Real Estate Investor Magazine South Africa March 2014 | Page 47

COMMERCIAL
funding in order to establish your weighted
average cost of capital;
• Establish your sources of both equity- and
debt- capital (f inancing) and identify the
amount of capital which you can raise against
each property value level. An advantage of a
portfolio fund is that you may be able to borrow
against the intrinsic value of one development
to fund the value extraction (growth) of another
development but this should only be done if
the risk of such (new) development has been
correctly mitigated; and
• Establish the portfolio funding access levels
which you have available and which can be used
to (a) redevelop your existing portfolio and (b)
acquire new developments.

Setting organic growth goals and
objectives
Having established your existing portfolio’s true
worth and identified any funding constraints
that may be present , it is now possible to set
about growing the value of your portfolio
organically, as follows:
• Identify the optimal building mix that your
fund should hold. Please see part 8, below,
which section indicates the current portfolio
mix of some of the more successful listed
property funds in South Afri