Calculator T-08 / Available
Sell the units, or keep the building?
Compare a build-to-sell exit with a build-to-rent hold strategy, using the same project assumptions but different capital logic.
Assumption set
Product
Saleable area
5,760 m²
Gross development value
KES 1.07bn
Implied gross yield
7.7%
Shared finance cost
KES 123.2m
Strategy output
Exit decision
BTR profit advantage
KES 374.9m
Positive means holding as a rental asset leads. Negative means selling units leads.
Build-to-sell profit
KES 71.2m
Build-to-sell margin
7.2%
Build-to-rent profit
KES 446.2m
BTR margin on cost
48.3%
BTR terminal value
KES 918.6m
NOI over hold
KES 478.4m
Sensitivity matrix
Rent growth vs exit yield.
Each cell shows BTR advantage against selling units. Terracotta cells favour build-to-sell.
| Rent / Cap | -1% | -0.5% | 0% | +0.5% | +1% |
|---|---|---|---|---|---|
| -10% | KES 338.2m | KES 285.2m | KES 238.0m | KES 195.8m | KES 157.8m |
| -5% | KES 412.3m | KES 356.2m | KES 306.5m | KES 261.9m | KES 221.8m |
| 0% | KES 486.3m | KES 427.3m | KES 374.9m | KES 328.0m | KES 285.8m |
| 5% | KES 560.3m | KES 498.4m | KES 443.4m | KES 394.2m | KES 349.8m |
| 10% | KES 634.4m | KES 569.5m | KES 511.9m | KES 460.3m | KES 413.9m |
Method note
The build-to-sell case treats the project as a development margin problem. The build-to-rent case treats it as an income asset, adding operating income over the hold period and a terminal value capitalised from stabilised NOI.
The model is intentionally directional. It excludes tax, rent-free periods, vacancy during lease-up, refinancing, replacement reserves beyond operating costs, and detailed monthly cash-flow timing.
Questions / Method
Two exits, two kinds of patience.
What does the build-to-sell vs build-to-rent comparator test?
It compares a unit-sales strategy with a rental-hold strategy. The sale case focuses on GDV, selling costs, absorption, finance cost, profit, and margin. The rental case estimates NOI over the hold period plus terminal value at an exit cap rate.
When can build-to-rent outperform build-to-sell?
Build-to-rent can lead where rents are strong, operating costs are controlled, exit yields are supportive, and the investor can hold long enough for income growth and terminal value to outweigh slower capital recovery.
Is the comparator a valuation?
No. It is a first-pass strategy test. A full decision still needs tax, lease-up timing, occupancy, capex, refinancing, management costs, tenant demand, exit liquidity, and investor mandate analysis.