Tetouan

Madrid, Spain

485 000 €

Raised 485 000 €

8.625% Gross annual
yield
-LTV
16 Months

Listed: 2019-11-28

Type: Variable-Interest Loan

Interest payment schedule: At Project Completion

Min. amount of investment - € 0

Project originated by:

Project updates

March 22, 2022

Update from the originator:

The project has obtained a return of 12.5% on the capital invested, one point higher than the estimate, which was 11.5%. The project has been closed with 10 months delay over the 16 planned. The final IRR of the investment is 5.5%.

As the originator was reporting, the first few months were complicated because bank financing for this type of promotion was much more difficult to obtain than we expected. But above all, it was the arrival of COVID that seriously hampered the project, at all levels (financing, construction, commercial). Difficulties were overcome and construction progressed; but when everything was ready to finish, there was an additional delay because a buyer gave up the purchase of two of the houses, due to economic problems, and the sale had to be recruited and formalized to two new clients.

On a positive note, it should be noted that the developer was able to manage the work without increasing construction costs, despite the sharp rise in recent months.

Regretting the delay that has been incurred, the originator believes that the promoter has done a good job, having achieved this result of the project in frankly complicated conditions.

The repayment should happen around the 4th of April.

See other project updates ›

Detail Descripton

EvoEstate description:

This is not skin in the game project as the expected returns for the equity project is rather low- 8.625% annualy. There is already an existing bank loan which gets repaid first and although the 4 out of 6 houses are reserved, the reservation fee is just 3000 EUR which does not give strong assuarance.

Urbanitae description:

From Urbanitae, we present a new project that consists of the development of a residential development of 6 new construction homes on a plot next to Bravo Murillo street, belonging to the district of Tetuán, in Madrid. We leave you the link to the Adrián Pulido Residential promotion website .

The district of Tetuán has a strategic location in the city of Madrid, currently stands out for its high real estate activity. Due to the morphology of the neighborhood, there is a great capacity for transformation, based on the use of small lots or the demolition of small houses for the subsequent construction of small residential buildings.

PROJECT DESCRIPTION

The project has a capital gains strategy and consists of the purchase of a company that is developing a project for the construction of a residential building with 6 homes and storage rooms on a plot on Adrián Pulido street. This company already has the land owned and has the operation with a high degree of progress. The works license is already granted and has 4 of 6 homes reserved . Construction is pending to begin with the entry of Urbanitae investors into the operation.

The proposed promotion consists of 6 homes , structured in 1 house with 2 bedrooms on the ground floor, 1 studio and 1 house with 1 bedroom on the first and second floor and a 1 bedroom penthouse on the attic floor. Each house is assigned a storage room in the basement.

The promoter of this opportunity, ATOMIUN , is a Spanish family-owned real estate developer dedicated to the promotion and management of assets. His team has more than 30 years of experience in residential and business real estate, and has extensive experience in promotions in the capital and surrounding areas that are running simultaneously. It provides a solid knowledge of the sector and the operational management of a promotion. It also has a proven track record in Joint Ventures and alliances with top-level investors and corporate clients to whom it brings real estate experience and knowledge. This promoter is the same as the Alcobendas opportunity, recently financed through the platform.

WHY INVEST?

There are several reasons to invest in this project:

The project is granted a building permit.
4 of the 6 homes are already reserved, which substantially reduces the risk of commercialization and market.
Investment opportunity in a new construction promotion project .
The total estimated net return by the promoter is 11.5% in 16 months. * There is a possibility to recover part of the capital invested before this period, improving the performance of the operation.
The project will be promoted by ATOMIUN , with great work experience in the area. It currently has 2 more major operations under development and plans to carry out 2 to 3 more operations throughout 2020.
Promotion in a consolidated residential area in the north of the capital, where the demand for flats at low prices for young people is very high, as well as retail investors looking for homes to buy and rent.
The promoter of the work invests its own capital in it, which aligns the interests of all the agents involved in the investment.

COST EFFECTIVENESS

The developer expects to generate a total income of 1,286,961 euros with the sale of the homes, which would mean a net gain for the estimated investor (after expenses and taxes) of around 11.6%.

STRUCTURE

The operation will be structured through a company already constituted exclusively for this project by the promoter. In said company, a capital increase will be carried out where both the developers and the Urbanitae investors will contribute the necessary capital for the purchase of the entire company promoting the plot. Once the purchase of the participations has been made, a capital increase will be carried out that will allow the costs of the promotion to be paid until obtaining the promotional credit. The operation has already been submitted to a financial entity that has shown interest in financing the construction, given that the land does not present any charges, the works license is already granted and there are reserves for the value of almost 70% of the expected revenues from Sales The two remaining homes,

The promoter will be dedicated to the integral management of the promotion and will also be an investor of the project, contributing around 10% of the total capital of the investment.

MARKET

A market study has been carried out to determine if the sales prices raised by the promoter are reasonable. Given the great demand already demonstrated in the promotion (4 units reserved), the developer does not foresee great difficulty in selling the other two remaining houses and in fact, they will try to sell for a little more to increase profitability . You can see more information in the documentation, Sales Witnesses, where you will find a list of homes for sale in the area.

There are currently several promotions underway, within the district of Tetuán, however in the neighborhood of Bellas Vistas there are no comparable promotions by type and delivery time.

WHEN WILL I RECOVER THE INVESTED MONEY?

The estimated term of this project is 16 months.

The planned deadlines for the promotion are as follows:

August 2019 obtaining a new building license.
January 2020 start of works.
December 2020, end of construction.
February - March 2020, first occupancy license and home delivery.
April - May 2020, liquidation of the company.

It is important to keep in mind that in any real estate development the terms may vary both upwards and downwards.

RISKS

All investments carry a risk. We detail the clearest risks we have identified for this project:

Increase in the deadlines foreseen in the project, due to construction delays.
Deviation of fixed costs associated with investment, unforeseen in construction.
Risk of not reaching the expected sales rates and consequently the delay in terms.
Risk of not getting the expected sales prices in the promoter's business plan.

Payment schedule

Date	Status	Late	Assignment date
02.03.2022	Paid	No	12 April 2022, 16:50

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