Commercial
A flat in the Marina might net you 5 or 6 percent. Commercial property in Dubai — staff accommodation, warehouses, whole buildings — regularly does twice that. It is more work and it is not for everyone, so here is exactly how it stacks up.
Bed-count businesses, not property in the usual sense. Income is beds × monthly rate × occupancy, and the rate is set by demand from contractors rather than by a rental index. Yields are the highest in the market — and so is the operating burden.
Typically 16–17% net
Priced per square foot per year and let on long leases to a single tenant. Lower yield than accommodation, far less management, and the tenant usually fits out at their own cost.
Typically 8–9% net
A residential block bought entire and let unit by unit. You own the service charge rather than pay it, which is where a lot of the return comes from.
Typically 7–8% net
Bought by the floor, let to businesses. Slower to fill than accommodation and more sensitive to the wider economy, but tenants stay longer and look after the space.
Typically 6–8% net
A worked example
This is our own underwriting model, run with the numbers below. Change any of them and the answer changes — which is the point of showing you the inputs.
| What we assumed | Value |
|---|---|
| Beds | 1,200 |
| Rate per bed, per month | AED 375 |
| Occupancy assumed | 92% |
| Running costs assumed | 15% of income |
| What it produces | Amount |
|---|---|
| Gross annual income | AED 4,968,000 |
| Less running costs | AED 745,200 |
| Net operating income | AED 4,222,800 |
| Purchase price | AED 25,000,000 |
| Agency fee (4%) | AED 1,000,000 |
| Net yield | 16.9% |
Why it is so much higher than a flat. You are buying an operating business, not just a building. The income depends on keeping beds full and the place properly run — if occupancy drops to 70% that 16.9% becomes about 12.5%. That sensitivity is the trade for the yield, and it is why we model occupancy explicitly rather than assuming it.
What we check
Signed tenancy contracts and the payment history behind them — not the seller’s spreadsheet. On accommodation we want the last two years of occupancy, not a headline figure.
Staff, security, maintenance, utilities where they are not recharged, and any annual charge to the landowner. These come off the income before it is yours.
Commercial buyers are fewer than residential ones. We look at what comparable assets actually sold for and how long they took, because a high yield you cannot exit is a different proposition.
Figures are arithmetic on the assumptions shown, produced by our underwriting model. They are not a valuation, not financial advice, and not a promise of what any particular asset will earn. Yields quoted by type are typical ranges we see, not guarantees.
Commercial desk
Tell us the budget and we will send the underwriting on what is actually available — income, costs, occupancy history and the exit case.