By Yousef Jalili, Founder, Jalili Real Estate
Dubai’s published rental yields are gross. After service charges, cooling, management and vacancy, a 7% gross yield is typically a 5% net one — and nobody publishes that second number.
If you have read a Dubai market report this year, you have seen a yield figure. Engel & Völkers put residential gross yield at 6.8% for FY2025, and apartments specifically at 7.1%. Knight Frank, looking at prime stock, gives a more conservative 5–7% for apartments and 4.5–6% for villas. Both are credible. Both are gross.
We read every major market report published this year. Not one of them deducts the cost of owning the property. That is the convention rather than an oversight: gross yield can be calculated from two public numbers, and net yield cannot.
What actually comes out
Take a typical deal: an apartment at AED 1.2 million, let at AED 85,000 a year. That is a gross yield of 7.1% — squarely in line with the headline figure.
Then the deductions begin.
- Service charge. Billed per square foot per year, and the spread is wider than buyers expect. The same city contains buildings under AED 10 and buildings past AED 50. We cover the mechanics separately in what owners actually pay.
- Cooling. Usually billed separately, and often missed entirely. More on this below.
- Management, if you are not letting it yourself.
- Vacancy, which is not a cost until it is, and then it is the largest one.
On that AED 1.2m apartment the running costs land somewhere between AED 20,000 and AED 25,000 a year. The 7.1% gross becomes roughly 5.0–5.4% net — a haircut of about a quarter to a third.
That is still a good return by international standards. It is simply not the number in the headline. These are running costs, distinct from the one-off costs of the purchase itself.
The cost that is not in the service charge
District cooling is the most commonly missed item in any Dubai yield calculation, and the reason is structural: it is billed separately from both DEWA and the building’s service charge.
Providers such as Empower and Emicool meter cooling in refrigeration tons. There is a consumption element, and — this is the part that surprises people — a capacity charge that is payable whether or not anyone is living there. An empty apartment still accrues it.
If you are underwriting a purchase and your spreadsheet has one line for “service charge”, the cooling cost is missing from it.
Why “average service charge by area” is a number worth ignoring
You will find tables online giving a service charge per square foot for each Dubai community. We do not publish one.
Take Palm Jumeirah. Published figures for it range from roughly AED 7 to AED 50 per square foot depending which source you read — and most of those sources are not wrong. The Palm contains 1990s Shoreline apartments, large low-rise villas, and branded towers with private beach management. They are different products with different cost bases that happen to share a postcode.
Service charge is a building-level number, not an area-level one. An area average is the mean of things that should never have been averaged.
How to check the real figure in two minutes
You do not have to take anyone’s word for it, including ours. The Dubai Land Department publishes a Service Charge Index — a public lookup of the RERA-approved rate for individual buildings, searchable by project and budget year, with no login.
Under Law No. 6 of 2019, a management company cannot levy a charge without RERA approval, the budget must be reviewed by a RERA-recognised auditor, and the funds sit in a supervised account. That framework is the reason a verifiable number exists at all.
We looked up three. All sit in Downtown Dubai, all are managed by Emaar Community Management, and all three figures are the approved 2025 residential budget:
| Building | Total, AED per sq ft |
|---|---|
| Burj Khalifa — The Residences | 52.31 |
| Burj Vista | 18.80 |
| South Ridge | 14.58 |
The Burj Khalifa figure is defensible for what the building is. A supertall carries façade access, pressurisation and high-rise fire systems that ordinary towers do not, and the index gives it a fire-provisions line the other two do not carry. Burj Vista is a conventional 2018 tower and prices like one; its largest single line is utilities, at AED 6.06. South Ridge is mid-2000s mid-rise, and its budget carries an income credit that pulls the total down further. Same district, same manager, same year, and a rate that varies by three and a half times. Note also that each building’s cooling appears on the index as a separate line beneath the total, not inside it.
Why this matters more in 2026 than it did in 2024
Supply is arriving. Sobha alone is handing over 6,819 units this year — its largest annual delivery, with a combined sales value of about AED 21.6 billion. Across Dubai, somewhere between 77,000 and 83,000 units are scheduled for 2026, and Fitch has forecast a price correction of up to 15% running through the year on the back of it.
Our read is that the supply is already in the rent numbers: CBRE puts Dubai residential rents down 6.2% in the second quarter of 2026, against roughly 18,000 completions in the first half. What we would not do is underwrite on a view about which segment escapes it — the area-level data for this year does not agree with itself. Bayut has Palm Jumeirah apartment rents up 5.3% across the first half; Property Finder has prime areas including the Palm and Downtown down around 15%. The cost side is not in dispute, and it does not track rents at all: into 2026 South Ridge’s approved budget rose 13.9% while Burj Vista’s fell 2%, in the same district, in the same year.
When more units compete for the same tenants, the gross figure is the first thing to move and the service charge is the last. It does not move in your favour on request. We set out what that shift means for tenants in a turning point for tenants.
What we tell clients
Underwrite on net, not gross. Get the building’s actual service charge before you sign, not after. Put the cooling capacity charge in the model as its own line. And treat any yield quoted without those three things as a starting point for a conversation rather than a number you can bank.
Frequently asked questions
What is a realistic net rental yield in Dubai?
Gross yields of 6–8% are widely reported. After service charges, cooling, management and a vacancy allowance, a realistic net figure is commonly around a quarter to a third lower — so roughly 5% net on a 7% gross property. The exact number depends on the building, not the area.
Is district cooling included in the service charge?
No. District cooling from providers such as Empower or Emicool is billed separately from both DEWA and the building service charge, and includes a capacity element payable even when the unit is empty.
How do I find the service charge for a specific Dubai building?
The Dubai Land Department publishes a public Service Charge Index, searchable by project and budget year, showing the RERA-approved rate. Service charges must be approved by RERA and reviewed by an accredited auditor under Law No. 6 of 2019.