Contents

Capitalization Rate (Cap Rate)

Published on

Overview

The capitalization rate (Cap Rate) is a price index used to assess the investment return potential of real estate.

Definition

Cap Rate is expressed as a percentage and is calculated from publicly available sales transaction and rental contract data for the most recent completed period (monthly).

It is segmented by community, master project, property type and subtype, and by individual building. An increasing, flat, or declining Cap Rate in a chosen segment reflects market pricing trends and serves as an investor signal.

Notices:

  • Cap Rate is calculated with a precision of two decimal places.
  • Cap Rate figures are updated monthly based on official data from sales transactions and rent contracts provided by the Dubai Land Department, using the most recently completed month as the reference period.

For example: residential property price indexes (June, 2025)

Choose metric:
Communities
of Dubai, UAE
Sale Price,
AED/sq.m
Annual Rent,
AED/sq.m
Cap Rate,
%
International City Phase 3604666010,9%
Al Warsan First719678010,8%
Dubai Studio City1341312399,4%
Damac Hills 296838859,1%
International City Phase 183247459,0%
Dubai Production City100738858,9%
Jabal Ali Industrial 21138410088,9%
Silicon Oasis95448248,9%
Dubai Sports City94298368,8%
Wadi Al Safa 7106289228,7%
Jumeirah Village Circle1254310348,5%
Motor City116279888,5%
Al Quoz 488637448,4%
Arjan1275810488,3%
Dubai Health Care City Phase 21728113528,3%
Remraam88577228,2%
Al Furjan1248810028,0%
Damac Hills1312410338,0%
Hessyan 175246018,0%
Jabal Ali1421911097,8%
Jumeirah Village Triangle123679357,8%
Town Square1359310467,7%
Business Bay190221367,4%
Jumeirah Lakes Towers162491177,3%
The Greens1732912697,3%
MAG City1839612827,0%
Dubai Hills2365415626,8%
Mudon11917856,6%
Rega Al Buteen107237056,6%
Dubai Marina2045212916,5%
Sobha Hartland2153113946,5%
Madinat Jumeirah Living3137419526,3%
The Hills2540816066,3%
Al Barari2225813826,2%
Emaar South122317526,1%
Al Barsha 1134547965,9%
City Walk2759316145,9%
Mirdif Hills137328145,9%
Dubai Creek Harbour2424113955,8%
The Views2146812095,6%
Downtown Dubai293315915,5%
Al Kifaf2219511835,4%
Palm Jumeirah2941415225,4%
Za'abeel 2309221665,4%
Dubai Maritime City2448212175,0%

How to interpret Cap Rate

A higher Cap Rate indicates potentially higher rental returns, which are often associated with higher-risk or undervalued areas.

A lower Cap Rate typically reflects premium, low-risk locations or high property prices relative to rental income.

Cap Rate can help investors:

  • Compare neighborhoods by return potential.
  • Identify under- or over-valued communities.
  • Optimize real estate portfolio allocation.

Is Cap Rate the Same as Rental Yield?

Yes, Cap Rate is often referred to as Rental Yield, especially in real estate investment contexts — but they are not always 100% interchangeable.

Detailed Clarification

Term Meaning Notes
Cap Rate Net Operating Income (NOI) ÷ Property Value More formal term, used in investment and appraisal contexts.
Rental Yield Gross or Net Rent ÷ Property Value (often gross annual rent) More commonly used in residential property discussions.

Availability

GeoAnalytics v1 applies a building-age cost coefficient in its mathematical model to refine ROI and Cap Rate estimates.

Cap Rate is computed by the Smart Indexes API and exposed via the Property Price Indexes API.

In GeoAnalytics, it is available under Property > Price Indexes for filtering properties on the Dubai map.

At Property Price Indexes API available all Cap Rates to Dubai's property via API connection to database of Smart Indexes.

