Insider Insights: How did Stake’s properties perform in H1 2023?

Welcome to Stake’s first half-year review! As part of our ongoing efforts to maintain transparency and keep our investors updated on our performance and progress, we wanted to give you a more detailed snapshot of how we fared over the first half of 2023.

So far this year, as you will have likely seen through our other correspondence, we have truly reached an inflection point. This was made possible not only because of the efforts of our team around the world but also because of the trust each of our investors has placed in Stake. This is not something we take for granted, and we are working tirelessly to ensure we deliver the experience and results that you all deserve.

Going forward, we will be sharing a similar update on a quarterly basis, but for now, let’s dive into what happened over the last 6 months!

A Strong Dubai Market Amidst a Turbulent Global Backdrop

We won’t spend too much time discussing the performance of the Dubai market over the first half of the year (we’re sure you’ve heard enough of that in our newsletters!). However, it is worth pointing out that while global markets have been ‘shaky’ to say the least, Dubai has proven its resilience time and time again. The city is on track for another record-breaking year, but we understand this means very little until you see its impact on your portfolio. For that reason, these updates will focus on results achieved and Stake’s plans for the future, rather than market trends and dynamics.

Annual transaction value in Dubai ($bn) – a reminder

Our Property Portfolio

As expected, this year got off to a flying start in terms of adding new properties to our portfolio, and this momentum has certainly carried through the second half of the year! 

You spoke and we listened in terms of the areas our acquisition experts focused on. We are particularly excited about our new additions in La Mer, Emirates Hills, MBR City, and Arabian Ranches. To learn more about these areas and the potential valuation upside, check out our area guides here

Recent market trends have highlighted once again the demand for real estate in the prime areas of Dubai, which supports our thesis that properties in areas such as Downtown Dubai, DIFC, Dubai Marina, and Business Bay should remain a key part of our offering. With that being said, our mission has always been to provide our investors with the broadest range of properties to choose from, without compromising on quality. With this in mind, we plan on exploring new areas that deliver the same excellent results – stay tuned for more on this. As always, your feedback is vital for us here at Stake, so if there’s a new area you would be keen on investing in, then do let us know!

Dividends

In H1 of this year alone, we paid out c. AED 2.7m (c. $725k) in dividends! Our aim is always to maximize rental income across our portfolio, and therefore paying out as much as possible in dividends lies at the core of what we do at Stake. Our payout rates remain very strong (expected monthly payments were made >95% of the time), and we are still working hard towards improving this further, by minimizing vacancy and unforeseen transfer delays across our portfolio.

Quarterly dividend payments ($ ‘000)

In terms of returns achieved by our investors, the median annualized net yield across our portfolio was just under 6%. Check out how our properties performed below. 

As for the outliers on the lower end of the spectrum, these are new holiday homes that were launched in the summer months, a period which traditionally has lower occupancy and income in Dubai – performance will pick up significantly in the next few months so no need to be concerned! 

Annualized net dividend yield 
 

 

Achieving an attractive yield is our priority – we not only keep this in mind when sourcing new properties but also in how we manage them on a day-to-day basis. We understand the importance of steady cash flow, and we do what it takes to deliver that!

Occupancy

In H1 of this year alone, we paid out c. AED 2.7m (c. $725k) in dividends! Our aim is always to maximize rental income across our portfolio, and therefore paying out as much as possible in dividends lies at the core of what we do at Stake. Our payout rates remain very strong (expected monthly payments were made >95% of the time), and we are still working hard towards improving this further, by minimizing vacancy and unforeseen transfer delays across our portfolio.

Stake finished H1 with an overall occupancy rate of ~95%, which is something that we’re very proud of! Occupancy on our long-term rentals stood at ~98%, while short-term rentals were at ~80%. In terms of short-term properties, this remains above our initial projections and has shown to be particularly resilient given the lower-than-expected level of tourists in Dubai this year.  

Occupancy, as well as income, plays a key role in how we assess our asset management strategy. As long-term and short-term rental markets are ever-evolving, we ensure we are positioned to switch approaches as and when it most benefits our investors. Monitoring occupancy on a daily basis, which our property management team does diligently, helps us make these informed decisions.

Short-Term Properties

As mentioned above, our short-term properties have remained resilient in terms of occupancy, considering a dearth of supply in the market, and a less-than-expected number of tourists. Holiday homes remain a core part of our offering, and our specialists, along with our property manager partners, are constantly keeping their fingers on the pulse of the market and looking for great opportunities. Our short-term rentals currently generate an average daily rate of AED 533, which along with 80% occupancy, yields just over AED 12,500 per month. Keep in mind that we offer a diverse range of properties so there is of course a broad range of incomes. The current level is set to increase even further as we come out of the summer months and garner more reviews on Airbnb, Booking.com, and similar listing platforms, so you can expect a boost in yield as we enter the high season for tourism! 

As you are likely aware, our team works closely with designers to make sure all short-term properties are fully renovated and beautifully furnished in order to maximize bookings and income. Check out some of our notable upgrades here! We take pride in the quality of properties listed on our platform, so rest assured that our holiday homes are some of the best that Dubai has to offer. 

Capital Appreciation

We have all seen the reports of Dubai residential prices going up and up, and while this is obviously very exciting, it also has a direct impact on your portfolio value. As we conduct third-party valuations on each property semi-annually, we can track how your investment is growing in terms of capital appreciation. Alongside rental income, this appreciation is a key component of your returns. It is of course more difficult to predict, and is dependent on a number of variables, however, the average valuation increase of Stake properties is very healthy, with many properties achieving substantial overall growth.

Annualized capital appreciation 

 

As we all know, capital appreciation is the key to healthy long-term term returns in real estate and highlights the importance of viewing real estate investing as a long-term commitment. 

An Eye on the Future… 

While it’s difficult to sum up the last 6 months in a nutshell, there are many milestones we are particularly proud of. Whether that be the successful launch of our exit windows, rolling out our Golden Visa program, or even welcoming our 200,000th user to the platform, the support from the entire Stake community has been tremendous!

 As we have since the beginning, our eyes remain firmly on the future, and the second half of the year is lining up to be even more exciting! Reach out to our team at contact@getstake.com if you have any questions. 

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