Estater

Mixed Use Master Plan Project

A large master plan project is conceptualized with the development mix including properties in all sectors – residential, commercial, retail, hospitality, etc. in Kuwait. Further, the segmentation of properties into suitable grades such as luxury, premium, standard, etc. is to be done keeping in mind the market absorption capacity. Overall, the objective is to achieve the highest economic value for the project.

REMI Solution

With extensive data on properties from all sectors, REMI was able to create detailed analysis on every sector of Kuwait real estate:

  • Historical data was analyzed to establish trends on occupancy, prices, unit sizes, property features, etc.

  • Market benchmarks were created to identify the sectors and property grades with superior market potential.

  • Long term projections were created using macro-economic, real estate data and demographic data.

  • Sectoral allocation were estimated using robust methodology. Segmentation and property grades were done for every sector.

  • Comparable price approach and residual value analysis were used to establish the prices for different lands.

  • Simulation analysis done to identify the develop mix that offers the highest economic value.

Bidding for a Commercial Project by Public Authority of Housing Welfare

A prominent property developer is looking to bid for a new commercial project offered by Public Authority of Housing Welfare (PAHW) on Public Private Partnership (PPP) model in a new city in Kuwait. The bidding process is highly competitive; the bid involves cash flow projections for the next 35 years. Deep market analysis is required to understand the demographic potential of the catchment and the revenue potential of the subject property.

REMI Solution

REMI has build-up extensive data on properties and demographic for all districts of Kuwait. REMI was able to create detailed analysis that helped the client project the revenue from the property over a very long term period and estimate a winning bid:

  • Lease rates of the commercial properties for any catchment is closely linked to the purchasing power of the resident / visiting population. Thus, the demographic analysis included the population, its nationality mix and socio-economic profile.

  • Long term projections were created using macro-economic, real estate data and demographic data.

  • Comparable commercial properties were analyzed for their occupancy, lease rates and tenant mix to establish the demand for various segments.

  • Based on the design, unit mix and tenant mix, the subject property positioning was determined within the urban context. Achievable lease rates for all units were established.

  • Long term projections for the lease rates were created and a winning bid for the client was identified.

Highest and Best Use Study

A prominent real estate company has a land parcel in a prime location in Bahrain with some untapped Floor Area Ratio (FAR). Given the catchment of the land, multiple development options are possible. A highest and best use (HBU) analysis is required to select an appropriate development option and carry out the financial feasibility to estimate the project returns.

REMI Solution

The subject catchment is one of the prime business districts in Bahrain with commercial, hospitality and retail properties around it. Data on all sectors was analyzed to identify the sectors that offer attractive market opportunities. Financial models for each option were created with projections of project cost, revenue, cash flows, IRR, capital mix and return analysis:

  • HBU involves detailed analysis of every possible development option. This covers the market demand, competitive supply, price points and sustainability analysis.

  • Comparative analysis leads to selection of a few development mix options that offer reasonably good cost-benefit profile.

  • Each of these options are then analyzed in further details for their market viability and financial feasibility.

  • HBU ranks different options as per their market viability and financial feasibility. The client selects the most suitable option based on multiple internal constraints.