United Arab Emirates · Real Estate Intelligence
Dubai Capital Stack
Visualizer
Investment Financing Structure by District
Data current through February 2026 · DLD Verified
How to read this tool — key terms explained for investors
Equity
The developer's or investor's own cash. Higher equity means lower borrowed money and therefore lower financial risk. Ultra-prime assets (Palm, DIFC) use more equity by choice.
Senior Debt
Bank mortgage or institutional loan — repaid first if the asset is sold. The largest and cheapest layer. Lower interest rate but strict conditions (covenants).
Mezzanine
A smaller, higher-cost loan bridging the gap between senior debt and equity. Common in off-plan projects. Higher risk = higher interest rate, typically 10–15% p.a.
◈ LTV Ratio
Loan-to-Value: total debt as % of property value. 70% LTV = 70% borrowed, 30% equity. Lower LTV = safer, more conservative structure. UAE banks typically cap at 75%.
◈ Gross Yield
Annual rent ÷ purchase price. Dubai's 5–8% compares very favourably to London (3–4%) or Paris (2–3%). Does not deduct costs — see Cap Rate for the net figure.
◈ Cap Rate
Capitalisation rate: net operating income ÷ property value, after costs. The gap between Gross Yield and Cap Rate reflects Dubai's service charges, management fees, and void periods.
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Market Overview
Dubai Real Estate · Capital Structure Benchmarks · Feb 2026
Understanding Capital Stack Risk & Returns
Low Risk — Conservative
Equity above 38%, LTV below 62%. Found in Palm Jumeirah, DIFC, City Walk. UHNWIs prefer low leverage — asset preservation is the goal, not yield maximisation.
Balanced — Mid-Market
Equity 30–38%, LTV 62–70%. The most common structure across Dubai. Good blend of leverage efficiency and risk management. Suitable for most institutional investors.
Higher Leverage — Yield Focus
Equity below 30%, LTV above 70%. Seen in high-yield or emerging zones like JVC and Dubai South. Higher rental returns but more sensitive to income volatility or interest rate shifts.
Developer Activity Score
Rated 1–10. Reflects current launch frequency, off-plan absorption, and new supply pipeline. High activity signals demand momentum but may also raise future supply risk.
Yield vs Cap Rate Gap
Gross yield always exceeds cap rate. The gap equals operating costs. In Dubai this typically runs 0.5–1.5% depending on asset class — much lower than most global markets.
When Mezzanine is High
A mezzanine layer above 12% often indicates off-plan or phased delivery projects where senior lenders won't bridge the full gap. More common in emerging districts — higher risk, higher potential upside.