Evergreen Gated Community — Funding Strategy
EEH’s funding strategy employs a blended capital structure designed to optimise cost of capital while providing appropriate risk allocation across the development lifecycle. The structure leverages the defensive nature of premium estate development, the availability of DFI concessionary funding, and the predictability…
Section 11 · Business Plan
Funding Strategy
EEH’s funding strategy employs a blended capital structure designed to optimise cost of capital while providing appropriate risk allocation across the development lifecycle. The structure leverages the defensive nature of premium estate development, the availability of DFI concessionary funding, and the predictability…
The maximum capital deployed at any point across the phased build, targeting a 24–30% IRR and a 2.1x–2.6x equity multiple.
11.1 Capital Structure
EEH’s funding strategy employs a blended capital structure designed to optimise cost of capital while providing appropriate risk allocation across the development lifecycle. The structure leverages the defensive nature of premium estate development, the availability of DFI concessionary funding, and the predictability of pre-sales to access competitive terms.
| Source | Amount (ZAR M) | % Total | Key Terms |
|---|---|---|---|
| Senior Development Finance | 445 | 50% | Prime + 2.25%, 6-year facility, phased drawdown, secured by development assets |
| Equity Investment | 220 | 25% | Ordinary / preference shares, 24–30% target IRR, 6-year horizon |
| DFI / Mezzanine Finance | 135 | 15% | Below-market rate (9–11%), 7-year term, impact-linked |
| Pre-Sale Deposits & Cash Flow | 90 | 10% | Buyer deposits (5–10% of purchase price) applied to construction |
11.2 Investor Returns & Exit Mechanisms
| Exit Route | Timing | Mechanism | Expected Return |
|---|---|---|---|
| Unit Sales (Primary) | Yr 2–6 | Progressive distributions from sales proceeds | 24–30% IRR |
| Commercial Node Sale | Yr 4–5 | Sale of retail/commercial components | 7–9% cap rate |
| Portfolio Sale to REIT | Yr 6+ | Sale of retained units to residential REIT | 15–20% NAV premium |
| Strategic Sale | Yr 6+ | Sale of company/brand/pipeline to listed developer | 8–12x EBITDA |
| JSE Listing | Yr 8+ | IPO of development and management platform | Market valuation |
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