Aurelia Residences Developments (Pty) Ltd Business Plan › Section 6 › Revenue Model & Pricing Strategy

6.1 Revenue Streams

ARD’s revenue model is diversified across four complementary income streams, with unit sales representing the primary revenue driver and retained rental assets providing ongoing income stability:

Stream 1: Sale of Residential Units (Primary Revenue – 85%)

Direct sale of the 180 residential units represents the core revenue channel. Sales will be executed through a combination of pre-sales (targeting 30–40% of units prior to construction commencement), progressive sales during construction, and final-phase sales upon completion and occupation certificate issuance.

Stream 2: Rental Income from Retained Units (8%)

ARD intends to retain approximately 15–20 units (primarily one-bedroom) as a long-term rental portfolio, generating monthly income of approximately R18,000–R25,000 per unit. This retained portfolio provides ongoing cash flow, portfolio diversification, and participation in future capital appreciation.

Stream 3: Ground-Floor Retail Leasing (5%)

The approximately 1,800 sqm ground-floor retail precinct will be leased to curated tenants at rates of R250–R400 per sqm per month, generating approximately R5.4–R8.6 million in annual rental income. Tenant selection will prioritise brands that enhance the Aurelia Residences lifestyle proposition.

Stream 4: Short-Term Letting Management (2%)

ARD will offer an optional short-term rental management service for owners who wish to generate income from their units during periods of non-occupation. The Company will earn a management fee of 15–20% of gross rental income, leveraging Airbnb, Booking.com, and direct corporate booking channels.

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6.2 Pricing Strategy

Aurelia Residences’ pricing strategy employs a dynamic, phase-based approach designed to maximise revenue while maintaining sales velocity:

• Phase 1 – Early Bird (Pre-Construction): Units offered at 5–8% below market to incentivise pre-sales and demonstrate demand to lenders. Target: 35–40 units.

• Phase 2 – Construction Phase: Progressive price increases of 3–5% per quarter as construction milestones are achieved and market absorption is confirmed. Target: 80–90 units.

• Phase 3 – Completion Phase: Premium pricing at or above market rates as buyers can physically inspect finished units and experience amenities. Target: 50–55 units.

This phased pricing approach has been benchmarked against comparable developments in Sandton, where completed units typically command a 10–15% premium over off-plan pricing, reflecting reduced buyer risk and the tangible experience of the finished product.

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