Dubai’s International City is one of the top areas to watch for buy-to-let landlords who are looking for high returns on their investment, new data suggests.

The country-themed residential community in the Al Warsan region of Dubai offers a 10.6 percent gross rental yield, the best in the emirate, according to the ‘Property Finder Trends’ report.

During the second half of 2019, other areas that also offered high rental yields were Discovery Gardens (8.6 percent), Al Barsha (8 percent), Barsha Heights or Tecom (7.9 percent), Dubai Sports City (7.8 percent) and Jumeirah Village Circle (7.6 percent).

According to the analysis of Data Finder, the real estate data and insights platform under the Property Finder Group, newly completed villas or townhouses offer more yield opportunities compared to similar units in more established communities.

Within the segment, Town Square offers the highest gross rental yield at 7.6 percent, followed by Mudon at 7.3 percent, Reem at 6.4 percent and JVC at 6.3 percent.

In comparison, homes in more established areas like Arabian Ranches offered lower yields of 4.9 percent, Motor City (5.2 percent) and Barsha (5 percent).

Dubai’s properties offer over 7 percent gross returns on average according to the report, higher than other popular locations for property investment abroad, like London (2.9 percent), Hong Kong (2.35 percent), Sydney (2.85 percent), Singapore (3.3 percent) and Toronto (3.9 percent).

“Overall, rental yields in Dubai are still regarded as being some of the highest around the world. More mature communities such as Dubai Marina, Downtown Dubai and the Palm Jumeirah stand at 6.3 percent, 4.8 percent and 5.3 percent, respectively,” Lynnette Abad, Director of Data & Research at Property Finder said.

Rental yields in Abu Dhabi

In Abu Dhabi, the community of Al Reef offers the highest gross rental yield for apartments at 8.8 percent. Also sought after are apartments in Al Ghadeer, which offers a rental yield of 7.8 percent, as well as Yas Island, which offers 7.2 percent.

For villas and townhouses, the places to look for are Al Ghadeer, which offers a rental yield of 6.9 percent, Al Reef (6.4 percent) and Al Raha Beach (6.1 percent).

Gross rental yield is obtained by dividing the annual rent by the property’s purchase price and multiplying by 100. As a benchmark, a rental yield of 7 percent or more is considered very good, Property Finder said.

(Writing by Gerard Aoun; editing by Cleofe Maceda)

(Gerard.Aoun@refinitiv.om)

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