EvoEstate Risk rating is of an informative nature only & can not be considered investment advice.
We present a new project that consists of the development of a new-build residential development comprising 15 homes with 1, 2, 3 and 4 bedrooms in Barcelona (Catalonia). The promotion includes 16 parking spaces and commercial space. The houses, with an average of 98 m2 built, have an average price of € 475,000.
The development is located in the Navas neighborhood, 310 Navas de Tolosa street, next to Meridiana Avenue. It is a consolidated residential area, which has all kinds of services - Hospital de la Santa Creu i Sant Pau, El Clot-Aragó train station, and different educational centers, as well as leisure options, in addition to the metro stop. de Navas less than 500 meters from the development.
Navas is one of the seven neighborhoods that make up the San Andrés district of Barcelona. It owes its name to Navas de Tolosa street, which is one of the main axes of the neighborhood and where the promotion that is presented is located. The San Andrés district, to the north of the city, has approximately 170,000 inhabitants and is the third-largest district in Barcelona. Navas is located less than 6km from the center of Barcelona and less than 10km from L'Hospitalet de Llobregat.
The promoter of this opportunity, ANCAP, is a company created by professionals in the development and construction sector, with a technical profile that has developed more than 5,000 homes in recent years.
ANCAP has extensive and recognized experience in the residential real estate development market. Its main activities are construction, having developed both residential and tertiary-health projects or restoration of unique buildings. ANCAP works both for its own projects and developing the functions of the delegated promoters for other entities.
The project has a capital gains strategy, which consists of an alliance with the developer for the purchase of the site, development of the construction and sale of the 15 homes, 16 parking spaces and commercial premises that make up the development. The contributions of Urbanitae investors will be committed via a capital increase to the vehicle company that develops the project: NT310, SL
ANCAP has formalized a purchase and sale contract with the owner of the site for the acquisition of the same in a public deed before February 28. Promotion nor affected by the limitation imposed on the General Metropolitan Plan of Barcelona December 2018 envisaging 30% of housing subsidized housing, new developments in the city of Barcelona with more than 600 m2 buildable, given that the building license was requested prior to the approval date of said General Plan.
Providing investors Urbanitae will be for the purchase of the site and to bear the costs of the project and start the execution of the work until the granting of the mortgage loan promotor. The developer is currently negotiating with various banks to formalize said developer loan that will allow financing the execution of the rest of the construction.
Regarding commercialization, the promoter has formalized 4 reservations, which would mean reaching 27% of pre-sales. ANCAP is relying on local marketers to sell the homes. The purchase and sale contracts corresponding to said reserves will be formalized at the time of the granting of the promoter mortgage loan.
The operation will be structured through a capital increase, where both the promoter and Urbanitae investors will make a capital contribution to the company vehicle of the operation. Said vehicle company plans to resort to bank financing for the development of the work (promoter mortgage loan).
The promoter will be dedicated to managing the development and will be an investor in the project, contributing 22% of the total investment capital. The execution of the work will also be carried out by ANCAP so that there will be greater control over the construction costs of the development.
There are several reasons to invest in this project:
Investment opportunity in a new construction development project.
Total estimated return on the part of the developer around 30% in 22 months.
The project has a building license granted.
The promoter has already formalized four reservations, which represents 27% of the reserved promotion.
The project will be promoted by ANCAP, a leading developer-construction company in and around Barcelona.
The project promoter invests its own capital, which aligns the interests of all the agents involved in the investment.
The developer expects to generate a total net profit of 1,014,647 euros with the sale of the promotion, which would mean an estimated net profit for the Urbanitae investor of around 30% of his investment in an approximate period of 22 months.
A market study has been carried out to determine if the sale prices proposed by the developer are reasonable in accordance with the offer detected in the area of influence of the asset. The promoter accredits experience in the development of promotions with similar characteristics in the environment.
There is information available about the market within the documentation, "Sales witnesses", where you will find a list of homes for sale in the area.
WHEN WILL I RECOVER THE MONEY INVESTED?
The estimated term of this project is 22 months.
February 2022, capital increase.
First-quarter 2022, the start of the works.
Third-quarter 2023, end of construction. First occupation license and delivery of the homes.
Fourth 2023, liquidation of the company and distribution of profits to investors.
It is important to bear in mind that in any real estate development the terms can vary both upwards and downwards.
All investments carry risk. We detail the clearest risks we have identified for this project:
Increase in the terms foreseen in the project due to delays in the formalization of pre-sales and obtaining the promoter mortgage loan.
Diversion of fixed costs associated with the investment, unforeseen events in construction.
Delays in sales, and/or the need to lower the price in order to attract customers.
Risk of the bank's refusal to subrogate the mortgage promoter loan to some buyers, due to a situation of supervening insolvency (COVID, ERTEs, etc).
1 project / s in Urbanitae
ANCAP is a company created by professionals in the promotion and construction sector. Its main activity is the construction of both new developments and the development of reforms.