Oct 08

Al Marjan Island: High Returns, Rising Potential

Posted at 19:26 in Al Marjan Island Insights by Miesha

Al Marjan Island: High Returns & Rising Potential

Al Marjan Island is increasingly seen as a hotspot for real estate investment in the UAE. A mix of strategic location, large-scale infrastructure, tourism momentum, and competitive pricing has been driving strong ROI prospects. Let’s break down why it’s worth considering, what to expect, and where the risks lie.

Key Drivers of ROI

1. Tourism Growth & Big Projects

   • The Wynn Al Marjan Island Resort (including the UAE’s first gaming license resort) is expected to open in early 2027. Its presence is already driving demand and attracting attention.

   • Tourism in Ras Al Khaimah is expanding fast. Visitor numbers, hotel infrastructure, leisure/resort offerings have all been ramping up.

2. Increasing Rental Rates

   • Rents on Al Marjan Island have jumped ~62% over two years (from April 2023 to April 2025).

   • Year-over-year gains remain strong (≈12% from 2024 to 2025).

3. Capital Appreciation

   • Property values have increased sharply. For example, in 2024 alone, there was ~33.3% growth in average price per square foot.

   • Villas and apartments saw prices “soar by up to 35% in 2024.”

4. Strong Rental Yields

   • Studio and smaller units delivering yields in the 7-10% range.

   • Larger units/villas somewhat lower but still healthy—typically 4-6% gross depending on location, quality, and amenities.

5. Affordability & Relative Value

   • Entry-prices per square foot are much more affordable compared to prime areas in Dubai, Palm Jumeirah, etc.

   • Because prices are lower, there’s more “upside” for growth if demand continues. Also, many projects still off-plan or under construction offer favorable payment plans.

6. Favourable Regulation & Infrastructure

   • Freehold ownership is available to foreign investors in many of these developments.

   • Zero income tax on rental earnings in UAE, no or limited capital gains impost in many UAE jurisdictions.

   • Ongoing government investment into connecting infrastructure, such as transport, utilities, plus lifestyle & tourist amenities (restaurants, beaches, leisure).

ROI Figures & What Investors Are Seeing

Here are some numbers and examples from recent market data:

Investment Type

Expected / Observed Yield / Appreciation

Studio / Small-Apartment Rentals~7-10% gross yield annually.

1 Bedroom & 2-bedroom apartments Generally 6-8% depending on view, finish, demand.

Villa / beachfront residences Slightly lower yield (due to higher purchase price / maintenance costs), but strong capital appreciation and premium rates.

Price appreciation~25-35% 5-year appreciation being reported in some analyses; annual jumps of 20-30% in certain segments.

Short-term rentals / holiday homes Higher yields possible, especially in branded / serviced units; some sources suggest up to ~15-25% in favourable cases.

Timing: Why Now Matters

• With Wynn and other major resorts coming online in 2027, early investors benefit both from first-mover advantages and from the build-out of the supporting infrastructure.

• Demand from international tourists and long-stay residents is expected to increase, pushing up rental demand and allowing owners to pick and choose premium locations.

• Current rental growth and price appreciation already show strong momentum. Missing out now could mean paying more for similar return later.

Risks & Considerations

To be balanced, here are things you'll want to watch out for:

• Supply vs Demand: Many projects are under construction, and when many come to market together, there's risk of oversupply depressing yields or appreciation.

• Operational Costs: High service charges, maintenance, utilities, furnishing (if applicable), and possibly high marketing / management fees for short-term rentals.

• Regulation / Licensing: While ownership is freehold in many places, there can be regulatory changes (zoning, hospitality licensing, etc.) that affect operations.

• Market Sensitivity: Real estate is cyclical; macroeconomic factors (interest rates, oil prices, global travel trends) can impact demand.

• Time Horizon: Best returns appear to be over a multi-year horizon, especially accounting for appreciation and ramping up rental income.

Bottom Line: What ROI Can You Expect?

Based on recent data, a realistic investor in Al Marjan Island might expect:

• Gross rental yields in the ~6-10% range annually, depending on property type and location.

• Capital appreciation possibly in the order of 20-35% over a few years, especially if buying now in off-plan or early stage properties.

• With premium or branded short-term rental units, or holiday-home usage, returns could be higher—but with more risk and operational effort.

Conclusion

Al Marjan Island offers a compelling combination of rising tourism, large-scale developments, favorable pricing, and regulatory support. For investors with a medium to longer term view (3-7+ years), it looks like a strong place to invest, especially compared to more mature and more expensive UAE markets.

Please email us for more information:

miesha@magnetarassets.com