Fitted office

JBC 4, Jumeirah Lake Towers

Property details

Office

Built up area

1,351 sqft

Average net ROI

8.47%

Ref no.

ZK-JBC4-001

AED 6,400,000

All listings

Najeeb Zakri

Investment Advisor

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A fitted Grade A floor plate in JBC 4, sold with a signed three-year lease in place and the rent settled annually in a single cheque.

This is an income asset rather than a floor plate to fit out. The office is already occupied on a signed three-year lease, the fit-out is done to a luxury standard, and the rent arrives once a year in a single cheque, so the position produces from the day the title transfers rather than after a void and a contractor.

The layout is a working one rather than an open shell: twelve workstations, two private cabins, a meeting room and a conference room, a pantry and an internal washroom. That matters to the exit as much as to the income, because a tenant taking over a room-for-room fit-out signs faster than one pricing a strip-out.

The lease is structured to hold. Year one is locked outright. Thereafter either side needs four months' notice, with a four-month penalty to break, dropping to two months' notice and a two-month penalty in year three. The rent steps up each year, which is what carries the net return from 8.04 per cent in year one to 8.90 per cent in year three.

The headline yield is struck on the VAT-inclusive cost, which is the cautious reading. A VAT-registered buyer recovers that VAT, and the three-year average net return on the recovered basis is 8.87 per cent against 8.47 per cent as published.

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The investment case

8.47%

3-year average net ROI

On the total purchasing cost including VAT

8.87%

Net of VAT recovery

For a VAT-registered buyer

9.30%

Gross ROI

Year one rent on the purchase price

Purchasing costs

The purchasing costs for Fitted office, in AED
Purchase price, ex.VATAED 4,737.23 per sqft · 1,351 sqft	AED 6,400,000
Transfer fee (DLD, 4% of purchase price)	AED 256,000
Agency fee (2% of purchase price, ex.VAT)	AED 128,000
Sales progression (conveyancing)	AED 9,500
Trustee fee and title deed admin	AED 4,980
Total purchasing cost, ex.VAT	AED 6,798,480
Total purchasing cost, inc.VAT	AED 7,124,880

VAT falls on the purchase price and the agency fee. It does not fall on the DLD transfer fee, conveyancing or the trustee fee, which is why both totals are shown rather than one derived from the other.

The lease

Term: Three years, signed
Rent, year one: AED 595,000 plus VAT
Payment: One cheque a year
Year one: Locked; no break
Years one and two: Four months' notice, four-month penalty to break
Year three: Two months' notice, two-month penalty to break

Service charge runs at AED 16.26 per sqft, taken out of the rent in every year below before the return is struck.

Rental income and return

Rental income and net return for Fitted office, by year, in AED
Measure	Year 1	Year 2	Year 3
Rent per sqft	AED 440.41	AED 462.44	AED 485.56
Rent per annum	AED 595,000	AED 624,750	AED 655,987
Less service charge	(AED 21,967.26)	(AED 21,967.26)	(AED 21,967.26)
Net rent	AED 573,032.74	AED 602,782.74	AED 634,019.74
Net ROI, on cost inc.VAT	8.04%	8.46%	8.90%
Net ROI, on cost ex.VAT	8.43%	8.87%	9.33%

Every figure above is taken from the seller’s costing sheet and the signed tenancy contract. The annual rent steps are the ones written into the lease, not a forecast. Returns are stated before financing, income tax and any cost of ownership not listed here, and a buyer should have the lease and the service charge budget verified independently before exchange.

Specification

Luxury fitted, turnkey
12 workstations
2 private cabins
Meeting room
Conference room
Pantry
Internal washroom
One parking space
Tenanted on a signed three-year lease
Rent paid annually, one cheque
Year one rent AED 595,000 plus VAT
Annual step-up written into the lease
Year one locked, no break
8.47% average net ROI
9.30% gross ROI
Grade A commercial tower
Jumeirah Lake Towers, DMCC free zone
Service charge AED 16.26 per sqft

Disclaimer: all sizes listed are approximate and based on the documentation provided at the time of listing the property. Exact unit and plot sizes may vary from what is presented above.