Development management fee (DM fee)
The development management fee is the cost line that compensates the developer (or external development manager) for delivering the project. It sits inside TDC and reduces profit on cost.
Formula
Sometimes structured as a fixed dollar amount, sometimes a % of revenue. Always sits inside TDC.
Why it matters
On in-house deals, the DM fee is the developer paying themselves — it's a cost line in the project but it returns to the same balance sheet. On external deals, it's a real cash outflow. The way you treat the DM fee changes profit on cost noticeably; be explicit about it in any feasibility you share.
Worked example
For the Waterloo scheme with TDC ex-DM-fee of $23.4M, a 3% DM fee adds $702,000 to TDC, taking it to $24.1M.
Questions
Frequently asked
Should I include the DM fee on an in-house project?
Most ICs want it included. It captures the real opportunity cost of internal team capacity, and it makes the project comparable to externally managed ones.
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