Commercial Property Value Estimator

Calculation

You choose an asset type — office, retail or warehouse — and a location. You enter the gross annual rent, the net leasable floor area, and the building’s service charge as a rate in dirhams per square foot per year. The tool multiplies that rate by the area to get the annual service charge, deducts it from the rent to build net operating income, applies the indicative cap-rate range held for that asset type and location, and returns an estimated value range — never a single figure — along with an implied gross yield range and a value per square foot. The two ends come from the two ends of the cap-rate band, and both cap rates are shown beside the values they produce. It runs entirely in your browser from the figures you enter.

• Annual service chargerate per sq ft × leasable area
• Net operating incomegross annual rent − annual service charge
• Market valuenet operating income ÷ cap rate
• High estimateNOI ÷ the lower cap rate in the range
• Low estimateNOI ÷ the higher cap rate in the range
• Value per sq ftestimated value ÷ leasable area
• Implied gross yieldgross rent ÷ each end of the value range × 100

A note on the inputs. The tool asks for gross rent and the service charge rather than for net income directly. That is deliberate. Many landlords do not account for the service charge when calculating net income, which produces inflated valuations; building the net figure inside the tool makes the deduction visible instead of optional. The rate itself opens BLANK, because there is no citywide Dubai service-charge rate for us to prefill — the reliable figure is the RERA-approved rate for your specific building, which the Mollak Service Charge Index publishes per square foot and which is searchable by project on Mollak, the Dubai Land Department website or the Dubai REST app. Until that rate and a leasable area are both entered, the value is withheld rather than estimated. That is a deliberate withholding, not an oversight.

The service charge is the only cost deducted. On most Dubai commercial lettings the tenant carries their own running costs — utilities, cleaning, their own fit-out — and the service charge is the operating line that stays with the owner: Article 16 of Law No. (6) of 2019 leaves an owner liable for it even where the tenant does not pay. A blanket percentage of rent charged the landlord for costs the tenant was already meeting. The service charge is also the only one of these costs that is published per building, which is exactly why it can be asked for honestly and a market ratio cannot. Two consequences worth holding onto. First, if your lease genuinely leaves other costs with the owner — insurance you carry, a management fee, an empty unit’s utilities — deduct them from the rent you enter, because the tool will not. Second, leases differ: base rent in Dubai is typically quoted exclusive of service charge, and where a lease recharges the whole service charge to the tenant, or where a whole-building title carries no Mollak charge for its own internal parts, the owner’s figure may be nil. Check the lease line by line rather than assuming the allocation from the headline rent.

Cap rates and NOI

A capitalisation rate is the metric used to assess the market value of income-producing real estate. In simple terms it tells you how much an investor is willing to pay for a property based on the annual income it generates: the cap rate is net operating income divided by market value. To estimate value from a cap rate, the formula is inverted — market value equals net operating income divided by the cap rate. A property earning AED 800,000 a year in a market pricing at an 8% cap rate carries an estimated market value of AED 10,000,000. That is the arithmetic at one rate, and it is the only place on this page a single rate is used: no market prices at exactly one cap rate, so the estimator runs the same division at both ends of an indicative band and returns both values — never their average.

Net operating income is, in general, the annual income a property generates after operating expenses but before tax, debt service or depreciation — expenses that can include service charges, property management fees, maintenance and insurance, but never mortgage payments or taxes, because putting finance costs into operating costs understates NOI and undervalues the asset. What this tool deducts is narrower and deliberately so: the service charge alone, for the reasons set out above. If other costs genuinely fall to you as owner, take them off the rent before you enter it.

Example

The form arrives set to an office in DIFC, AED 900,000 of gross annual rent, and 5,000 sq ft of leasable area — but the service-charge field itself opens BLANK, because there is no citywide rate to prefill it with. To show how the method works, suppose Mollak returned AED 18 per square foot a year for the building — a figure used here only to carry the arithmetic, not a rate for DIFC offices, not a rate this tool suggests, and not a market average. AED 18 across 5,000 sq ft is an annual service charge of AED 90,000, so net operating income would be AED 810,000. The DIFC office range held in the tool is 6.0% to 7.5%, and both ends of that band are used.

