Commercial property net yield in Dubai: a worked example

A commercial property's advertised yield is only the beginning of an investment comparison. For a purchase from AED 5 million, calculate income after property expenses and compare it with the full acquisition cost. Keep borrowing and your tax position in separate calculations so the result remains understandable.

Build the income figure from documents

Start with the signed lease, payment schedule and evidence of receipts. Separate current contracted rent from a broker's estimate of future rent. A vacant unit has a potential income scenario; it does not have an existing rental cash flow.

Record incentives, rent-free periods and the dates when payments are actually due. A headline annual rent can conceal a materially different first year.

A worked example with explicit assumptions

The following is a hypothetical teaching example, not a Livrichy transaction, market forecast or available investment. It assumes a cash purchase and excludes financing and investor-level taxes. Transaction-specific VAT must be modelled separately.

Item	Illustrative amount
Purchase price	AED 6,000,000
Other acquisition costs, assumed for this example	AED 350,000
Total acquisition cost	AED 6,350,000
Annual rent at full occupancy	AED 480,000
One month's rent lost to vacancy	AED 40,000
Annual owner-paid operating costs	AED 60,000
Operating income after these deductions	AED 380,000

Gross yield on price is 480,000 divided by 6,000,000: 8%. The illustrated operating return on total acquisition cost is 380,000 divided by 6,350,000: approximately 5.98%. Both calculations are correct, but they answer different questions.

Check what the expense line contains

Ask who pays building charges, maintenance, management, insurance and utilities during vacancy. Do not subtract an expense twice if the rent statement already includes it. Keep major replacement works in a separate capital budget, then calculate their effect on cash available to you.

For a Dubai building, consult the DLD Service Charge Index for the relevant project, usage and year. Obtain a separate account statement for arrears.

Finally, test a lower-rent case and a longer vacancy. If the purchase works only when every assumption is favourable, record that dependence before comparing it with another property. Bring the completed worksheet, target budget and investment timeframe to your shortlist discussion.

Build your commercial shortlist

Tell us your budget from AED 5 million, investment objective, preferred property type and timeframe. Request a property shortlist or browse current commercial listings. Availability and suitability are checked for each enquiry.

Related guide: Is Dubai real estate profitable? Calculate the net rental return.

Sources and scope

Official references checked on 29 October 2026: DLD: Service Charge Index, FTA: Real Estate VAT Guide. The comparison methods and hypothetical examples are Livrichy planning aids. Official sources do not endorse the examples; confirm current requirements for the actual transaction.