{
  "currency": "AED",
  "area_unit": "sqm",
  "rates": "fractions",
  "cash_flow_basis": "Annual cash flows prepared from the stated assumptions, not cash-flow exports from the application. Acquisition at time zero; operating cash at each year end; sale and loan repayment at the end of year five.",
  "exit_basis": "Capitalise NOI in year 5, not year 6; subtract 1.5% selling costs; repay AED 12m loan in equity cash flow.",
  "exclusions": [
    "Tax",
    "Capital works and replacement reserves",
    "Tenant-level lease events, incentives and recoveries",
    "Refinancing",
    "Fees beyond stated acquisition and selling costs"
  ],
  "kpi_notes": {
    "loanToValue": "Engine field uses AED 21m total acquisition cost as denominator, giving 57.14%; loan/purchase price is 60%.",
    "cashFlowYear1": "Includes the AED 12m loan advance. Use cashFlowAfterDebtYear1 for operating cash after interest.",
    "directCapValue": "Uses a separate default 10% direct-cap method. Not the selected exit yield or the DCF value; not used in the article.",
    "pvLeveraged": "Not used as equity NPV in this publication.",
    "amortization_years": "Ignored because debt is interest-only.",
    "debtCoverage": "Year-one NOI / annual interest. Excludes the maturity balloon; it is not a loan covenant test."
  },
  "cases": [
    {
      "case": "base",
      "name": "Base",
      "input": {
        "annual_expenses": 400000,
        "annual_rent": 2000000,
        "area_sqm": 2000,
        "details": {
          "acquisition_costs": 1000000,
          "amortization_years": 25,
          "comparables": [],
          "expense_growth": 0.025,
          "expense_lines": [],
          "interest_only": true,
          "interest_rate": 0.06,
          "loan_amount": 12000000,
          "loan_term_years": 5,
          "property_type": "Office",
          "rent_growth": 0.02,
          "rent_roll": [],
          "selling_cost_rate": 0.015,
          "template_id": "quick-income",
          "vacancy_rate": 0.05
        },
        "discount_rate": 0.08,
        "exit_cap_rate": 0.075,
        "hold_years": 5,
        "name": "Base",
        "purchase_price": 20000000,
        "start_year": 2027
      },
      "engine_kpis": {
        "adoptedValuation": 20635390.26386123,
        "buildingAreaYear1": 2000,
        "cashFlowAfterDebtYear1": 780000,
        "cashFlowYear1": 12780000,
        "cashOnCashYieldLeveraged": 0.08666666666666667,
        "cashOnCashYieldUnleveraged": 0.07142857142857147,
        "cashToPurchasePriceYear1": 0.07142857142857142,
        "debtAmount": 12000000,
        "debtCoverage": 2.083333333333335,
        "directCapFactor": 10,
        "directCapValue": 15000000.00000001,
        "effectiveGrossRevenueYear1": 1900000.0000000012,
        "equity": 9000000,
        "irrLeveraged": 0.09629728695448983,
        "irrUnleveraged": 0.07567725319473606,
        "loanToPresentValue": 0.5815252266401574,
        "loanToValue": 0.5714285714285714,
        "netOiYield": 0.07142857142857147,
        "noiAnnual": [
          1500000.0000000014,
          1528000,
          1556510.0000000072,
          1585538.949999998,
          1615095.9477499963
        ],
        "noiYear1": 1500000.000000001,
        "occupancyGrossupAdjustment": 0,
        "operatingExpenseRateYear1": -200,
        "operatingExpenseYear1": -400000,
        "purchasePrice": 20000000,
        "pvLeveraged": 21593640.672759976,
        "pvNetSalePrice": 14436254.211423414,
        "pvOfCashflow": 6199136.052437819,
        "pvUnleveraged": 20635390.26386123,
        "totalDebtServiceYear1": -720000
      },
      "annual_reconciliation": [
        {
          "period": "Acquisition",
          "year": 2027,
          "gross_rent": 0,
          "vacancy_loss": 0,
          "operating_costs": 0,
          "noi": 0,
          "interest": 0,
          "purchase": -20000000,
          "acquisition_costs": -1000000,
          "loan_advance": 12000000,
          "gross_sale": 0,
          "selling_costs": 0,
          "loan_repayment": 0,
          "property_cash_flow": -21000000,
          "equity_cash_flow": -9000000
        },
        {
          "period": "Year end",
          "year": 2027,
          "gross_rent": 2000000.0,
          "vacancy_loss": -100000.0,
          "operating_costs": -400000.0,
          "noi": 1500000.0,
          "interest": -720000.0,
          "purchase": 0,
