Two ways to invest
Debt or equity. Stated on the first line of every offering.
Every RWA oa offering is one of two things. Debt finances a development for a fixed, contractual return. Equity owns the asset and takes what it earns and becomes. The structure is stated on the first line of every offering.
The two structures, line by line.
Development finance, fixed return.
Noteholders lend to a development through a secured facility. The return is agreed in the contract before a dollar is drawn, accrued through delivery, and repaid with principal at completion.
For capital that wants a defined return on a defined date.
Ownership, income, and upside.
Unitholders own the trust that owns the asset. They receive what it actually earns (rental income quarterly, development profit at completion) and share in capital appreciation.
For capital that wants the upside and accepts the risk.
| Term of comparison | Debt: secured notes | Equity: units in the trust |
|---|---|---|
| Return | Debt: secured notes Contractually fixed at a rate agreed before a dollar is drawn, then accrued and paid at completion | Equity: units in the trust Variable: quarterly net income and/or completion profit, plus appreciation |
| Risk | Debt: secured notes Lower and more predictable: the return is capped, secured, and repaid ahead of equity | Equity: units in the trust Higher: first-loss capital, paid after all debt, with nothing fixed or assured |
| Priority | Debt: secured notes Top of the waterfall: repaid, with all accrued interest, before any equity | Equity: units in the trust After all debt, ahead only of RWA oa's performance fee |
| Rights | Debt: secured notes Creditor rights: registered security, covenants, consent on major variations | Equity: units in the trust Owner rights: pro-rata distributions, profit participation, a vote on major decisions |
| Term | Debt: secured notes Fixed and dated, repaid at practical completion | Equity: units in the trust Target holds of five to seven years, or ~30-month developments |
The two structures can coexist in a single project, with debt investors financing the build and equity investors owning the result, each with its own vehicle, deed, and place in the waterfall. Illustrative terms; specifics per offering.
Worked examples
The same A$100,000, in each structure.
Both examples take a position of A$100,000 and apply that vehicle’s stated terms. The debt example reads its rate and term live from the public book. The equity example reads its term, preferred return and profit split live, and applies the published target multiple, an editorial figure, because no column on the vehicle holds one. Every figure is calculated by the same engine the platform runs, and every figure is illustrative: not a forecast, not an offer, and not a promise of any return.
A$100,000 of notes in Corrigan Yards Stage 1.
Interest is simple, accrues monthly on principal, and is paid with principal at practical completion. Noteholders take no share of any profit, so this is the whole of the return.
- Note principal
- A$100,000
- Fixed rate
- 11.0% p.a. simple
- Term to practical completion
- 22 months
- Interest accrued, per month
- A$916.66
- Interest accrued, per 12 months
- A$11,000.00
- Interest accrued, full 22-month term
- A$20,166.66
- Per A$100 of notes, full term
- A$20.16
- Repaid at practical completion (month 22)
- A$120,166.66
Illustrative only, not a forecast.
Debt caution
Fixed, capped return. Secured and repaid ahead of equity; capital is still at risk.Notes are not shares in RWA oa, not a deposit, and not a currency. One vehicle per asset, always.
Live vehicle: A$5,800,000 of A$9,500,000 committed.
A$100,000 of units in The Tannery.
Development equity pays nothing during delivery. The target is a single completion payout made through the waterfall: capital back, then the cumulative 8.0% p.a. preferred return, then 80% of the residual profit.
- Subscribed capital
- A$100,000
- Target horizon
- 30 months
- Target IRR
- 16.5% p.a.
- IRR implied by this worked example
- 16.0% p.a., approx.
- Completion proceeds assumed
- A$151,250
- Capital returned (tier 3)
- A$100,000
- Preferred return, 8.0% p.a. (tier 4)
- A$20,000
- Profit share, 80% of residual (tier 5)
- A$25,000
- Total to the investor
- A$145,000
- Equity multiple
- 1.45x
- RWA oa's performance fee, paid last
- A$6,250
Illustrative only, not a forecast.
Equity caution
No income during delivery. Profit is paid at completion through the waterfall; higher risk.Units are not shares in RWA oa, not a deposit, and not a currency. One vehicle per asset, always.
Live vehicle: A$2,970,000 of A$9,000,000 committed.
The equity example, tier by tier.
Tiers one and two are dimmed because this illustration isolates a single equity position: no external senior facility and no notes sit above it. Tier five exists only because tiers one to four are satisfied in full.
- 01
Senior project debt
Not applicableAny external senior facility is repaid first (interest and principal) where one exists.
Paid
A$0
- 02
Debt investors
Not applicableNoteholders are repaid their principal plus every dollar of accrued fixed interest. A debt investment is satisfied, in full, here.
Paid
A$0
- 03
Equity capital
Satisfied in fullEquity investors' subscribed capital is returned in full.
Paid
A$100,000
- 04
Preferred return
Satisfied in fullEquity investors receive a cumulative 8.0% p.a. preferred return on their capital before any profit is shared.
Paid
A$20,000
- 05
Performance split
EarnedOnly the residual profit is divided: 80% to equity investors, 20% to RWA oa: the platform's performance fee, and the last money out.
RWA oa fee
A$6,250
Tier 5 splits the residual A$31,250: investors receive A$25,000 and RWA oa’s A$6,250 performance fee is the last money out.
Illustrative only, not a forecast.
Which is right for you
Considerations, not advice.
RWA oa does not provide financial product advice and does not assess whether any offering is suitable for you. Set out below are the questions each structure raises. The answers are yours, and your own advisers’.
Questions a debt offering raises.
- Whether a fixed, capped return on a dated repayment is what this capital is for.
- Whether you can commit for a term that ends at practical completion, with no income before it.
- Whether the security package (first mortgage, general security, certified drawdowns) is one you would lend against.
- Whether you accept that a contractual return is not a guaranteed one, and that a note is not a deposit.
- Whether taking no share of the profit is an acceptable price for ranking ahead of equity.
Questions an equity offering raises.
- Whether you want ownership of what an asset earns and becomes, rather than a fixed coupon.
- Whether first-loss capital, paid after every dollar of debt, sits inside your risk tolerance.
- Whether a five-to-seven-year hold, or a development of roughly thirty months, matches your horizon.
- Whether you can accept income that is variable, or absent entirely during delivery.
- Whether you would still subscribe if the target multiple were not reached.
Risk
What can go wrong, in each structure.
Debt.
The fixed return on a note is contractual and secured, but it is not a bank deposit and it is not guaranteed. Interest accrues to practical completion and is paid only if the project reaches it: if delivery stalls, the term extends and the payment date moves with it; if the developer fails, recovery depends on enforcing the security over a part-built asset in whatever market exists at that time. Because noteholders take no share of profit, there is no upside to offset a delay: the best outcome is the return that was agreed, and the worst is the loss of interest, and of principal.
Equity.
Equity is first-loss capital. It is paid after every dollar of senior debt and every dollar of note principal and accrued interest, so a shortfall reaches it before it reaches anyone else. Vacancy, tenant default, valuation movement, construction cost overruns, planning delays and softer sales all land on equity first, and leverage magnifies each of them in both directions. Income is variable and not assured, development vehicles distribute nothing during delivery, and a target multiple or IRR is a target, not a forecast, and not a promise of any return.
Illustrative only, not a forecast.
Qualification
Qualification comes first.
Offer documents for either structure are provided only to investors who qualify under s708 of the Corporations Act 2001 (Cth): sophisticated investors under s708(8)(c), professional investors under s708(11), or subscriptions of at least A$500,000 under s708(8)(a). Register your interest and the qualification step is where the conversation starts.