What to take into your next appraisal
- Name the area measure used for each calculation.
- Calculate unit count and area totals before applying prices.
- Test a revised mix through cost, absorption and cash timing as well as revenue.
Keep the area definitions explicit
Separate plot area, permitted gross floor area, constructed area, apartment internal area, balconies and any registered or chargeable sale area. Do not assume these measures are identical. Confirm the applicable definitions with the project team and the relevant approval and sales documents.
DLD transaction data distinguishes transaction size and property size in square metres. That makes denominator choice important when comparing recorded prices to a new unit schedule. A price per square metre is only comparable when the area basis is understood.
Reconcile one apartment schedule
Use one row per unit type, with unit count, area per unit and net price. Multiply count by area and price before aggregating. Keep parking or other separately priced items distinct. If balconies are priced differently, show their contribution rather than embedding it in an unexplained blended rate.
Efficiency should name its numerator and denominator. Apartment area divided by constructed area answers a different question from permitted gross floor area divided by plot area. Show both where useful and avoid comparing them as if they were one metric.
Worked example: a 60-apartment design
Assume 40 one-bedroom apartments at 70 sq m and 20 two-bedroom apartments at 110 sq m. Total apartment sale area is 5,000 sq m. If constructed area is 7,000 sq m, the explicitly defined sale-area efficiency is 71.43%. These are invented dimensions and prices.
At AED 16,000 per sq m for one-bedroom units and AED 14,500 for two-bedroom units, gross revenue is AED 76.7m. Pricing all 7,000 constructed square metres at the weighted sale rate would invent 2,000 sq m of revenue-generating area.
| Type | Units | Sale area | Revenue |
|---|---|---|---|
| One bedroom | 40 | 2,800 sq m | AED 44.80m |
| Two bedroom | 20 | 2,200 sq m | AED 31.90m |
| Total | 60 | 5,000 sq m | AED 76.70m |
Evaluate a change of mix as a new design
Replacing ten 70 sq m units with six 110 sq m units reduces unit count by four and sale area by 40 sq m. At the same assumed rates, revenue removed is AED 11.2m and revenue added is AED 9.57m, a reduction of AED 1.63m. That is only the revenue side of the decision.
Reprice kitchens, bathrooms, parking, common areas and consultant work. Assess whether the replacement units sell faster or slower and when their cash arrives. The best unit mix for gross revenue can require more equity or carry more unsold inventory.
Control changes between design and sales
Assign a unit identifier that persists through the area schedule, price list, contract record and settlement forecast. Flag any unit sold under an earlier area revision. Reconcile sold, available, reserved and withdrawn units to the full inventory.
Keep the project’s design revision and comparable-evidence date next to the headline revenue. A committee can then distinguish a genuine price improvement from a silent change in the measured area.
Sources and further reading
- Real Estate Data Dubai Land Department
- Valuation of development property RICS
Published by Feasly. How we prepare our guides. Suggest a correction.
