Distress −16% · thin income Whole building · 63 units Income approach

Dubai South · 63×2BR

Dubai South (area 462) · 2022 · G+6+R · 63 units · all 2BR (1109–1236 sqft) · NSA 73 460 sqft · 78% let

Whole building · 63 units

Distress −16%, but income thin — bargain

Offer 65M is a real −16% below piece-by-piece breakup 77.2M — genuine distress. But Dubai South income is thin (cap ~5.4%): even at stabilized 95% occupancy IRR is only 7.0%, below the bar. With 22% vacancy today, the whole thesis rests on lease-up. Target ~57.1M.

Package offer 16% vs piece-by-piece

AED 65.0M

77.2M worth piece-by-piece

Price held for the buyer

—

reserved
for you

Why it's in distress — sum of parts

Sold one by one at Dubai South medians, the 63 units are worth ~77.2M. The building is offered for 65M — a real 16% below liquidation. The distress is genuine — but the income behind it (section 06) is thin, so the discount alone doesn't clear the fund threshold.

ComponentMedianQtyWorth

Worth piece-by-piece 77.2M

Discount captured

−16%

Worth 77.2M · offered for 65.0M — you enter 16% below breakup. Real distress on the entry, but the exit is priced by a thin income, so bargain harder.

Two valuation bases. Entry priced by liquidation (77.2M piece-by-piece — a real floor). Exit priced by income: 3.85M ÷ 5.4% cap = income value 71.4M (stabilized). The offer 65M sits below both, but the thin cap keeps IRR under 8%.

Asset income — rent

Building rent (85k/unit) matches the Dubai South 2BR market (86k) — real income. Seller's "Net 6.09%" was on fake 200k costs; the real Mollak service charge is 1.27M/yr, so the true yield is 4.44% today. 22% of units are vacant — the model needs lease-up to 95%.

NET rent by year · base +3% · stabilized 95% AED / year

5.40M gross stab. / yr

−1.27M service charge

3.85M net year 1

Net yield on offer

5.93%

net 3.85M ÷ offer 65.0M — stabilized, real SC

Residential · 63×2BR (stab. 95%)5.40M

Occupancy · 14 vacant78%

Gross (stabilized)5.40M

− Service charge (Mollak)−1.27M

Full entry — all costs

Offer price65.00M

DLD transfer 4% + agent 2.1%+3.97M

Trustee + title (63 × 4 450)+0.28M

Full entry 69.25M AED

Actual amount payable

Offer 65.0M + 4.25M costs (4% DLD, 2.1% agent, trustee & title on each of 63 units) = 69.25M. This is the base for the IRR and exit.

Exit in 3 years — the roadmap

Enter in 2026, lease up the 14 vacant units to 95%, hold and collect rent, sell whole in 2029 at the market yield (5.88% base = 5.4% today + 0.5% buffer). The distress is real, but the thin cap means the return still needs a lower entry. Click any year — its exit math unfolds below.

Exit 2029 · three market scenarios

06+

Resilience — the stress test

What if it doesn't play out? We check the deal across every combination of the two risk factors: rent growth (0/3/5%) × exit-market yield (6.46/5.96/5.46%). The base case is the centre cell — everything else shows the cushion.

Income thin — 6 of 9 cells below the 8% threshold

Even on stabilized income the base gives 7.0% — 3 of 9 cells pass. The −16% breakup discount is real, but the thin cap keeps it under 8%. Value comes via a bargain to ~57.1M (IRR 12%) plus the 77.2M breakup floor.

Closing offer