Service charges: the number that quietly decides your yield
Two identical apartments in neighbouring towers can differ by more than 40% in annual service charge. Here is how to check before you buy.
Sofia Marchetti · 26 July 2026 · 5 min read
Service charges are the most consistently underestimated line in a Dubai investment model. Buyers negotiate hard on price, secure a favourable payment plan, and then discover that the building's annual charge is AED 22 per square foot rather than the AED 14 they assumed.
What the charge covers
The service charge funds common-area maintenance, security, insurance, chiller and district cooling infrastructure, lift servicing, and the reserve fund for major capital works. In amenity-heavy buildings it also funds pools, gyms, cinemas and concierge staffing.
Amenity density is the primary driver of variance. A tower with a padel court, three pools and a 24-hour concierge costs meaningfully more to run than one with a gym and a lobby desk. Neither is wrong — but only one of them is priced into the rent you can charge.
Checking before you commit
Dubai Land Department publishes approved service charge rates by project through the Mollak system. The figure is public. Before signing anything, ask for:
- The current approved rate per square foot for the specific building
- Three years of historical rates, to see the escalation trend
- The reserve fund balance, which tells you whether a special levy is likely
The yield arithmetic
On a 900 square foot apartment, the difference between AED 14 and AED 22 per square foot is AED 7,200 a year. Against a net rent of AED 90,000, that is 8% of your gross income — enough to move a headline 7.5% yield to under 7% before you have accounted for anything else.
Service charge is not a detail. On compact stock it is frequently the second-largest cost line after the mortgage.
Where amenity earns its keep
None of this argues for the cheapest building. Amenity provision drives rental demand and tenant retention, and a well-run building with a healthy reserve fund holds value better than a poorly maintained one. The point is to price it deliberately rather than discover it after handover.
