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Yield on cost, the metric the IC actually reads.

Stabilised NOI on total development cost, target yield versus exit cap rate, and residual land back-solved from the answer.

  • Inputs7 blocks
  • Outputs8 metrics
  • CashflowMonthly
  • ScenariosPlanned

What this model does

Yield on cost investment model, end to end.

Benchmark the project on yield on cost, the metric investment committees actually trust. Set a target yield and back-solve residual land, or fix the land and return the yield.

Calculation flow05 steps
  1. 01

    Total development cost

    Land, build, soft, statutory and finance assembled into TDC.

  2. 02

    Stabilised NOI

    Effective rent, recoveries and operating cost feed stabilised NOI.

  3. 03

    Yield on cost

    Stabilised NOI divided by TDC returns the headline yield.

  4. 04

    Cap rate spread

    Yield on cost compared to exit cap rate; spread returned in basis points.

  5. 05

    Residual land

    Residual land back-solved from a target yield, or yield from a fixed land.

Schema

Every input. Every output. In one view.

The full yield on cost investment model schema. 7 input blocks feeding 8 output metrics, with the calculation engine in between.

Inputs07 blocks
  1. 01

    Asset

    GFANLATenant typeStabilised year
  2. 02

    Land

    Land costStamp dutyAcquisitionResidual land target
  3. 03

    Build and soft

    Build costSoft costStatutoryFinance
  4. 04

    Stabilised NOI

    Effective rentRecoveriesOperating costCapex reserve
  5. 05

    Yield and cap rate

    Target yieldExit cap rateCap rate spreadSensitivity
  6. 06

    Mode

    Solve for landSolve for yieldSolve for rentSolve for build
  7. 07

    Capital stack

    LVRCouponEquity tranchePromote
Outputs08 metrics
Primary outputAt base case
Yield on cost6.4%
MetricValue
  • Exit cap rate5.4%
  • Cap rate spread100 bps
  • Stabilised NOI$11.2M
  • Total development cost$175.0M
  • Residual land (back-solve)$22.6M
  • Development profit$28.4M
  • Development margin16.2%

Engine logic

Two engines. Scenarios and cashflow.

The two pieces that separate the yield on cost investment model from a spreadsheet. Scenarios that share one project, and a monthly cashflow wired to every input.

Scenarios01 / 02

Multiple scenarios, one project

Switchable in a click. No copied files.

  1. 01

    Target yield, cap rate spread and rent growth as scenario levers.

  2. 02

    Solve mode (land, yield, rent or build) per scenario.

  3. 03

    Sensitivity bands around yield and cap rate.

  4. 04

    Each scenario keeps its own capital stack split.

Cashflow02 / 02

Monthly cashflow, fully connected

Every input touches the schedule.

  1. 01

    Stabilised NOI built annually, with monthly underlying revenue if needed.

  2. 02

    Yield on cost recomputed live as inputs change.

  3. 03

    Cap rate spread returned in basis points, not just a ratio.

  4. 04

    Residual land back-solved through TDC and the target yield.

Excel replacement

Where the workbook quietly fails.

Every row is a recurring failure mode of the yield on cost investment workbook, and how the model handles it once.

SpreadsheetPopurise model
  • 01Yield on cost as a derived afterthoughtYield on cost as the headline output
  • 02Land cost fixed, yield ignoredResidual land back-solved from the target yield
  • 03Cap rate spread buriedSpread returned in basis points alongside the yield

Use and verify

What it decides. What to check first.

The decisions the yield on cost investment model is built to support, alongside the things to verify before you trust it on a live deal.

What it decidesUse cases
  1. 01

    Bid the site

    Set the target yield, back-solve residual land. The bid is the answer, not a guess.

  2. 02

    Benchmark the deal

    Yield on cost versus exit cap rate, with the spread on screen.

  3. 03

    Sense-check the build

    Solve for the build budget the deal will support.

  4. 04

    Brief the IC

    Yield on cost is the metric the IC will read first. Put it at the top.

Pre-flight checklist05 checks

  • Yield on cost as the headline output, not derived.

  • Cap rate spread returned in basis points.

  • Solve mode (land, yield, rent, build) as a live switch.

  • Sensitivity bands around yield and cap rate.

  • Stabilised NOI built from rent, recoveries and operating cost.

Worth checking before you stake a live deal on the yield on cost investment model.Register interest
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Questions

Yield on cost investment model, answered.

How Popurise handles the yield on cost investment model.

Is the yield on cost model live today?

Not yet. Popurise is live for residential feasibility. Investment models are on the expansion roadmap.

What is the difference from a feasibility model?

Feasibility models target profit on cost or equity IRR. Yield on cost reframes the same numbers for an income-producing asset.

Does it back-solve residual land?

Yes. Set a target yield and the model returns the residual land value.

How is cap rate spread calculated?

Yield on cost minus exit cap rate, returned in basis points.

Shape the yield on cost model in Popurise.

Tell us how your team makes this decision today. We are building investment models with capital allocators and investment committees.

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