Loading…
A small office building in Al Quoz earns AED 180,000 a year in rent, and the owner bears AED 30,000 a year of operating costs. Capitalising net operating income at 6%, what value does the income approach give?
The DLD Valuation Guide (2025, as at 12 Oct 2026) describes the income approach as estimating net operating income and capitalising it, in line with the International Valuation Standards. NOI = AED 180,000 - AED 30,000 = AED 150,000; value = AED 150,000 / 0.06 = AED 2,500,000. AED 3,000,000 capitalises the gross rent, AED 2,970,000 capitalises gross rent and then deducts one year's costs, and AED 9,000 multiplies NOI by the rate instead of dividing. Source: DLD, Dubai Real Estate Valuation Guide, 1st ed. 2025, dubailand.gov.ae (as at 12 Oct 2026), ch. 4 and Annex II.
Capitalising gross rent instead of net operating income.
Practice more Dubai RERA Valuation & Market Analysis questions
Exam-style questions with worked answers, then full timed mocks. Free to start.
Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.
Start practising →Original study material mapped to the public exam domains; not a real test question.Independent. Not affiliated with DLD, RERA or DREI. Verify figures and rules against current guidance before relying on them.