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Where investors can find the best rental yields in the UAE

Where investors can find the best rental yields in the UAE

Arabian Business, 12 March, 2019

UAE real estate continues to provide some of the highest returns in the world despite the downward trend experienced by prices and rents in 2018, according to Property Finder.

In a new report, the real estate website said the up-and-coming community of Arjan topped Dubai’s list with 12.4 percent gross returns while investor favourite International City improved to 10.1 percent from an already high 9.2 percent due to healthy demand from those migrating from other emirates.

These figures are based on active listing data on Property Finder, it said.

Among the villa and townhouse communities, Town Square offered the highest gross returns at 7.2 percent, followed by Mudon at 6.8 percent and Reem–Mira at 6.7 percent.

Rental yield is one of the most important considerations for mid to long-term investors, Property Finder said.

Lukman Hajje, chief commercial officer of Property Finder, said: “Typically, smaller properties produce better rental yields than larger ones. Apartments are better than villas, and studios are better than larger apartments, for example.

“But also consider location. Newer, emerging communities offer higher gross rental yields than more established communities but often have higher vacancy and lower capital growth potential,” Lukman added.

In Abu Dhabi, more affordable communities are outperforming the more expensive ones in terms of rental yields, the report showed.

Al Ghadeer apartments offers the highest gross rental yield of 8.3 percent in Abu Dhabi, followed by Al Reef at 8 percent and Al Reem Island at 7.1 percent.

In terms of villas and townhouses, Al Reef offers the best gross rental yield of 7.2 percent and Al Raha Gardens at 5.5 percent.

In the Northern Emirates, apartments in Ajman Downtown offer the highest gross rental yield at 8.5 percent, followed by Al Hamra Village in Ras Al Khaimah at 8 percent and Al Marjan Island in Ras Al Khaimah at 7.6 percent.