JSON Examples of Cap Rates

{
                    "community_number": 359,
                    "community_name_en": "AL GOZE FOURTH",
                    "community_name_ar": "القوز الرابعة",
                    "period": "2025-07",
                    "residential_sales_price_sqm_aed": 7854.82,
                    "commercial_sales_price_sqm_aed": 8853.57,
                    "residential_rent_price_sqm_aed": 833.33,
                    "commercial_rent_price_sqm_aed": 2072.7,
                    "residential_sales_price_sqm_usd": 2140.28,
                    "commercial_sales_price_sqm_usd": 2412.42,
                    "residential_rent_price_sqm_usd": 227.07,
                    "commercial_rent_price_sqm_usd": 564.77,
                    "residential_cap_rate": 9.55,
                    "commercial_cap_rate": 22.24,
                    "residential_flat_sales_price_sqm_aed": 7854.82,
                    "residential_flat_rent_price_sqm_aed": 833.33,
                    "residential_flat_sales_price_sqm_usd": 2140.28,
                    "residential_flat_rent_price_sqm_usd": 227.07,
                    "residential_flat_cap_rate": 9.55,
                    "residential_villa_sales_price_sqm_aed": 5278.05,
                    "residential_villa_rent_price_sqm_aed": 833.33,
                    "residential_villa_sales_price_sqm_usd": 1438.16,
                    "residential_villa_rent_price_sqm_usd": 227.07,
                    "residential_villa_cap_rate": 15,
                    "residential_stacked_townhouses_sales_price_sqm_aed": "",
                    "residential_stacked_townhouses_rent_price_sqm_aed": "",
                    "residential_stacked_townhouses_sales_price_sqm_usd": "",
                    "residential_stacked_townhouses_rent_price_sqm_usd": "",
                    "residential_stacked_townhouses_cap_rate": "",
                    "residential_building_sales_price_sqm_aed": "",
                    "residential_building_rent_price_sqm_aed": "",
                    "residential_building_sales_price_sqm_usd": "",
                    "residential_building_rent_price_sqm_usd": "",
                    "residential_building_cap_rate": "",
                    "commercial_office_sales_price_sqm_aed": 8853.57,
                    "commercial_office_rent_price_sqm_aed": 4285.71,
                    "commercial_office_sales_price_sqm_usd": 2412.42,
                    "commercial_office_rent_price_sqm_usd": 1167.77,
                    "commercial_office_cap_rate": 45.99,
                    "commercial_shop_sales_price_sqm_aed": 8853.57,
                    "commercial_shop_rent_price_sqm_aed": 2072.7,
                    "commercial_shop_sales_price_sqm_usd": 2412.42,
                    "commercial_shop_rent_price_sqm_usd": 564.77,
                    "commercial_shop_cap_rate": 22.24,
                    "commercial_show_rooms_sales_price_sqm_aed": "",
                    "commercial_show_rooms_rent_price_sqm_aed": "",
                    "commercial_show_rooms_sales_price_sqm_usd": "",
                    "commercial_show_rooms_rent_price_sqm_usd": "",
                    "commercial_show_rooms_cap_rate": "",
                    "residential_sales_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": 120.06,
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": 1.55,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_sales_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": 0,
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": 0,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_rent_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": 117.46,
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": 16.41,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_rent_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": 1969.39,
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": 1906.29,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_sales_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": 32.72,
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": 1.55,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_sales_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": 0,
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": 0,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_rent_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": 32.01,
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": 16.41,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_rent_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": 536.62,
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": 1906.29,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_cap_rate_monthly_growth_rate": [
                        {
                        "value": 1.22,
                        "kind": "absolute",
                        "unit": "pp"
                        },
                        {
                        "value": 14.65,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_cap_rate_monthly_growth_rate": [
                        {
                        "value": 21.13,
                        "kind": "absolute",
                        "unit": "pp"
                        },
                        {
                        "value": 1903.6,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_flat_sales_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": 120.06,
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": 1.55,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_flat_rent_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": 117.46,
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": 16.41,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_flat_sales_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": 32.72,
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": 1.55,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_flat_rent_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": 32.01,
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": 16.41,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_flat_cap_rate_monthly_growth_rate": [
                        {
                        "value": 1.22,
                        "kind": "absolute",
                        "unit": "pp"
                        },
                        {
                        "value": 14.65,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_villa_sales_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": 0,
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": 0,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_villa_rent_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": 117.46,
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": 16.41,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_villa_sales_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": 0,
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": 0,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_villa_rent_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": 32.01,
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": 16.41,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_villa_cap_rate_monthly_growth_rate": [
                        {
                        "value": 2.11,
                        "kind": "absolute",
                        "unit": "pp"
                        },
                        {
                        "value": 16.37,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_stacked_townhouses_sales_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_stacked_townhouses_rent_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_stacked_townhouses_sales_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_stacked_townhouses_rent_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_stacked_townhouses_cap_rate_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "pp"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_building_sales_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_building_rent_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_building_sales_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_building_rent_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "residential_building_cap_rate_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "pp"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_office_sales_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": 0,
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": 0,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_office_rent_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": 0,
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": 0,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_office_sales_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": 0,
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": 0,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_office_rent_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": 0,
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": 0,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_office_cap_rate_monthly_growth_rate": [
                        {
                        "value": 0,
                        "kind": "absolute",
                        "unit": "pp"
                        },
                        {
                        "value": 0,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_shop_sales_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": 0,
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": 0,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_shop_rent_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": -662.37,
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": -24.22,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_shop_sales_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": 0,
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": 0,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_shop_rent_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": -180.48,
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": -24.22,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_shop_cap_rate_monthly_growth_rate": [
                        {
                        "value": -7.11,
                        "kind": "absolute",
                        "unit": "pp"
                        },
                        {
                        "value": -24.22,
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_show_rooms_sales_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_show_rooms_rent_price_sqm_aed_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "AED/sqm"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_show_rooms_sales_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_show_rooms_rent_price_sqm_usd_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "USD/sqm"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ],
                    "commercial_show_rooms_cap_rate_monthly_growth_rate": [
                        {
                        "value": "",
                        "kind": "absolute",
                        "unit": "pp"
                        },
                        {
                        "value": "",
                        "kind": "percent",
                        "unit": "%"
                        }
                    ]
                    }