How Revelop uses digital twins to map rental units and determine LOA

"We used to hire external specialists to measure LOA and spent a lot of time and money on it. Now I can use a measuring tool myself to get the dimensions of our spaces."

Sofia Segolsson, property coordinator at Revelop

Having the right leasable area and total area matters for day-to-day management, to ensure correct rent billing and budgeting for the right units. It's also important for optimizing the use of space, spotting potential for value creation, calculating taxes and insurance premiums, and for property purchases and sales, where the correct area can affect the price.

"It's also important that the area for individual units is correct when we're leasing out space or negotiating with existing tenants."

Sofia Segolsson, property coordinator at Revelop

That means there's a need for regular checks of both drawings and measurements, to report any discrepancies, document changes, and make necessary updates. Digitalizing drawings dramatically increases the organization's ability to take part in keeping the entire drawing archive up to date.

Revelop can now take measurements directly in the web-based drawings on the platform, where they're saved and made available, in both 3D and 2D, for the whole organization to use across different processes.

"In one of our buildings, we knew there were areas included in the LOA when we bought it that were actually light wells — space that can't be leased out or charged for. We've now been able to find out exactly how much LOA we actually have."

Sofia Segolsson, property coordinator at Revelop

Discrepancies like that can have a significant impact on both rent and price, which is why it matters — for the landlord, tenants, and any potential buyer — to get a better understanding of where and how LOA may have been under- or overestimated in previous measurements.

The measuring tool becomes a quality check that staff can use themselves to quickly and easily verify figures whenever there's uncertainty about existing LOA measurements in units and buildings, increasing confidence for everyone involved.

"A clear benefit I see is that we can quickly update rental units and LOA ourselves, easily, without depending on external consultants."

Sofia Segolsson, property coordinator at Revelop

Having an up-to-date overview of the property, unit boundaries, rental units and vacancies, as well as where entrances, restrooms and pantries are located, also increases management's ability to make informed decisions about renovations and tenant relocations to optimize operations for both tenant and landlord.

"If we want to split up a unit, that's what determines it. Putting up a wall isn't that expensive — running water and drainage is what gets expensive."

Sofia Segolsson, property coordinator at Revelop

Why it matters to understand and track LOA and BOA

• Property valuation. With an accurate, up-to-date understanding of LOA and BOA, a property owner can give quality-assured input to both appraisers and potential buyers. Underestimated LOA/BOA can mean the property owner doesn't get the right price for the actual usable area at sale. Overestimated LOA/BOA can lead to overvaluing the property and difficulty finding a buyer.

• Fair rent setting. Underestimated LOA/BOA means the property owner loses revenue by not charging for the actual usable area of a unit or home, while overestimated LOA/BOA results in tenants paying for more space than they actually use, which can lead to disputes.

• Efficient use of space. Detailed knowledge of LOA and BOA lets a property owner optimize how space is used within a property. By understanding exactly how much space is available and where, the property owner can make informed decisions about leases, renovations, and tenant relocations to maximize revenue, cut costs, and ensure space is used efficiently.

• Planning and budgeting. LOA and BOA are crucial for determining maintenance, operations and management costs. With continuously updated drawings and an accurate estimate of their spaces, a property owner can build realistic budgets and plan resources effectively to maintain the property's condition and functionality.

• Accurate tax and insurance assessment. LOA and BOA are also used to determine property taxes and insurance premiums. With precise, reliable measurements, a property owner can avoid taxes based on incorrect assessment data, and insurers can set the right premium levels.

About Revelop

Revelop invests in Sweden's major metropolitan regions of Stockholm, Gothenburg and Malmö, and currently owns properties in 15 areas. The portfolio comprises around 570,000 sqm of commercial space.