What yields actually look like across sixteen communities

Gross yield in Dubai and Abu Dhabi runs from roughly 3.5% at the top of the market to roughly 9% at the volume end, and the first thing to understand is that the spread is not a league table. It is a price for something.

Jumeirah Village Circle and Al Reef sit at the high end, both underwriting at 7% to 9% gross. They are also the two communities where the most is still being built, where the internal roads are narrowest, and where the building you buy into matters more than the address does. You are being paid for absorbing that risk. Emirates Hills, at 3.5% to 5%, and Palm Jumeirah, at 4% to 6%, sit at the low end because the capital value has already done the work, and a buyer there is generally not solving for yield at all.

The middle of the book is where most decisions actually get made. Dubai Marina runs 5.5% to 7.2%, Business Bay and Creek Harbour 5.5% to 7%, Downtown 5% to 6%. The Abu Dhabi islands cluster in the same territory with a higher floor: Al Reem at 6.5% to 8.5% is the strongest yield story in that emirate's established stock, Yas and Al Raha Beach at 6% to 7.5%, Saadiyat at 5% to 6.5% because Saadiyat is a capital-value market wearing an island address. Those are the bands we underwrite against, and every one of them is gross.

Gross is the part that flatters. Service charges come out of it, and in this market they vary more inside one community than between two — a low floor in an older tower and a high floor in a newer one can be a full percentage point apart on the same street. Ask for the actual figure per square foot on the specific unit, not the community average, and ask what it was two years ago.

The second thing gross yield hides is void. A 7% yield with two months empty between tenancies is not 7%. Communities that fill fastest are usually the ones near a Metro station or a school run, and that is worth more than half a point of headline yield to most landlords.

What we would actually say to someone buying for income: pick the yield band you can defend to yourself, then choose inside it on the building rather than the community. The difference between a good and a bad building in the same area is larger than the difference between two areas.