Internal Cost of Capital (ICoC) refers to the minimum return that property developers expect on their own equity invested in a development project. It represents the opportunity cost of using internal funds instead of deploying them elsewhere, accounting for the developer’s risk appetite and financial objectives. In UK property development finance, ICoC is vital as it guides how much equity a developer commits relative to external borrowing. By measuring ICoC, developers ensure their project returns exceed internal thresholds, helping to balance profitability and risk within the competitive UK property market.
This sits beneath Equity Cost Metrics, introducing a more specific variant of the measure without changing its core interpretation.
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