Weighted Average Cost Metrics calculate the combined cost of all capital used in a property development project, weighted according to the proportion of each funding source, such as senior debt, mezzanine loans, and equity contributions. In property development finance UK, this metric enables developers and financiers to assess overall project financing costs, compare alternative funding structures, and optimise returns. By considering the varying interest rates, fees, and required returns for each component, Weighted Average Cost Metrics provide a clear view of financing efficiency, supporting strategic decisions across both short-term development budgets and long-term capital planning.
This sits within Blended & Weighted Scores, reflecting a specific measurement approach that influences how performance, risk, or funding constraints are assessed. It is commonly considered alongside Delivery/Drawdown Timing Metrics, as both are closely related measures used to assess similar aspects of performance or risk.
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