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Equity IRR calculator
Calculate the time-weighted internal rate of return on the equity invested in a development project, what capital partners care about most.
Formula
Equity IRR = discount rate that sets NPV of equity cashflows to zero
Equity cashflows = equity contributions (negative) plus equity distributions (positive), period by period.
Inputs
Equity drawdown schedule
Equity contributions, period by period, usually heaviest in months 1–6 (acquisition, deposits, early works).
Equity distribution schedule
Equity returns, period by period, usually concentrated around settlement of completed dwellings.
Output
Equity IRR (%)
Annualised time-weighted return on equity. Capital partners typically look for 20%+ on build-to-sell apartments.
Worked example
$5M of equity drawn evenly over months 1–6, $7.1M returned over months 30–34: equity IRR ≈ 18.4%.
If the same $2.1M equity profit returned in 18 months instead of 34, IRR climbs above 25%. Time matters.
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