Property investment: UAE rental yields higher than New York, London

Dubai Silicon Oasis apartments provided the highest gross rental returns in Dubai at 9.5% in H1 2019

  
Photo used for representational purpose only. Rendering of Binghatti Crystals in Dubai Silicon Oasis. Image for illustrative purposes.

Photo used for representational purpose only. Rendering of Binghatti Crystals in Dubai Silicon Oasis. Image for illustrative purposes.

Binghatti/Handout via Thomson Reuters Zawya

UAE could be one of the most favourable places for property investments if rental yields is taken as a benchmark.

Landlords get higher rental yields, one of the most important considerations for mid to long-term investors from apartments in Dubai, and make profit by renting studios than large apartments, property portal Property Finder said in its Trends report.

The average rental yield in property hotspots such as London (2.7 percent), Hong Kong (2.4 percent), New York (2.9 percent) and Singapore (2.5 percent) hover in the low single digits while Dubai properties consistently offer over 7 percent gross returns on average, the report said.

Dubai Silicon Oasis apartments provided the highest gross rental returns in Dubai at 9.5 percent in H1 2019 compared to 9.2 percent a year ago. New communities such as Meydan and Damac Hills also offered gross rental yields at 9.3 percent and 8.9 percent, respectively. 

“Despite a sustained contraction in prices, Dubai still holds its own as an investment hotspot with attractive yields and new legislative initiatives to further entice investors and companies,” said Lynnette Abad, Director of Data & Research, Property Finder.

Yields in Abu Dhabi, Northern Emirates

Al Reef in Abu Dhabi leads in terms of offering the emirate's gross rental yields for both apartments and villas/townhouses at 8.5 percent and 6.7 percent, respectively.

According to the report, apartments in Al Ghadeer (8.3 percent) and Al Raha Beach (7.2 percent) also find favour with investors while villas and townhouses in Al Raha Gardens (5.7 percent) and Golf Gardens (5.5 percent) are also popular with those looking to make a rental income.

However, luxury communities such as Saadiyat Island and Yas Island are more targeted at end-users and, therefore, offer relatively lower rental yields in the UAE capital, the report said.

Apartments in Ajman’s Emirates City provided the UAE’s best gross rental yield at 11 percent.

Al Hamra Village in Ras Al Khaimah (9 percent) and Ajman Downtown (8 percent) also provided apartment buyers with robust rental returns. Meanwhile, villas in Ajman’s Al Mwaihat (6 percent), Al Hamra Village in RAK (5.2 percent) and Al Zahraa in Ajman (4.9 percent) rounded up the top 3 list of best gross returns.

(Writing by Seban Scaria; editing by Mily Chakrabarty)

(seban.scaria@refinitiv.com)

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© ZAWYA 2019


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