Aurelia Residences — Funding Strategy & Investor Terms
The Aurelia Residences Sandton project requires total capital of R870 million, sourced through a blended structure of equity, senior debt, mezzanine finance, and pre-sales deposits. The capital structure has been designed to optimise the cost of capital while maintaining conservative leverage ratios…
Section 13 · Business Plan
Funding Strategy & Investor Terms
The Aurelia Residences Sandton project requires total capital of R870 million, sourced through a blended structure of equity, senior debt, mezzanine finance, and pre-sales deposits. The capital structure has been designed to optimise the cost of capital while maintaining conservative leverage ratios…
Targeting a 24–30% levered IRR, a 1.8x–2.1x equity multiple and a payback of approximately 42 months from first equity deployment.
13.1 Capital Requirements
The Aurelia Residences Sandton project requires total capital of R870 million, sourced through a blended structure of equity, senior debt, mezzanine finance, and pre-sales deposits. The capital structure has been designed to optimise the cost of capital while maintaining conservative leverage ratios that provide comfort to both debt providers and equity investors.
13.2 Equity Investment Terms
ARD is seeking R280 million in equity capital from a select group of institutional and high-net-worth investors. The proposed equity terms are structured to provide attractive risk-adjusted returns with clear governance protections:
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Minimum Investment: R10 million per investor (negotiable for strategic partners)
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Target Returns: 24–30% levered IRR; 1.8–2.1x equity multiple
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Distribution Waterfall: 100% return of capital, then 8% preferred return, then 80/20 profit split (investors/sponsor)
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Exit Horizon: 48–54 months from first equity deployment
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Governance Rights: Board representation proportional to investment size; quarterly reporting; key decision veto rights on budget overruns exceeding 10%
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Security Package: First-ranking mortgage bond over the development site; cession of project SPV shares; personal suretyships from key principals
13.3 Senior Debt Facility
ARD will negotiate a senior development finance facility of R420 million with a leading South African commercial bank. The facility will be structured as a revolving credit facility with staged drawdowns linked to construction milestones, a pre-sales trigger (minimum 30% of units under binding sale agreements), progressive repayment from sales proceeds, and security comprising first mortgage bond, cession of sales contracts, and contractor performance guarantees.
13.4 Use of Funds
| Application of Funds | Amount (ZAR) | % of Total | Timing |
|---|---|---|---|
| Land Acquisition | 120,000,000 | 13.8% | Month 1–6 |
| Construction | 550,000,000 | 63.2% | Month 13–40 |
| Professional Fees | 60,000,000 | 6.9% | Month 1–40 |
| Marketing & Sales | 40,000,000 | 4.6% | Month 6–50 |
| Legal & Compliance | 8,000,000 | 0.9% | Month 1–50 |
| Development Management | 15,000,000 | 1.7% | Month 1–48 |
| Finance Costs | 35,000,000 | 4.0% | Month 6–48 |
| Contingency | 30,000,000 | 3.4% | As required |
| Working Capital | 12,000,000 | 1.4% | Ongoing |
| Total | 870,000,000 | 100% | — |
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