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← All worked examplesWorked example · Build-to-rent

A 250-unit BTR tower, on stabilised yield.

Sample assumptions, the lease-up curve, the opex stack and the exit cap rate that turn a residential build into an institutional asset.

  • Scale250 dwellings
  • Program42 months
  • Yield on cost2.98%

02 / Sample assumptions

The market context behind the numbers.

Pricing benchmarks, build rates and finance terms used in this build-to-rent example. Every one is editable in Popurise.

Assumption sheet07 lines
01
Avg weekly rent (blended)
$735
02
Occupancy at stabilisation
95%
03
Opex ratio
32% of EGI
04
Lease-up
8 months to stabilisation from PC
05
Exit cap rate
4.75%
06
Construction rate
$5,800 / m² GFA
07
Senior debt
55% LVR, 7.25% all-in

03 / Key inputs

The inputs that drive the deal.

Grouped the way Popurise groups them. Change a category, watch the build-to-rent output set respond.

0105 items

Site and scheme

Site area
2,200 m²
GFA
23,800 m²
NSA
18,200 m²
Efficiency
76%
Car spaces
180 podium
0205 items

Cost stack

Land
$28.0M
Construction
$138.0M
Professional and authority
$14.0M
Finance
$22.0M
Marketing and leasing
$4.5M
0304 items

Revenue and exit

Stabilised gross rent
$9.55M pa
Stabilised NOI
$6.16M pa
Exit value
$129.7M
Disposal cost
1.0% of price

04 / Base case outputs

The output set, in full.

Every number a developer wants on the screen for a build-to-rent deal, in one place.

Hero outputYield on cost
2.98%
Secondary metrics07 lines

  • Total development cost

    $206.5M

  • Stabilised NOI

    $6.16M pa

  • Exit value

    $129.7M

  • Development margin

    negative on base

  • Equity IRR (10 yr hold)

    9.4%

  • Peak debt

    $110.0M

  • Stabilised LVR

    85%

05 / Scenarios

Base, downside, stretch. Side by side.

Three scenarios on the same build-to-rent project. No copied files. The decision is which one to take to investment committee.

Base case

base

Current build rates, 4.75% exit cap, 8 month lease-up.

  • Yield on cost2.98%
  • Equity IRR (10 yr)9.4%
  • Stabilised NOI$6.16M
  • Cost per dwelling$826k
Verdict

Yield on cost sits below today's exit cap rate. Project needs concession, scale or a lower cost basis.

Downside

downside

Cap rate softens to 5.25%, opex ratio lifts to 35%.

  • Yield on cost2.86%
  • Exit value$112.7M
  • Equity IRR5.1%
  • Peak debt$112.0M
Verdict

Returns fall below cost of equity. Deal does not stack without concessions.

Stretch

stretch

MIT concession applied, build rate negotiated 6% lower.

  • Yield on cost3.42%
  • Equity IRR13.6%
  • Effective tax shield30% MIT
  • Cost per dwelling$762k
Verdict

Concessions are the lever. With MIT and tighter procurement the deal is investable.

06 / Decision takeaway

BTR is a long-duration income deal. Yield on cost has to clear the exit cap rate by enough to fund the lease-up risk and the ten year hold. Tax concessions, scale and procurement are the only levers that move it.

Register interest Open this example in Popurise. Change any assumption. Watch the output set respond.
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Build-to-rent feasibility, answered.

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How is lease-up modelled?

Month by month occupancy curve, separate effective and gross rents, and a vacancy line through stabilisation.

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