Market Intelligence
Reading a Dubai service charge
One of the largest recurring costs of ownership, and among the least examined.
Service charges in Dubai are levied per square foot and published annually. Between two apparently similar towers in the same district, the figure can differ substantially.
What drives the difference
Amenity intensity is the largest factor. Pools, gyms, chilled water plant, extensive landscaping and staffed reception all carry ongoing cost. A building with a modest amenity set will generally cost less to run per square foot.
Reserve fund contributions
A portion of the charge should fund long-term replacement of plant and fabric. A building with a thin reserve fund may present a lower charge today and a special levy later.
Effect on net yield
On an income-producing hold, the service charge is deducted before net yield. A difference of a few dirhams per square foot compounds meaningfully across a multi-year hold and should be modelled at the point of purchase.