          "acquisition_costs": 0,
          "loan_advance": 0,
          "gross_sale": 0,
          "selling_costs": -0.0,
          "loan_repayment": 0,
          "property_cash_flow": 1500000.0,
          "equity_cash_flow": 780000.0
        },
        {
          "period": "Year end",
          "year": 2028,
          "gross_rent": 2040000.0,
          "vacancy_loss": -102000.0,
          "operating_costs": -409999.99999999994,
          "noi": 1528000.0,
          "interest": -720000.0,
          "purchase": 0,
          "acquisition_costs": 0,
          "loan_advance": 0,
          "gross_sale": 0,
          "selling_costs": -0.0,
          "loan_repayment": 0,
          "property_cash_flow": 1528000.0,
          "equity_cash_flow": 808000.0
        },
        {
          "period": "Year end",
          "year": 2029,
          "gross_rent": 2080800.0,
          "vacancy_loss": -104040.0,
          "operating_costs": -420249.99999999994,
          "noi": 1556510.0,
          "interest": -720000.0,
          "purchase": 0,
          "acquisition_costs": 0,
          "loan_advance": 0,
          "gross_sale": 0,
          "selling_costs": -0.0,
          "loan_repayment": 0,
          "property_cash_flow": 1556510.0,
          "equity_cash_flow": 836510.0
        },
        {
          "period": "Year end",
          "year": 2030,
          "gross_rent": 2122416.0000000005,
          "vacancy_loss": -106120.80000000003,
          "operating_costs": -430756.2499999999,
          "noi": 1585538.9500000007,
          "interest": -720000.0,
          "purchase": 0,
          "acquisition_costs": 0,
          "loan_advance": 0,
          "gross_sale": 0,
          "selling_costs": -0.0,
          "loan_repayment": 0,
          "property_cash_flow": 1585538.9500000007,
          "equity_cash_flow": 865538.9500000007
        },
        {
          "period": "Year end",
          "year": 2031,
          "gross_rent": 2164864.32,
          "vacancy_loss": -108243.216,
          "operating_costs": -441525.1562499998,
          "noi": 1615095.94775,
          "interest": -720000.0,
          "purchase": 0,
          "acquisition_costs": 0,
          "loan_advance": 0,
          "gross_sale": 21534612.636666667,
          "selling_costs": -323019.18955,
          "loan_repayment": -12000000,
          "property_cash_flow": 22826689.394866664,
          "equity_cash_flow": 10106689.394866664
        }
      ]
    },
    {
      "case": "vacancy",
      "name": "Higher vacancy",
      "input": {
        "annual_expenses": 400000,
        "annual_rent": 2000000,
        "area_sqm": 2000,
        "details": {
          "acquisition_costs": 1000000,
          "amortization_years": 25,
          "comparables": [],
          "expense_growth": 0.025,
          "expense_lines": [],
          "interest_only": true,
          "interest_rate": 0.06,
          "loan_amount": 12000000,
          "loan_term_years": 5,
          "property_type": "Office",
          "rent_growth": 0.02,
          "rent_roll": [],
          "selling_cost_rate": 0.015,
          "template_id": "quick-income",
          "vacancy_rate": 0.15
        },
        "discount_rate": 0.08,
        "exit_cap_rate": 0.075,
        "hold_years": 5,
        "name": "Higher vacancy",
        "purchase_price": 20000000,
        "start_year": 2027
      },
      "engine_kpis": {
        "adoptedValuation": 17871759.910561502,
        "buildingAreaYear1": 2000,
        "cashFlowAfterDebtYear1": 580000,
        "cashFlowYear1": 12580000,
        "cashOnCashYieldLeveraged": 0.06444444444444444,
        "cashOnCashYieldUnleveraged": 0.06190476190476191,
        "cashToPurchasePriceYear1": 0.06190476190476191,
        "debtAmount": 12000000,
        "debtCoverage": 1.8055555555555556,
        "directCapFactor": 10,
        "directCapValue": 13000000,
        "effectiveGrossRevenueYear1": 1700000.0000000007,
        "equity": 9000000,
        "irrLeveraged": 0.012802963345247617,
        "irrUnleveraged": 0.041049522810282055,
        "loanToPresentValue": 0.6714503809391752,
        "loanToValue": 0.5714285714285714,
        "netOiYield": 0.06190476190476191,
        "noiAnnual": [
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          1324000.0000000005,
          1348430.000000004,
          1373297.3499999929,
          1398609.5157500037
        ],
        "noiYear1": 1300000,
