ROI analysis of apartment in WADI TOWER: DLD data and real deals

1. Definition of the area and data structure

Actual location: according to DLD, WADI TOWER is located in Wadi Al Safa 4 and belongs to the City Of Arabia master project.
The following analysis is based on all transactions and lease contracts identified for this building and the corresponding area.

Sample size: for sales of two-bedroom apartments (2 b/r), 14 transactions have been recorded over recent years; for rental contracts specifically for 2-bedroom units there is no separate data, however 57 annual lease contracts have been registered for the building as a whole over recent years.

2. Liquidity assessment and sales dynamics

In 2023–2025, regular transactions for the purchase of 2-bedroom apartments took place in WADI TOWER:
– 2023: 3 transactions,
– 2024: 9 transactions (as of the analysis date),
– 2025: 2 transactions (the dataset includes the current and future year – it is correct to focus on completed quarters and the current year).

Over the last four quarters, the average sale price of a 2-bedroom apartment was:
– Q4 2023: 7,239 AED/m²
– Q1 2024: 7,908 AED/m²
– Q2 2024: 6,585 AED/m²
– Q3 2024: 8,264 AED/m²

The average price of 2-bedroom apartments over the last 12 months was about 5,586 AED/m² in the building, which is noticeably below the area average (Wadi Al Safa 4), where the average for a similar unit type reached 19,739 AED/m² over the same period.

The size range of 2-bedroom apartments in WADI TOWER varies from approximately 67 to 134 m². Transaction values ranged from 492,145 to 1,518,480 AED, reflecting options in standard sizes and price levels for the units.

3. Rental market dynamics and structure

No linked contracts were found specifically for rentals of 2-bedroom apartments, but for the building as a whole there are enough annual lease contracts to obtain statistics for both the building and the area.

The average annual rental rate in the building over the last 12 months is 570 AED/m². The same rate is observed for Wadi Al Safa 4 as a whole, which indicates a very similar rental level for WADI TOWER and its surroundings.

Rental dynamics for 2022–2024 for the building:
– At the beginning of 2022, rents were 280–335 AED/m²,
– By 2023, the rate had risen to ~410–458 AED/m²,
– Over the last four quarters, rents have stabilised in the 510–575 AED/m² range.

This indicates solid growth in demand and increasing yields – the most recent results (2024) show growth of 20–30% compared to 2022 levels.

4. Comparison with the area and calculation of investment yield

WADI TOWER shows average purchase prices more than three times lower than the area average (5,586 vs 19,739 AED/m²).

The rental rate for the building and the area is almost identical at 570 AED/m², which allows a direct comparison of gross yields:
– Gross ROI for WADI TOWER: 570 / 5,586 ≈ 10.2%
– Gross ROI for the area: 570 / 19,739 ≈ 2.89%

Adjusting for actual transaction costs (DLD fee, broker, registration – in total +7%) gives an indicative net yield for the building of around 9.5%.

The “investment fair price” at a target yield of 7–8% per annum based on market rent is:
– Lower bound (8% yield): 570 / 0.08 ≈ 7,125 AED/m²,
– Upper bound (7% yield): 570 / 0.07 ≈ 8,143 AED/m².

The current average price in the building over the last 12 months (5,586 AED/m²) is significantly below this “fair range”. This may indicate strong undervaluation relative to potential yield, or certain specific features of the building itself (age, quality, reputation, services, tenant profile).

5. Conclusions and outlook

• WADI TOWER can be classified as a liquid “rental building”: transactions are stable, rental rates have been growing over the last 2 years, and the volume of contracts is sufficient to draw confident conclusions on pricing and yields.
• The building trades at a noticeable discount to the area on a price per m² basis. Rents in the building and the area are identical, meaning yields here are clearly higher than the area average.
• A gross ROI above 10% is an exceptional figure for today’s Dubai market, confirmed by actual transactions. After accounting for transaction costs, net yield is estimated at around 9.5%.
• For an investor, WADI TOWER is a way to achieve maximum rental yield in the Wadi Al Safa 4 market, but it is essential to factor in the building quality, tenant turnover and the reasons why the price gap with the area is so large.

Recommendation: the current market for WADI TOWER looks very attractive in terms of yield, but requires mandatory technical and legal due diligence of the building. For income-focused investments targeting stable rental cash flow and potential capital appreciation (if the area continues to develop), this option deserves close consideration.