Etqan for Financial and Marketing Consulting reveals mechanisms and rules for unit pricing in the NAC’s projects, especially mixed-use buildings, Invest-Gate reports.

Ahmed Abdel Aziz, financial consultant and general manager of Etqan, says, “Etqan participates in the pricing of about 25 projects in the NAC and a diversified selling offering amounting to about EGP 50 bn within two years. During that period, we develop financial studies and pricing strategy for projects in a better and more accurate way.”

“Financial study of a project goes through three phases, are an initial study based on description card, development of the study based on the final designs of the project, and then the final pricing of units and different payment plans,” Abdel Aziz adds.

In the second phase of financial study, a general average price per sqm for each type of property (administrative – commercial – medical – hotel) is reached, based on market study (market status – current prices) and the data alongside objectives of financial study.

As for the third phase, the final pricing is done with LCAPS parameters.

Abdel Aziz explains that LCAPS is an abbreviation for the location of the project, its category, payment methods, and units’ space, pointing out that “L: Location” is the location of the project first, then the location of each unit within the project.

Likewise, “C: Category” is the type of property. The main activity is determined whether commercial or administrative, then clarifying commercial activity (restaurants and cafes – pharmacy – clothes – communications – … etc.). “A: Amount” of frontage that is used in evaluating the price of a commercial unit, which is the ratio of unit width (facade) to length, where the optimal ratio is 1:3.

Additionally, “P: Payment” is the payment method or payment plan, taking into account the time value of money. “S: Space” is the size of unit and its suitability for the activity.

Each of these five determinants is evaluated by a percentage, a relative weight is given in advance to each of these determinants, and the relative weight of each determinant varies according to each project and its specifications.

“In the end, the price of each unit is reviewed and compared, and some adjustments are made, if necessary,” Abdel Aziz concludes.