ROI analysis of apartment in The Residences: DLD data and real deals

1. Definition of the area and data structure

Actual location: according to the DLD database, the building The Residences (without specification of block or additional designations) is attributed to the Al Thanyah Fifth area. There is no recorded data on a master project (field is empty).

Sales data structure:
– For 2-bedroom apartments (“2 b/r”) in The Residences, 27 transactions have been recorded.
– There is no rental data specifically for 2-bedroom apartments in The Residences, but there are numerous and up-to-date rental contracts for the building as a whole (232 transactions), which provides sufficient material for project-wide assessment.

2. Liquidity and transaction frequency

The Residences shows stable market liquidity, with individual transactions in almost every quarter over recent years:
– 2020–2024: on average from 1 to 6 transactions with 2-bedroom apartments per quarter, with peaks at the end of 2022 and throughout 2023.
– In total for the building over the last 4 years — at least 20 transactions, indicating solid demand for this apartment type among buyers and investors.

Rental liquidity:
– Across the entire The Residences project on the second line of Al Thanyah Fifth, 232 active rental contracts for all apartment types have been concluded in recent years.
– This indicates strong tenant demand for the property, which is important for assessing its investment prospects.

3. Price dynamics over 3–5 years. Comparison: building vs area

Purchase price (AED per m²):

Dynamics of the average price per m² in The Residences (2-bedroom apartments):
– Quarterly dynamics have been volatile: in 2020 — 14,000; in 2021 — around 16,400; a local low at the beginning of 2022 — around 12,900; then recovery and a gradual, steady increase to 19,100–21,200 by the last quarters of 2024.
– Growth has been particularly pronounced since 2022, which broadly aligns with overall Dubai market trends.

Dynamics for Al Thanyah Fifth (all apartments):
– The average price per m² in the area was significantly lower than in The Residences until 2022 (7,000–11,000), then saw a marked increase: in Q2 2023 — 16,600, followed by 19,600–20,800 in 2024–2025.
– Thus, The Residences has historically traded at a premium to the area, but the gap has now narrowed: in 2024 the average price for the building is 20,900, versus 19,800 for the area.

The distribution of unit sizes and prices in the building is tightly clustered: most 2-bedroom apartments have an area of 130–155 m², with a price range of 13,000 to 21,000 AED per m², with a few outliers above this range.

4. Rental rate dynamics, affordability and growth

Rental rates (AED per m² per year):

In The Residences, rents for the building as a whole (all apartments):
– 2020–2021: 850–1,400
– 2022: 940–1,100
– 2023: 1,000–1,210
– 2024 (most recent year): 1,260–1,580 AED/m²/year; the latest value over the past 12 months is 1,464.

For Al Thanyah Fifth:
– 2020: lower — 570–670
– From 2022 a steady increase: 700–930
– In 2024 — 970–1,050, with the latest average at 976 AED/m²/year.

Accordingly, The Residences has been renting at a noticeably higher level than the area average throughout all periods and maintains this premium even against the backdrop of overall market growth.

5. Average price and rent over the last 12 months. ROI and fair value

Average figures for the last 12 months:
– Average purchase price per m² in The Residences (all apartments): 20,864 AED
– In the area: 19,825 AED
– Average annual rent in the building: 1,464 AED/m²
– In the area: 976 AED/m² (assessed separately for comparison)

Yield calculation (ROI, rough DLD-based approach):

For The Residences:
– Gross yield: 1,464 / 20,864 ≈ 7.0% per annum (excluding expenses)
– After discounting for 7% acquisition costs: 1,464 / (20,864 * 1.07) ≈ 6.5% net

For the area:
– Gross yield: 976 / 19,825 ≈ 4.9%
– Net yield: 976 / (19,825 * 1.07) ≈ 4.6%

Assessment of a fair price range for a target yield of 7–8% per annum (based on DLD data, not listings):
– For the building: given the average rent, the investment fair-value range is 18,300 to 20,900 per m². The current market price is close to the upper bound, meaning the apartment is being sold with only a minimal discount to the “investment comfort” level.
– For the area: the fair price is 12,200–14,000 per m². This suggests that average transactions in the area are currently taking place at a premium to the income-based valuation, and an investor will either need a substantial discount or must rely on further price growth.

6. Conclusions on prospects

– The Residences is a property with stable demand, high transaction transparency and attractive rental market metrics.
– From an income-based perspective, the building sits at the threshold of investment appeal (7% gross, 6.5% net), while the average figure for the area is significantly lower (4.6–4.9%).
– For a strategy targeting a 7–8% annual yield, current market prices for new acquisitions do not provide a substantial yield buffer — it may be necessary to negotiate individual discounts or focus on units with stronger rental growth potential.
– Both sales and rental liquidity are high. The outlook for moderate capital appreciation over a 3–5 year horizon remains positive, assuming a favorable market environment.