
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