Building management in Dubai: leasing a whole building, re-letting it and what the owner earns
An owner of a whole building in Dubai can hand it to a management company that becomes the tenant: it leases the block for about three years, re-lets every flat on Ejari contracts and carries the maintenance and the vacancy. Pavel, who runs seven such buildings, says the owner then simply receives fixed rent for the term.
How does whole-building management work in Dubai?
Through a master lease. The management company leases an entire building from a single owner for several years and re-lets the flats as long-term rentals registered on Ejari. It is the tenant for the owner and the landlord for everyone living in the building.
That means the tenancy contracts of the residents are signed with the management company, not with the owner. Three parties are involved: the owner, the company in the middle and the subtenants.
The company takes full responsibility for the building for the term: maintenance, running costs and the yield. In Pavel's words, it all becomes the company's problem, and the owner forgets about the building for the next three years.
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To do this a company needs a licence that allows it to handle other people's property, and Pavel says that licence is backed by a substantial bank guarantee. It is not a structure a private investor can copy informally.
How is this different from facility management and the service charge?
It is a different structure altogether. A building whose flats were sold to many owners is jointly owned property with a homeowners association, and it is serviced by a facility management company paid through the service charge.
A master-lease company works with buildings that have one owner. It does the maintenance itself and earns the difference between the rent it pays the owner and the rents it collects from tenants, rather than a fee for services.
On the service charge in jointly owned buildings, Pavel's view is that it goes on running the building: security, facilities, DEWA bills for the common areas. He says he sees no corruption there and that owners can check the published charge and how justified it is.
What does the owner earn under a master lease?
A fixed rent agreed for the term, rather than a yield on the purchase price. Pavel points out that many of these buildings were bought years ago on terms the manager never sees, so the conversation is about an annual price, not about ROI.
The owner approves the price and the company usually negotiates a grace period at the start. Payment is by post-dated cheques, and from the tenant's side the more cheques, the longer the grace period and the more the rent is spread over time, the better.
For the owner the attraction is stability: one counterparty, one contract for three years and every claim from residents going to the manager instead of to him.
Is long-term or short-term letting more profitable in Dubai?
Right now, long-term, without a doubt, says Pavel. Short-term letting of whole buildings is possible, but it needs a separate holiday home licence, and for his company long-term is more stable and more predictable.
For an individual flat, his estimate of what long-term letting earns today is 5 to 6% net, if you are lucky, and it depends heavily on the price paid. Oleg adds that flats bought before 2021 yield more, while after 2021 the answer depends very much on the area.
What does a successful whole-building case look like?
Pavel's best example is an 86-flat residential building in Dubai Investment Park. By his very rough figures, the owner receives a little over AED 10 million for three years, about AED 3.2 million a year, while the building grosses AED 5.3 to 5.4 million a year.
At 3.6725 dirhams to the dollar, that is roughly USD 870,000 a year paid to the owner against about USD 1.45 million of gross rent. The gap has to cover maintenance, vacancy and the company's own costs, which is why he stresses the figures are gross.
The building is not a labour camp, he says, but a proper residential building with residential status. Its tenants are mostly engineers and staff of companies working in the area.
Which areas work best for letting whole buildings?
For Pavel, the south of the city: Dubai Investment Park and Dubai Investments City (DIC). His company also runs buildings in Dubai Silicon Oasis, two in DIC and others in Nad Al Hamar, and has just taken a 74-flat building in JVC that it plans to let to families.
The weaker cases were in old Dubai. The company started in Deira and Abu Hail, and Pavel admits those were not entirely successful because they miscalculated slightly, although they found their way out of them.
The direction now is towards family-oriented buildings, with JVC as the first of them. He started in this business himself with a building in JVC and has been managing residential buildings on long-term lets for ten years.
What do owners of whole buildings do with them?
There are three routes. An owner can sign a master lease with a company like Pavel's, appoint a management company or exclusive agent that signs tenancy contracts in his name, collects payments and looks after maintenance, or set up his own management company or agency.
The choice depends on what the owner wants from the building. If he wants stable income straight away and a single counterparty for several years, he chooses a master lease. If he has no need for that stability, he can keep the letting income and run the building through agents or his own staff.
Pavel's company also takes individual flats to manage, not just whole buildings, and lists them on the portals under a brokerage licence for rentals.
What is the most common mistake of investors who buy buildings?
Management. In Pavel's view investors who buy buildings are often not competent to run them afterwards, or they hire a management company that does not live up to expectations.
He treats a good management company as a necessity, not an option. The building carries the owner's name for years, and if you want it run well you have to put it in reliable hands.
Asked whether he would recommend buying a building now and letting it long-term, he answers that he would, provided there is a company ready to take the building on a lease.
Timing matters as much as management. A building he managed from 2016 to 2021 was sold at the bottom of the market in 2020, and by 2024–2025 its new owner was refusing offers many times higher.
What happens to shared accommodation in Dubai?
It is not being shut down, but it is getting stricter. Pavel expects sharing to be regulated within the law, with Dubai Municipality as the single authority issuing licences and permits for it.
There will always have to be a set number of people in a flat and a legal basis for the arrangement, run either by the owner or by a company with the proper permit. The informal operators who simply made money on bed space will stop.
Frequently asked
Who signs the tenancy contract under a master lease in Dubai?
The management company. It is the tenant of the owner for the whole building and the landlord of each resident, so residents sign Ejari contracts with the company rather than with the owner.
How long is a typical master lease of a building?
In the model described in the interview, about three years, paid by post-dated cheques and usually with a grace period negotiated at the start.
Can a management company let a whole building short-term?
Only with a holiday home licence. Without it the company works on long-term Ejari lets, which Pavel considers more stable and more profitable at the moment.
What net yield does a long-term let flat give in Dubai now?
About 5 to 6% net by the guest's estimate, depending mainly on the purchase price; flats bought before 2021 tend to yield more.
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