UAE among top five in rental yield
Dubai, June 25, 2012
A report by Global Property Guide has revealed that UAE is among the top five countries in the Mena region in terms of rental yields, luxury developer Damac Properties said.
The study compared the rental yields of apartments, all about 120 sq m in size, across various countries, a statement from Damac said. With gross rental yields of 6.89 per cent per annum, the UAE ranks slightly behind Jordan, but is ahead of Egypt, Morocco and Lebanon.
Niall Mc Loughlin, senior vice president, Damac Properties, said: “The UAE has higher rental returns than some of the most popular locations for property investment in the world. With yields at 6.89 per cent, the UAE offers much higher rental returns than for example the UK and more than double the rental yield of Hong Kong.”
“Another important factor for investors to consider is the favorable tax environment in the UAE. Rental income is tax free, and there are no capital gains taxes levied on the sale of properties.”
“The property market in the UAE is changing remarkably; three years ago it was dominated by investors pursuing capital growth, and now that prices have stabilised, it is characterised by investors seeking continually high rental yields. While the returns aren’t as lucrative, they are still relatively high and most importantly they are consistent,” said Mc Loughlin.
Jordan offers the highest rental returns in the Mena region, with gross yields of 10 per cent, according to the research. While gross yields in the UAE are slightly lower, they are still the second highest in the Arab world.
“Rental yields are extraordinarily high in the UAE, compared to most other countries around the world. Now that prices have stabilised in premium locations, the high yields make investing in the UAE property market an attractive proposition for any global investor,” said Mc Loughlin.
Damac recently offered a 24 per cent rental return guarantee over three years on sales of apartments in the developer’s Burjside Terrace project in Downtown Dubai.
“We recognised the changing dynamic of the UAE property market. Buyers are seeking consistent rental returns, and to show just how confident Damac is about the future sustainability of the market we backed all unit sales in our Burjside Terrace development with a rental guarantee,” Mc Loughlin said.
Damac said it is experiencing the strongest demand in three years across its range of premium developments at Dubai Marina, Downtown Dubai and the DIFC. “There is a strong flight to quality in both Dubai and Abu Dhabi, as existing residents seek to upgrade and new buyers aim to take advantage of market conditions which currently offer extraordinary value for money.”
“The UAE is a vibrant, global business hub with world-class infrastructure, strategic location, established tourist destinations, proven business centres, a highly skilled expat workforce, and most importantly strong and stable government leadership,” Mc Loughlin concluded. – TradeArabia News Service