Prime Residential Real Estate in the UAE Expected to Provide Yield of 6.25% to 7%

The real estate market in the UAE is set to provide strong yields for investors, according to a new report released by CBRE Research. Prime residential properties are expected to yield between 6.25% to seven percent, while residential properties could see a yield of seven percent to 7.5 percent.

In the office category, prime offices are predicted to provide a yield range of 6.5% to 7.25%, with grade A offices expected to yield seven to 7.5%. The total value of real estate projects in the UAE currently stands at $409 billion, representing 24.4% of the total projects in the Gulf Cooperation Council region.

The report also highlights the performance of the residential market in the UAE, with both price and transaction volume growth recorded in 2023. In Abu Dhabi, transaction volumes are expected to continue growing in 2024, driven by new high-end and prime stock. However, existing and dated stock may underperform the market.

In Dubai, transaction volumes are projected to decrease slightly, with price growth in the apartment and villas segments expected to moderate over the year. The office space category is expected to see strong occupier activity, with prime and grade A assets outperforming the market due to high demand and limited supply.

In the retail sector, average rents in Abu Dhabi and Dubai increased significantly last year. Demand for retail space is expected to remain strong in both cities, although the lack of quality stock in Dubai is a concern. Rental rates are predicted to continue increasing, albeit at a slower rate.

Overall, the real estate market in the UAE shows signs of strength and resilience, with opportunities for investors across different sectors.