        "occupancyGrossupAdjustment": 0,
        "operatingExpenseRateYear1": -200,
        "operatingExpenseYear1": -400000,
        "purchasePrice": 20000000,
        "pvLeveraged": 18830010.319460254,
        "pvNetSalePrice": 12501227.71537219,
        "pvOfCashflow": 5370532.195189312,
        "pvUnleveraged": 17871759.910561502,
        "totalDebtServiceYear1": -720000
      },
      "annual_reconciliation": [
        {
          "period": "Acquisition",
          "year": 2027,
          "gross_rent": 0,
          "vacancy_loss": 0,
          "operating_costs": 0,
          "noi": 0,
          "interest": 0,
          "purchase": -20000000,
          "acquisition_costs": -1000000,
          "loan_advance": 12000000,
          "gross_sale": 0,
          "selling_costs": 0,
          "loan_repayment": 0,
          "property_cash_flow": -21000000,
          "equity_cash_flow": -9000000
        },
        {
          "period": "Year end",
          "year": 2027,
          "gross_rent": 2000000.0,
          "vacancy_loss": -300000.0,
          "operating_costs": -400000.0,
          "noi": 1300000.0,
          "interest": -720000.0,
          "purchase": 0,
          "acquisition_costs": 0,
          "loan_advance": 0,
          "gross_sale": 0,
          "selling_costs": -0.0,
          "loan_repayment": 0,
          "property_cash_flow": 1300000.0,
          "equity_cash_flow": 580000.0
        },
        {
          "period": "Year end",
          "year": 2028,
          "gross_rent": 2040000.0,
          "vacancy_loss": -306000.0,
          "operating_costs": -409999.99999999994,
          "noi": 1324000.0,
          "interest": -720000.0,
          "purchase": 0,
          "acquisition_costs": 0,
          "loan_advance": 0,
          "gross_sale": 0,
          "selling_costs": -0.0,
          "loan_repayment": 0,
          "property_cash_flow": 1324000.0,
          "equity_cash_flow": 604000.0
        },
        {
          "period": "Year end",
          "year": 2029,
          "gross_rent": 2080800.0,
          "vacancy_loss": -312120.0,
          "operating_costs": -420249.99999999994,
          "noi": 1348430.0,
          "interest": -720000.0,
          "purchase": 0,
          "acquisition_costs": 0,
          "loan_advance": 0,
          "gross_sale": 0,
          "selling_costs": -0.0,
          "loan_repayment": 0,
          "property_cash_flow": 1348430.0,
          "equity_cash_flow": 628430.0
        },
        {
          "period": "Year end",
          "year": 2030,
          "gross_rent": 2122416.0000000005,
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          "operating_costs": -430756.2499999999,
          "noi": 1373297.3500000006,
          "interest": -720000.0,
          "purchase": 0,
          "acquisition_costs": 0,
          "loan_advance": 0,
          "gross_sale": 0,
          "selling_costs": -0.0,
          "loan_repayment": 0,
          "property_cash_flow": 1373297.3500000006,
          "equity_cash_flow": 653297.3500000006
        },
        {
          "period": "Year end",
          "year": 2031,
          "gross_rent": 2164864.32,
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          "operating_costs": -441525.1562499998,
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          "purchase": 0,
          "acquisition_costs": 0,
          "loan_advance": 0,
          "gross_sale": 18648126.87666667,
          "selling_costs": -279721.90315,
          "loan_repayment": -12000000,
          "property_cash_flow": 19767014.489266668,
          "equity_cash_flow": 7047014.4892666675
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      ]
    },
    {
      "case": "exit-yield",
      "name": "Softer exit yield",
      "input": {
        "annual_expenses": 400000,
        "annual_rent": 2000000,
        "area_sqm": 2000,
        "details": {
          "acquisition_costs": 1000000,
          "amortization_years": 25,
          "comparables": [],
          "expense_growth": 0.025,
          "expense_lines": [],
          "interest_only": true,
          "interest_rate": 0.06,
          "loan_amount": 12000000,
          "loan_term_years": 5,
          "property_type": "Office",
          "rent_growth": 0.02,
          "rent_roll": [],
          "selling_cost_rate": 0.015,
          "template_id": "quick-income",
          "vacancy_rate": 0.05
        },
        "discount_rate": 0.08,
