Construction Benchmarks


To determine a normal internal rate of return (IRR) for a Katerra project, as well as a typical NREP project.

Early Findings


  • It was reported in late 2019 that "NREP is planning to raise €1.25bn for its latest fund to invest in underserved market segments." The target net internal rate of return for the value-add fund is 13%.
  • NREP's Fund II value-add fund had a 32% IRR.
  • An undated article reported that since NREP was founded in 2005, the average IRR across all investments is more than 20%.


  • SoftBank, a major investor in Katerra, reported that Katerra was approaching $2 billion in revenue for 2019.
  • It was also reported that Katerra had pulled out of several projects, including hotels and apartments.


  • A report published in 2018 found that there was little publicly available data on return rates for property development projects.
  • The report does, however, provide an in-depth analysis of calculating IRR when the information is not available.
  • A survey of U.S.investors and managers found IRRs ranging from 7.9 to 10.2%.
  • Other metrics that need to be considered along with IRR are Net Present Value (NPV), payback period, and weighted averages cost of capital (WACC).

Summary of Findings Related to Goals

  • We were able to find some data on NREP's IRR as it relates to investments, but we did not find any data on IRR related to specific construction projects.
  • For Katerra, we did not find any data on IRR, either overall for the company, or as it related to individual projects. As a private company, it is likely that this data is not publicly released.

Research proposal:

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