Case Study: Bluewaters Residence 4, Bluewaters Island, Dubai UAE
Transaction Details:
Location: Bluewaters Residence 4, Bluewaters Island Dubai
Property Type: Apartment
Property Size: 1,641 sqft
Purchase Date: Apr 2022
Purchase Price: AED 4,750,000
Sold Date: Jun 2024
Sold Price: AED 8,300,000
Annual Rent: AED 209,000
Financial Analysis
Holding Period:
Holding Period: 2 years and 2 months (2.17 years)
DLD Fee Calculation:
DLD Fee (4% of Purchase Price): AED 190,000
Total Cost of Ownership:
Total Cost of Ownership: AED 4,940,000
Purchase Price: AED 4,750,000
DLD Fee: AED 190,000
Capital Investment:
Capital Investment: AED 2,565,000
50% of Purchase Price: AED 2,375,000
DLD Fee: AED 190,000
Net Profit Calculation:
Net Profit: AED 3,360,000
Sold Price: AED 8,300,000
Total Cost of Ownership: AED 4,940,000
Service Charges:
Service Charges per Year (12.5% of Annual Rent): AED 26,125
Net Rent Per Year: AED 182,875
Annual Rent: AED 209,000
Service Charges: AED 26,125
Total Rental Income:
Total Rental Income: AED 397,519
Net Rent Per Year: AED 182,875
Holding Period: 2.17 years
Total Return:
Total Return: AED 3,757,519
Net Profit: AED 3,360,000
Total Rental Income: AED 397,519
CoC Return:
Cash on Cash Return: 1.46
Total Return: AED 3,757,519
Capital Investment: AED 2,565,000
ROIC:
ROIC: 146%
((Net Profit + Total Rental Income) / Capital Investment) * 100
Summary Table:
| Item | AED | USD |
|---|---|---|
| Purchase Price | 4,750,000 | 1,301,370 |
| Sold Price | 8,300,000 | 2,273,973 |
| Total Cost of Ownership | 4,940,000 | 1,353,425 |
| Capital Investment | 2,565,000 | 702,740 |
| Net Profit | 3,360,000 | 920,548 |
| Total Rental Income | 397,519 | 108,903 |
| Total Return | 3,757,519 | 1,029,452 |
| CoC Return | 1.46 | 1.46 |
| ROIC | 146% | 146% |
Explanation of Transaction:
- Purchase and DLD Fee: The apartment was purchased in April 2022 for AED 4,750,000. The Dubai Land Department (DLD) fee of 4% was AED 190,000, making the total cost of ownership AED 4,940,000.
- Capital Investment: The capital investment required was 50% of the purchase price plus the DLD fee, totaling AED 2,565,000.
- Net Profit: The apartment was sold in June 2024 for AED 8,300,000, resulting in a net profit of AED 3,360,000 after subtracting the total cost of ownership.
- Rental Income: The apartment generated an annual rent of AED 209,000 with service charges of 12.5%. The net rent per year was AED 182,875, leading to a total rental income of AED 397,519 over the holding period.
- Total Return and CoC Return: The total return, including net profit and rental income, was AED 3,757,519. The cash on cash return was calculated at 1.46.
- ROIC: The return on invested capital was 146%, showcasing the significant profitability of the investment.
Per Square Foot Price:
Per Square Foot Price at Sale: AED 5,058
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This document and its contents, including any calculations and analyses, are provided for informational and educational purposes only and should not be construed as financial advice, an offer, or a guarantee of future performance. The information herein is simplified to enhance understanding and does not reflect the complexity of real-world financial decisions. Past performance is not indicative of future results, and investments in real estate are subject to market risks and uncertainties that can result in the loss of principal. PHOREE Real Estate, including its owners, managers, employees, and consultants, makes no warranties or guarantees regarding the accuracy, reliability, or completeness of the information provided. The company and its affiliates shall not be liable for any errors or omissions in the content, or for any actions taken in reliance thereon. Investors are strongly advised to consult with professional financial advisors before making any investment decisions. The responsibility for any investment decision lies solely with the investor, and PHOREE Real Estate disclaims any liability for financial loss or damage that may result from such decisions. By accessing and using this information, the reader agrees to the terms of this disclaimer and acknowledges that they are acting on their own behalf and at their own risk in any investment decisions.
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