        "exit_cap_rate": 0.09,
        "hold_years": 5,
        "name": "Softer exit yield",
        "purchase_price": 20000000,
        "start_year": 2027
      },
      "engine_kpis": {
        "adoptedValuation": 18229347.554999065,
        "buildingAreaYear1": 2000,
        "cashFlowAfterDebtYear1": 780000,
        "cashFlowYear1": 12780000,
        "cashOnCashYieldLeveraged": 0.08666666666666667,
        "cashOnCashYieldUnleveraged": 0.07142857142857147,
        "cashToPurchasePriceYear1": 0.07142857142857142,
        "debtAmount": 12000000,
        "debtCoverage": 2.083333333333335,
        "directCapFactor": 10,
        "directCapValue": 15000000.00000001,
        "effectiveGrossRevenueYear1": 1900000.0000000012,
        "equity": 9000000,
        "irrLeveraged": 0.02221254647179605,
        "irrUnleveraged": 0.045098747609388264,
        "loanToPresentValue": 0.6582791821701386,
        "loanToValue": 0.5714285714285714,
        "netOiYield": 0.07142857142857147,
        "noiAnnual": [
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          1528000,
          1556510.0000000072,
          1585538.949999998,
          1615095.9477499963
        ],
        "noiYear1": 1500000.000000001,
        "occupancyGrossupAdjustment": 0,
        "operatingExpenseRateYear1": -200,
        "operatingExpenseYear1": -400000,
        "purchasePrice": 20000000,
        "pvLeveraged": 19187597.96389781,
        "pvNetSalePrice": 12030211.502561247,
        "pvOfCashflow": 6199136.052437819,
        "pvUnleveraged": 18229347.554999065,
        "totalDebtServiceYear1": -720000
      },
      "annual_reconciliation": [
        {
          "period": "Acquisition",
          "year": 2027,
          "gross_rent": 0,
          "vacancy_loss": 0,
          "operating_costs": 0,
          "noi": 0,
          "interest": 0,
          "purchase": -20000000,
          "acquisition_costs": -1000000,
          "loan_advance": 12000000,
          "gross_sale": 0,
          "selling_costs": 0,
          "loan_repayment": 0,
          "property_cash_flow": -21000000,
          "equity_cash_flow": -9000000
        },
        {
          "period": "Year end",
          "year": 2027,
          "gross_rent": 2000000.0,
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          "interest": -720000.0,
          "purchase": 0,
          "acquisition_costs": 0,
          "loan_advance": 0,
          "gross_sale": 0,
          "selling_costs": -0.0,
          "loan_repayment": 0,
          "property_cash_flow": 1500000.0,
          "equity_cash_flow": 780000.0
        },
        {
          "period": "Year end",
          "year": 2028,
          "gross_rent": 2040000.0,
          "vacancy_loss": -102000.0,
          "operating_costs": -409999.99999999994,
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          "purchase": 0,
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          "loan_repayment": 0,
          "property_cash_flow": 1528000.0,
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        },
        {
          "period": "Year end",
          "year": 2029,
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          "purchase": 0,
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        },
        {
          "period": "Year end",
          "year": 2030,
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          "purchase": 0,
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        },
        {
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          "property_cash_flow": 19291423.820347223,
          "equity_cash_flow": 6571423.820347223
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      ]
    },
    {
      "case": "combined",
      "name": "Combined downside",
      "input": {
        "annual_expenses": 400000,
        "annual_rent": 2000000,
        "area_sqm": 2000,
        "details": {
          "acquisition_costs": 1000000,
          "amortization_years": 25,
          "comparables": [],
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          "expense_lines": [],
          "interest_only": true,
          "interest_rate": 0.06,
          "loan_amount": 12000000,
          "loan_term_years": 5,
          "property_type": "Office",
          "rent_growth": 0.02,
          "rent_roll": [],
          "selling_cost_rate": 0.015,
          "template_id": "quick-income",
