How to competently invest in hotel apartments in Dubai


The topic of investing in Dubai is very actual nowadays as it is one of the most profitable businesses. So, how to competently invest in hotel apartments in Dubai?

Dubai’s hospitality market is becoming an increasingly complex structure in the wake of the diversification of the economy of the emirate, as announced by the local government, and as the World Expo 2020 approaches. The hotel fund of the emirate, according to forecasts, will grow to 120,000 numbers by the end of 2019.

It is expected that the middle segment will contribute only to 8% to the total volume of the hospitality market until 2020, while the premium segment will take 40% share.

Another market trend is the appearance of large developers in the hospitality market.
Traditional market players are reviewing their property management strategies, and the market is witnessing the formation of a new major investment mechanism. The market is becoming more saturated.

Dubai expects to have 20 million tourists in 2020. In addition to traditional resorts and five-star hotels, on the eve of the global exhibition, developers have seriously embarked on the strengthening of the segment of hotel apartments, which will help them to convert the tourist flow into real profit.

The main advantage of hotel apartments is their complete readiness. They provide all the details and offers a variety of services that are offered only in hotels. They are convenient for newcomers of Dubai who do not have time for repairs, and investors who do not need to be constantly distracted by requests of the lodger to fix something.

The investor, as known, has the right to use the apartments for his own residence each year. Today, developers are increasingly making concessions and extending the traditional two-week period when apartments can be in the personal use of the investor for a longer time.

Experts note that the increase in demand for serviced apartments began in 2010 and now is intensified by investors looking for more favorable terms of return on investment and turn-key investment decisions. The main investment zones of Dubai for such projects are The Palm Jumeirah and Downtown Dubai, followed by Dubai Marina, Jumeirah Lakes Towers and Barsha Heights.

Practice shows that with a reasonable choice based on market analysis, investments in serviced apartments bring higher yields from renting – up to 12% per year, while investments in conventional apartments bring up to 8-9%.