In year 2003, United Nations estimated that by year 2030, up to 5 billion people will live in urban areas which will be 61% of the world's population. Urbanization brings major modification on natural landscape; buildings are erected, soil has been transformed into roads and pavement, greenery has been vastly reduced, etc. The deterioration of the urban environment through urbanization can be seen from a phenomenon known as urban heat island (UHI); where cities record higher temperatures in comparison to their non-urbanized surroundings.This study explores the effect of urban texture, characterized by its physical density and form, on the receivable external heat gain, ambient temperature, urban ventilation and outdoor thermal comfort. Addressing these aspects would provide a more comprehensive methodology on urban microclimate analysis, rather being conducted separately. Hence, analyzing building performance should be looking not only at a stand-alone (isolated) setting, but also to consider the ‘neighborhood’ approach, where urban environment has a significant effect on the energy performance of individual buildings.A series of hypothetical building arrangements are being put into an empty block in a dense urban area, where each of scenarios goes through a series of microclimatic analyses. At the end, this parametric study would narrow down design options which have favorable microclimate condition and acceptable district energy performance.