          "vacancy_rate": 0.15
        },
        "discount_rate": 0.08,
        "exit_cap_rate": 0.09,
        "hold_years": 5,
        "name": "Combined downside",
        "purchase_price": 20000000,
        "start_year": 2027
      },
      "engine_kpis": {
        "adoptedValuation": 15788221.731138404,
        "buildingAreaYear1": 2000,
        "cashFlowAfterDebtYear1": 580000,
        "cashFlowYear1": 12580000,
        "cashOnCashYieldLeveraged": 0.06444444444444444,
        "cashOnCashYieldUnleveraged": 0.06190476190476191,
        "cashToPurchasePriceYear1": 0.06190476190476191,
        "debtAmount": 12000000,
        "debtCoverage": 1.8055555555555556,
        "directCapFactor": 10,
        "directCapValue": 13000000,
        "effectiveGrossRevenueYear1": 1700000.0000000007,
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        "irrLeveraged": -0.07733497394054493,
        "irrUnleveraged": 0.011186167002992256,
        "loanToPresentValue": 0.7600602654530076,
        "loanToValue": 0.5714285714285714,
        "netOiYield": 0.06190476190476191,
        "noiAnnual": [
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        ],
        "noiYear1": 1300000,
        "occupancyGrossupAdjustment": 0,
        "operatingExpenseRateYear1": -200,
        "operatingExpenseYear1": -400000,
        "purchasePrice": 20000000,
        "pvLeveraged": 16746472.140037157,
        "pvNetSalePrice": 10417689.535949092,
        "pvOfCashflow": 5370532.195189312,
        "pvUnleveraged": 15788221.731138404,
        "totalDebtServiceYear1": -720000
      },
      "annual_reconciliation": [
        {
          "period": "Acquisition",
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          "purchase": -20000000,
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          "gross_sale": 0,
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          "property_cash_flow": -21000000,
          "equity_cash_flow": -9000000
        },
        {
          "period": "Year end",
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          "gross_rent": 2000000.0,
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          "property_cash_flow": 1300000.0,
          "equity_cash_flow": 580000.0
        },
        {
          "period": "Year end",
          "year": 2028,
          "gross_rent": 2040000.0,
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          "interest": -720000.0,
          "purchase": 0,
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          "loan_repayment": 0,
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        },
        {
          "period": "Year end",
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          "gross_rent": 2080800.0,
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          "operating_costs": -420249.99999999994,
          "noi": 1348430.0,
          "interest": -720000.0,
          "purchase": 0,
          "acquisition_costs": 0,
          "loan_advance": 0,
          "gross_sale": 0,
          "selling_costs": -0.0,
          "loan_repayment": 0,
          "property_cash_flow": 1348430.0,
          "equity_cash_flow": 628430.0
        },
        {
          "period": "Year end",
          "year": 2030,
          "gross_rent": 2122416.0000000005,
          "vacancy_loss": -318362.4000000001,
          "operating_costs": -430756.2499999999,
          "noi": 1373297.3500000006,
          "interest": -720000.0,
          "purchase": 0,
          "acquisition_costs": 0,
          "loan_advance": 0,
          "gross_sale": 0,
          "selling_costs": -0.0,
          "loan_repayment": 0,
          "property_cash_flow": 1373297.3500000006,
          "equity_cash_flow": 653297.3500000006
        },
        {
          "period": "Year end",
          "year": 2031,
          "gross_rent": 2164864.32,
          "vacancy_loss": -324729.648,
          "operating_costs": -441525.1562499998,
          "noi": 1398609.51575,
          "interest": -720000.0,
          "purchase": 0,
          "acquisition_costs": 0,
          "loan_advance": 0,
          "gross_sale": 15540105.730555557,
          "selling_costs": -233101.58595833334,
          "loan_repayment": -12000000,
          "property_cash_flow": 16705613.660347221,
          "equity_cash_flow": 3985613.6603472233
        }
      ]
    }
  ],
  "title": "Office acquisition: assumptions and results",
  "fictional": true
}