What to take into your next appraisal
- Contract value, money received and cash available for construction are different balances.
- Link a release assumption to project-specific bank and regulatory evidence.
- Test slower releases independently from slower sales.
Start with the registered project
Dubai Land Department describes project registration and opening an escrow account as linked services through Oqood. Its document requirements include consultant details, approvals and, where relevant, an agreement between the landowner and developer. Use the project registration record to identify the correct account and legal project before modelling receipts.
A registration requirement is not a general permission to withdraw the same percentage of buyer funds. Obtain the applicable account agreement, release procedure, certification requirements and any required developer contribution. Record who confirms each condition and when the model last checked it.
Build two cash ledgers
The restricted ledger starts with opening escrow cash, adds buyer receipts and subtracts authorised payments, transfers and refunds. The operating ledger includes only cash actually available to pay the costs assigned to it. Some permitted payments may go directly from escrow to a contractor, without passing through the developer operating account.
Show those direct payments as a project funding source and a project cost payment on the same date. Do not also treat them as an unrestricted transfer: that would create two sources from one release.
Worked example: a collection is not a release
Assume a fictional project starts a quarter with no escrow balance. Buyers pay AED 3m. Certified project payments of AED 1.8m are approved and paid directly from escrow during the quarter. Another AED 0.9m of due costs must be paid by the developer. No other withdrawals, refunds or opening balances are assumed.
Total paid costs are AED 2.7m. Buyer receipts exceed those costs, but the developer still needs AED 0.9m because AED 1.2m remains restricted. A single net-cash row would wrongly show AED 0.3m surplus. The usable funding schedule exposes the shortfall.
| Quarter movement | Restricted escrow | Operating cash |
|---|---|---|
| Buyer collections | +AED 3.0m | AED 0 |
| Authorised direct contractor payment | −AED 1.8m | AED 0 |
| Developer equity | AED 0 | +AED 0.9m |
| Other due costs | AED 0 | −AED 0.9m |
| Closing balance | AED 1.2m | AED 0 |
Stress the approval clock
Move the AED 1.8m release one quarter later while leaving construction invoices due. If the contract requires payment on the original dates, temporary replacement funding rises by AED 1.8m. Add its fees and interest explicitly. If construction pauses instead, move the delivery milestone and assess the knock-on collections separately.
Do not assume a lender will bridge restricted receipts without checking security, draw conditions and permitted repayment. Cash in escrow is evidence of a balance, not evidence of an available credit line.
Close the model against evidence
Reconcile the buyer ledger to the escrow bank statement and the project payment ledger to certification records. List pending approvals separately from approved unpaid releases. At each forecast date, a reader should be able to identify the cash owner, restriction, expected release date and evidence supporting that date.
- Opening restricted cash + receipts − payments − refunds = closing restricted cash.
- Direct escrow payments appear once in sources and once in uses.
- Unreleased balances do not reduce peak equity unless an evidenced funding mechanism permits it.
- Project registration conditions and release conditions have separate source references.
Sources and further reading
- Register Project Dubai Land Department
- Valuation of development property RICS
Published by Feasly. How we prepare our guides. Suggest a correction.
