Feasibility study: G+12 residential building, Dubai
Can a 2,000 m² plot carry a 100-unit residential building at a healthy margin? A one-page answer first, then the numbers behind it.
Recommendation
Proceed to concept design. At 24.1% profit on cost the scheme clears the usual 20% hurdle for mid-market residential, and stays profitable if sales prices fall 10% while build costs rise 10% (see sensitivity). The two risks to manage are the sales rate in the launch year and construction cost escalation; both are covered by an off-plan launch at month 4 and a fixed-price main contract.
1. Site and planning
- Plot 50 m × 40 m = 2,000 m², two road frontages
- Permitted floor area ratio 4.0 → 8,000 m² GFA
- Height: ground + 2 podium parking + 12 residential floors (G+P2+12)
- Setbacks assumed 6 m front, 3 m sides and rear (to be confirmed by the affection plan)
- Saleable efficiency 80% → 6,400 m² saleable
- Parking: 112 spaces over two podium levels (3,000 m²)
- Amenities: roof pool and gym, kids' area, ground-floor retail kiosk
- Built-up area incl. parking 11,000 m²
2. Unit mix and sales value
| Unit type | Units | Size m² | Saleable m² | AED / sq ft | Sales value |
|---|---|---|---|---|---|
| Studio | 40 | 40 | 1,600 | 1,300 | AED 22,388,912 |
| 1 bedroom | 48 | 72 | 3,456 | 1,220 | AED 45,384,047 |
| 2 bedroom | 12 | 112 | 1,344 | 1,150 | AED 16,636,684 |
| Total | 100 | 6,400 | 1,225 avg | AED 84,409,643 |
Prices are mid-market off-plan asking rates for comparable new launches; your study uses a dated market survey of the actual community.
3. Development cost
| Item | Basis | Amount |
|---|---|---|
| Land | Purchase price incl. transfer | AED 20,000,000 |
| Construction | 11,000 m² built-up × AED 310/sq ft | AED 36,704,899 |
| Design and site supervision | 6% of construction | AED 2,202,294 |
| Authority and service connection fees | 2% of construction | AED 734,098 |
| Construction contingency | 5% of construction | AED 1,835,245 |
| Marketing and launch | 3% of sales value | AED 2,532,289 |
| Sales commissions | 2% of sales value | AED 1,688,193 |
| Registration, escrow and admin | 1% of sales value | AED 844,096 |
| Finance | 50% of construction debt-funded, 8% p.a., 24 months | AED 1,468,196 |
| Total development cost | AED 68,009,310 |
4. Sensitivity: what if the market moves?
| Profit | Build cost −10% | Build cost as planned | Build cost +10% |
|---|---|---|---|
| Sales prices −10% | AED 12.8m | AED 8.5m | AED 4.2m |
| Sales prices as planned | AED 20.7m | AED 16.4m | AED 12.1m |
| Sales prices +10% | AED 28.6m | AED 24.3m | AED 20.0m |
Every cell stays positive: the scheme survives a combined 10% fall in prices and 10% rise in build cost.
5. Timeline and cash
- Months 0–6: concept and detailed design, authority approvals, escrow account, project registration
- Month 4: off-plan launch, 60/40 payment plan (60% during construction, 40% on handover)
- Months 6–30: construction; escrow releases against certified progress fund most of the build cost
- Month 30: completion, handover and final collections
6. Next steps
- Concept design options for the plot (see the design options sample)
- Elemental cost plan to firm up the build cost (see the cost plan sample)
- Programme and procurement plan (see the programme and bid comparison samples)
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Illustrative sample for a fictional project. Figures are indicative only and are not an offer, valuation or professional advice. Your own study uses your plot, your market data and current rates, confirmed by Mizo's team.