Nave Menorca

 Equity
Spain
16.4%
Annual yield
-
LTV
Term: 12 months
Interest payment schedule:
At Project Completion

Descripton

EvoEstate presents its Investors another opportunity to invest in a deal originated by Inveslar. This opportunity offers expected returns estimated by the deal originator at 16.4% annually for a duration of 12 months. 

The purpose of this investment is to buy a Large warehouse in Menorca area which was acquired in an auction below the market price. The funds will be used to cover the acquisition expenses and property tax costs. After the acquisition the property will be sold. The total amount of the required capital for acquisition is 229,750.00 EUR, the total area of the warehouse is 914 sq. and it has a price of 251.37€ per sq. m 

Price competitiveness 

Current offerings in the given area for such characteristics start at 302,000 - €285 per sq. m. (difference +13,5%), however, the price goes upwards to €389,000 - €380 per sq. m. (difference +51%).  

Nonetheless, it’s important to understand that even though this is an undervalued property, this is a commercial property in Menorca’s real estate market, which isn’t as liquid as Barcelona’s or Madrid’s.

Margin of safety

There are 2 components providing the margin of safety to the investors is the property acquisition price which even after the acquisition taxes & costs and a renovation outcompetes other properties in the area. 

The sales process has already begun with a potential buyer is already an existing tenant, which has a rent contract for this property for the remaining year. The current tenant did not acquire this property directly, due to local legal complexity of auctions and could not access the possibility to acquire it directly. Current property rental income is 1,500 EUR per month.

Fees structure

Up to an IRR of 10%, 100% of the net profit of the operation will go to the Investors. Once the IRR of 10% is exceeded, 80% of the net profit of the operation will go to the Company and the remaining 20% to the investors.                                                    

EvoEstate success fee

EvoEstate does not charge any investment fees to the investors if the returns are 16% or below. In case the investment yields return above 16%, EvoEstate will charge 20% from the surplus, i.e. the investment yields 18%, EvoEstate will charge 0.4% from the invested amount, while returning 17.6% to the investors.

Additional information

  • This investment will become active once the fundraising for the whole amount of is completed or the deadline on March 16th is reached.
  • Attached in the documentation you can find the business plan and supporting documents in Spanish.
  • EvoEstate will not with-hold taxes unless you are a private client and resident of Estonia.

Summary of Risks

The investment in this project involves the following risks: risk of not obtaining the expected monetary return, risk of falling prices, risk of not completing the financing, political risk, risk of rising rates, risk of lack of liquidity to recover the capital invested, risk of total or partial loss of the invested capital and risk of fraud.

Risk of falling prices: That the price of the property falls due to the increase in supply or decrease in demand in the area. There may also be a general fall in property prices due to many factors.

Liquidity risk:  Unable to find a buyer when you want to sell the property.

Mitigation: The sales team knows the dynamics of the market and is structured with a team of partners in intermediation services to reduce this risk.

Risk of rising rates: Increase in the cost of financing in the purchase of real estate. What would push down the demand of the housing market.

Political risk: What happens if political instability grows during this year.

Risk of loss of total capital or of not obtaining the expected monetary return:   It is important to keep in mind that there is no safe investment, and as in any investment, there is always the risk, not only of not obtaining the expected returns, but of losing all of the invested There may be a bankruptcy or bankruptcy by the developer or the estimates of your business plan for various reasons are not met.

 

Project originated by:

Documentation

16.4%
Annual yield
-
LTV
Term: 12 months
Interest payment schedule:
At Project Completion