1. The lower cap rate gives the higher value, which is the part most people reverse. AED 810,000 divided by 6.0% gives AED 13,500,000 — AED 2,700 per square foot, and an implied gross yield of 6.67% on the AED 900,000 rent.
2. The higher cap rate gives the lower value. AED 810,000 divided by 7.5% gives AED 10,800,000 — AED 2,160 per square foot, and an implied gross yield of 8.33%.
3. The answer is those two numbers together: an indicative AED 10,800,000 to AED 13,500,000. There is deliberately no midpoint. A midpoint of an indicative band is not a rate anyone published — it is the average of two estimates, wearing the confidence of a measurement.

That spread — AED 10.8m to AED 13.5m on identical income — is the point of the cap-rate half of the exercise. A cap rate a point and a half wide moves value by AED 2.7m, which is why the tool refuses to give you a single number. Now hold the cap rate still and move the service charge instead. At AED 3 per square foot — the bottom of the range commonly reported across Dubai stock — the annual charge is AED 15,000, net operating income is AED 885,000, and the range is AED 11,800,000 to AED 14,750,000. At AED 30 the charge is AED 150,000, NOI falls to AED 750,000, and the range drops to AED 10,000,000 to AED 12,500,000. The whole range moves down by roughly two million dirhams — AED 1.8m at its low end, AED 2.25m at its high end — on rent that has not changed at all, decided entirely by which building you are in. That is exactly why the field is not prefilled: whatever rate sat there by default would be silently deciding two million dirhams of value on your behalf. Look the building up on Mollak and use its approved rate, not this example’s AED 18.

Cap rates in Dubai

Cap rates vary across districts, asset types and property profiles. High-footfall retail in Dubai Marina or Downtown does not price like office space in an emerging zone, and the tool holds a separate range for each combination it covers. The factors that move a cap rate are:

• Prime or fringe location
• Lease terms and tenant quality
• Vacancy risk
• Market comparables
• The future development pipeline
• Supply and demand dynamics

In Dubai, professional valuers adhere to RICS standards — the Royal Institution of Chartered Surveyors — which form the benchmark for bank-led and institutional property valuations. This tool applies the same income logic those valuations use, at a level of precision appropriate to a free calculator rather than to a signed report.

Coverage

The tool covers Dubai’s primary freehold commercial zones across the three asset types, and other districts are deliberately excluded where reliable, up-to-date public data is not available. Coverage expands as transparent cap-rate data appears for more districts. The ranges themselves are indicative, compiled from published research and tiered by location: office space in DIFC and Business Bay, and the core industrial zones, rest on the firmest evidence, while other zones are mapped by tier to a sourced citywide anchor. Retail is the thinnest set of all — no major research house publishes a Dubai retail cap rate series — so retail outputs should be treated as provisional.

Risks

Valuing commercial real estate in Dubai is not always straightforward. These are the pitfalls that most often produce a number that is confidently wrong:

• Incomplete or inconsistent NOI data. Many landlords do not account for the service charge when calculating net income, resulting in inflated valuations. The service-charge field exists to stop that happening here — and it opens blank rather than on a guessed rate, so the deduction always reflects a figure you actually entered. It is also the only cost the tool takes off: anything else your lease leaves with you has to come off the rent before you type it in.
• Misinterpreted cap rates. Cap rates vary significantly between otherwise comparable properties depending on lease length, covenant strength or physical condition. A range taken from an area average will not capture what is specific about your building.
• Overlooked regulatory constraints. Zoning rules, licensing requirements and permitted business uses can restrict rental potential in ways no income model sees.
• Unaccounted vacancy periods. If a unit has been empty or let on rent-free terms, the true income may differ materially from the advertised rent you typed into the form.
• Variable service charges. High service charges drastically reduce NOI and skew yield expectations, and the rate is not fixed for good: it moves with an annual budget approved collectively through the owners’ association, so last year’s approved rate is not necessarily next year’s. Take the current year’s figure from Mollak rather than an older statement, and check the building’s reserve fund before assuming the rate will hold.
• Not a RICS valuation. It is an indicative, income-based estimate. A formal RICS-compliant valuation is required for financing, insurance or contract, and nothing here substitutes for one.

Audience

It is for the owner working out whether an offer on their unit is in the right region before engaging a valuer; for the buyer sense-checking an asking price against the income the asset actually produces; for the investor comparing two buildings in different districts, where the cap rate does more work than the price per square foot; and for anyone preparing to speak to a bank, who wants to understand the method a valuer will use before the report lands. We have been advising on Dubai commercial property since 2007, and we are happy to look at the specifics behind whatever number this tool has just given you.