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Phase 2 — Capital Strategy
Renovation Advisory & ROI Study
Al Noor Residences | Al Nahda, Sharjah
Reference
SVC-REN-2025-00187
Linked Snagging
SVC-SNG-2025-00412
Report Date
12 February 2025
Year Built
2017
Client
Al Manara Real Estate LLC
Contact
Mr. Khalid Al Hashimi
Property Type
Residential Building (G+5)
Units
24
1. Executive Summary
Following the Asset Health inspection (Ref: SVC-SNG-2025-00412), this Renovation Advisory study converts the technical findings into a financial strategy. Al Noor Residences is currently underperforming its market segment by approximately AED 432,000/year in potential revenue, driven by below-market rents (14.6% gap), low occupancy (79% vs. 91% benchmark), and excessive operating costs.
We present three investment scenarios ranging from AED 89,400 (Essential Remediation) to AED 620,000 (Premium Repositioning), each modeled with projected NOI improvement, payback period, and 5-year IRR. All scenarios deliver payback within 12 months, demonstrating that every dirham invested in this asset generates strong returns through a combination of rent uplift, vacancy reduction, and operating cost savings.
2. Current Baseline Performance
Annual Rent
AED 1,680,000
79% occupancy
Avg Rent / Unit
AED 70,000
Market: AED 82,000
Annual NOI
AED 943,200
Before renovation
Rent Gap
-14.6%
Below market average
3. Performance Diagnosis
| Metric | Current | Benchmark | Gap | Financial Impact | Priority |
|---|---|---|---|---|---|
| Occupancy Rate | 79% | 91% | -12% | AED 201,600 lost rent/year | HIGH |
| Avg. Rent / Unit | AED 70,000 | AED 82,000 | -14.6% | AED 230,400 below market/year | HIGH |
| Utility Cost / sqm | AED 48/sqm | AED 32/sqm | +50% | AED 64,000 excess/year | MEDIUM |
| OPEX Ratio | 22.9% | 18% | +4.9% | AED 82,300 excess/year | MEDIUM |
| Asset Health Score | 6.2/10 | 8.0/10 | -1.8 | Tenant retention risk | HIGH |
| Tenant Satisfaction | 62% | 80% | -18% | Higher turnover costs | MEDIUM |
4. Scenario 1: Essential Remediation
Address all Critical and Major snagging findings. Focus on safety compliance, MEP reliability, and tenant comfort. Minimum viable investment to halt asset degradation.
Total CAPEX
AED 89,400
Timeline
3 months
Payback
0.7 years
5-Year IRR
138.5%
| Category | Description | Qty | Unit Cost | Total |
|---|---|---|---|---|
| ELECTRICAL | RCD installation — all common area DBs (floors G, 2, 4) | 3 | 5,000 | 15,000 |
| HVAC | Chiller overhaul — recharge, condenser cleaning, oil filter | 1 | 11,000 | 11,000 |
| HVAC | AC condensate drain repair — units 3B, 4A, 5C | 3 | 1,800 | 5,400 |
| PLUMBING | Hot water recirculation pump replacement (Grundfos UP 25-64) | 1 | 4,500 | 4,500 |
| PLUMBING | Water tank cleaning, testing, UV disinfection unit | 1 | 4,000 | 4,000 |
| FIRE | Emergency exit signage replacement — LED illuminated (fl. 3-5) | 12 | 250 | 3,000 |
| FIRE | Fire extinguisher servicing and replacement (18 units) | 18 | 180 | 3,240 |
| ELECTRICAL | Parking LED lighting upgrade (replace T8 fluorescent) | 24 | 250 | 6,000 |
| HVAC | Elevator machine room ventilation — exhaust fan + split AC | 1 | 7,500 | 7,500 |
| CIVIL | Lobby entrance tile replacement + expansion joints | 1 | 1,800 | 1,800 |
| CIVIL | Parking soffit crack monitoring + epoxy injection | 1 | 1,200 | 1,200 |
| Total CAPEX | AED 89,400 | |||
Financial Projection
5. Scenario 2: Value Enhancement
Beyond remediation — strategic upgrades to reposition the asset in the market. Includes common area renovation, facade refresh, and smart building elements to command premium rents.
