Smart Rental Index 2025: Dubai marks step towards regulating rental yields

Dubai Land Department (DLD) launched the Smart Rental Index 2025, marking a major step towards regulating and developing the emirate’s real estate sector, according to a statement issued by the Government of Dubai Media Office on Thursday.

This was announced during a press conference held at the department’s headquarters, which was attended by several partners, along with a group of representatives from government entities and real estate companies in Dubai, as well as DLD’s CEOs and Directors, added the statement.

The index represents a system that integrates the latest technologies and real estate expertise, aiming to provide exceptional services that meet the needs of all stakeholders in the real estate market.

It will further enhance transparency and fairness in determining rental values, aligning with Dubai’s Digital Strategy and the Dubai Real Estate Sector Strategy 2033 objectives, the statement added.

During the conference, Majid Al Marri, CEO of the Real Estate Registration Sector at Dubai Land Department, emphasised that the launch of the ‘Smart Rental Index’ marks a transformation in the regulation and development of the real estate sector in Dubai.

“This index relies on artificial intelligence technologies and a building classification system and provides fair and accurate rental valuations, strengthening Dubai’s position as a global investment destination,” as per the press statement.

“In 2024, the total number of registered rental contracts exceeded 900,000, reflecting an 8% growth compared to the previous year.

“This increase reflects the growing confidence in the Dubai real estate market, enabling all parties in rental agreements to make well-informed, ultimately achieving the aspirations of all parties and enhancing the long-term sustainability of the market,” he was further quoted as saying.

How it works: The index covers all residential areas in Dubai, including key districts, special development zones, and free zones, ensuring standardised valuation and pricing criteria. It does not cover commercial properties.

It relies on an advanced building classification system that considers all technical and service-related aspects of properties.

Each building will be valuated based on a comprehensive set of criteria, including technical and structural characteristics, the quality of finishes and maintenance, the building’s strategic location and its spatial value, as well as the level of services and facilities available,

such as maintenance, cleanliness, and parking management.

The mechanism aims to ensure accurate and fair determination of rental values, reflecting each property’s true quality and advantages.

Landlords will also have to improve ranking of their properties before increasing rents so if a building has a high rating, expect rents to go up.

“We linked the index to the building classification system and also encouraged owners to keep their buildings updated as this will improve the quality of life and rental value for owners,” Majid Al Marri, CEO of the Real Estate Registration Sector at Dubai Land Department was quoted as saying by Khaleej Times.

Dubai has increasingly seen skyrocketing rental rates and this is an attempt to formally regulate this particular sector.

The move is the city’s latest attempt to digitise all services, such as the Dubai Digital Strategy and the Dubai Real Estate Sector Strategy 2033.

Earlier, Dubai Land Department launches a series of features allowing landlords and tenants to register, renew and cancel contracts seamlessly online.

It also introduced online systems to assess tenants’ credit ratings.

The Real Estate Strategy 2033 will seek to support Dubai’s goal to increase the value of real estate transactions to AED1 trillion ($227.2 billion) by 2033 and double the sector’s contribution to economic diversification.

Copyright Business Recorder, 2025