Glossary definition
Equity
The developer's own capital contribution to a project, sitting at the top of the capital stack and bearing the highest risk but also receiving the residual profit. Equity typically represents 10% to 35% of total project costs depending on the debt structure.
Definition
The developer's own capital contribution to a project, sitting at the top of the capital stack and bearing the highest risk but also receiving the residual profit. Equity typically represents 10% to 35% of total project costs depending on the debt structure. It can come from the developer's own funds, private investors, family offices, or institutional equity partners.
See also
Closely related terms.
Capital Stack
The total structure of funding used to finance a development project, arranged by seniority from senior debt at the bottom through mezzanine finance to developer equity at the top.
Joint Venture
A partnership arrangement between a developer and a capital partner to deliver a property project, typically structured so the developer contributes expertise and management while the equity partner provides the capital.
Mezzanine Finance
A layer of debt that sits between the senior loan and developer equity in the capital stack, secured by a second legal charge on the property.
Senior Debt
The primary layer of debt in a development finance structure, secured by a first legal charge on the property and sitting at the bottom of the capital stack with first priority on repayment.
Further reading
Guides that touch this term.
Guide
The Capital Stack in Property Development: How to Structure Your Funding
A comprehensive guide to understanding and structuring the capital stack in UK property development, from senior debt through mezzanine to equity contributions.
9 min read readReadGuide
How Does Development Finance Work? A Complete Guide for UK Developers
A ground-up guide to how development finance is structured in the UK, covering loan mechanics, drawdown schedules, monitoring surveyors, and what lenders look for in your application.
5 min read readRead
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