Total CAPEX
AED 285,000
Timeline
6 months
Payback
0.8 years
5-Year IRR
124.3%
| Category | Description | Qty | Unit Cost | Total |
|---|---|---|---|---|
| CIVIL | Lobby renovation — modern finishes, new reception desk, lighting | 1 | 65,000 | 65,000 |
| FINISHES | South facade repaint — UV-resistant acrylic (pressure wash + 2-coat) | 1 | 18,000 | 18,000 |
| FINISHES | Common corridor upgrade — new flooring, LED downlights, paint | 5 | 12,000 | 60,000 |
| HVAC | Smart thermostat installation — all 24 units (Honeywell T6) | 24 | 850 | 20,400 |
| ELECTRICAL | Smart access control system — main gate + lobby + parking | 1 | 22,000 | 22,000 |
| ELECTRICAL | EV charging stations — 2 dedicated parking bays | 2 | 8,500 | 17,000 |
| LIGHTING | Exterior facade accent lighting — LED strip system | 1 | 14,000 | 14,000 |
| CIVIL | Landscaping upgrade — entrance and common areas | 1 | 12,000 | 12,000 |
| OTHER | Building signage and wayfinding refresh | 1 | 5,600 | 5,600 |
| Total CAPEX | AED 285,000 | |||
Financial Projection
6. Scenario 3: Premium Repositioning
Full asset transformation targeting top-quartile market positioning. Combines all remediation and value enhancements with unit interior upgrades for premium rental rates and near-full occupancy.
Total CAPEX
AED 620,000
Timeline
10 months
Payback
1 years
5-Year IRR
96.8%
| Category | Description | Qty | Unit Cost | Total |
|---|---|---|---|---|
| FINISHES | Unit interior refresh — kitchen, bathroom, flooring (24 units, phased) | 24 | 8,500 | 204,000 |
| HVAC | Central chiller replacement — high-efficiency inverter unit | 1 | 85,000 | 85,000 |
| ELECTRICAL | Full smart building system — BMS, energy monitoring, app for tenants | 1 | 45,000 | 45,000 |
| CIVIL | Rooftop amenity space — seating area, BBQ, shade structures | 1 | 38,000 | 38,000 |
| CIVIL | Gym / fitness room fit-out — ground floor conversion | 1 | 55,000 | 55,000 |
| ELECTRICAL | Solar PV installation — rooftop 20kW system | 1 | 48,000 | 48,000 |
| FINISHES | Full building repaint — all elevations + waterproofing | 1 | 42,000 | 42,000 |
| OTHER | Professional photography, marketing materials, signage | 1 | 8,000 | 8,000 |
| Total CAPEX | AED 620,000 | |||
Financial Projection
7. Scenario Comparison
| Metric | Essential Remediation | Value Enhancement | Premium Repositioning |
|---|---|---|---|
| CAPEX Investment | AED 89,400 | AED 285,000 | AED 620,000 |
| Timeline | 3 months | 6 months | 10 months |
| Rent Uplift | +5% | +18% | +32% |
| Occupancy Uplift | +6% | +12% | +16% |
| Utility Savings | 12% | 22% | 30% |
| Annual NOI Uplift | AED 123,840 | AED 354,240 | AED 600,000 |
| Payback Period | 0.7 years | 0.8 years | 1 years |
| 5-Year IRR | 138.5% | 124.3% | 96.8% |
8. Servicy Recommendation
Based on the property's current condition, market positioning, and the client's investment profile, Servicy recommends Scenario 2: Value Enhancement as the optimal investment strategy.
AED 285K
Investment
+AED 354K/yr
NOI Uplift
0.8 yrs
Payback
This scenario delivers a compelling balance of investment efficiency and market repositioning. The 6-month timeline minimizes vacancy disruption, while the projected 18% rent uplift and 91% occupancy aligns the property with top-quartile benchmarks for the Al Nahda submarket. Payback is achieved in under 10 months, generating cumulative additional revenue of AED 1.77M over 5 years.
9. Recommended Next Steps
Client review meeting to discuss scenario selection and confirm investment appetite — within 7 days
Servicy to issue detailed scope of work and contractor tender package for selected scenario — within 14 days
Competitive bidding from 3 pre-qualified contractors per trade category — 21 days
Contractor selection, contract signing, and project commencement — within 30 days
Monthly progress reporting and cost tracking via Parago dashboard
Post-renovation inspection and updated Asset Health Score — upon completion
Disclaimer & Assumptions
Financial projections are based on current market data for the Al Nahda, Sharjah submarket as of 12 February 2025. Actual results may vary based on market conditions, contractor pricing, project execution timing, and tenant demand. ROI calculations assume stable market conditions over the projection period. Rent uplift projections are based on comparable transaction data from the past 12 months. Servicy does not guarantee specific financial outcomes. This report is for advisory purposes only and does not constitute financial advice or a binding offer. All cost estimates are subject to formal contractor quotations.
Prepared By
Eng. Sarah Mahmoud
Head of Technical Services, Servicy
12 February 2025
Reviewed By
Mr. Faisal Qadir, CFA
Capital Advisory Director, Servicy
12 February 2025
Servicy
Property Intelligence & Asset Optimization
This document is confidential and intended for the named recipient only.
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