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Macro Location Analysis
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Purpose of the loan
The operation is being carried out by Foncière du Retail led by Sindy LEVY, who has been working in real estate for more than 10 years and has already successfully financed Raizers.
Raizers is involved in the financing of the acquisition of a property complex at 48 Rue Jeanne d'Arc in Saint-Mandé, between the Parc de Vincennes and the 12th arrondissement of Paris. The complex comprises commercial premises currently used as a bar/restaurant with a reserve and a flat on the first floor. The lease, which is due to expire, was the subject of an unsuccessful renewal application and a protocol for eviction with compensation was signed on 28 December 2020 for a tenant's departure scheduled for 15 January 2021.
The purpose of the operation is to increase the value of the commercial premises, sublet at market price, and to renovate the flat before resale.
The operator already found a new tenant for the commercial premises, with an annual rent of €60,000 (compared with €19,807 today) and a firm 6-year lease. The premises will be resold with a rated yield of 5%.
The sale is due to be signed at the end of January. The new lease will take effect on February 1st, 2021 and will benefit from a 4-month rent exemption for the completion of the fitting-out works.
The loan is secured by the double personal guarantees of the two operators as well as by the First Demand Guarantees of the two parent companies. The term of the loan is 24 months in order to ensure maximum flexibility for the operator to carry out the work on the flat and resell it under the best possible conditions.
*Weighting of 50% of the surface area of the storeroom
Renovation work will be carried out on the flat such as electricity, plumbing, kitchen and bathroom renovation, as well as painting.
An estimate has been drawn up by the company Logitecfor a cost of 60 103 € HT, i.e. 985 €/m².
The work to refurbish the commercial premises will be the responsibility of the future tenant, who will benefit from a 4-month rent exemption.
The sale will be handled internally by the operator who has extensive knowledge of the geographical sector and of the disposal of this type of asset.
* The flat will be resold once the work is completed.
* The commercial premises will be resold rented
The lease has been concluded with CKSTRP for an annual rent of €60,000 excluding VAT for a period of 10 years, of which 6 years are firm. The expected net profitability is 5%. The lease, signed on 28 December, will begin to run from 01/02/2021 after the departure of the current tenant.
CKSTRP operates the "Dark Kitchen", created in March 2020. The Dark Kitchen is a "virtual" restaurant that only does home delivery. The concept of "dark kitchens" has been expanding rapidly in recent years with the development of home delivery and strong consumer demand for ever more varied meal deliveries.
Simon Cohen, the manager, has already launched three other brands since 2018 on this concept in Paris: Coolhen, Crisp, Hara-Kiri. The turnover achieved in 2019 is €300,000. The Saint-Mandé premises will enable them to increase their production surface area to develop their brands, but also to benefit from an attractive trading area.
Level of commercialisation
The property will be sold once the work on the flat has been completed and the new tenant has moved into the commercial premises.
The building is located at the gates of Paris, close to the Parc de Vincennes and all amenities. It is a 15-minute walk from metro line 1 (Saint-Mandé) and line 8 (Porte dorée) as well as tram line 3a. Several bus lines also pass nearby.
Market price - apartments
The sale price of the flat is consistent with average market prices. It is displayed at a sale price of 1% higher than the market price. However, the operator's strategy is to start selling the property at around €700,000 after the renovation, i.e. €11,408/m², which will therefore be 18% higher than the average market price. The operator has extensive knowledge of the property market in the sector, and this higher price will enable it to possibly revalue its margin (by 17% at this selling price).
Market price - commercial premises
The sale price of the commercial premises was set according to a capitalization rate of 5%. The yield is average, but remains correct in relation to the sector, and is guaranteed by a firm 6-year lease.
The annual rent of €60,000 (i.e. €473 excluding VAT/sq.m/year) is in line with the market price in Saint-Mandé, which is 20€ higher.
The transaction is being carried out by SAS La Foncière du Retail, with a capital of 1,000 euros, registered 891,373,169 in the Créteil Trade and Companies Register on 24/11/2020.
SAS La Foncière du Retail, which carries the transaction and the bond issue, is 50% owned by SAS Holding Foncière de l'Immobilier and 50% by SASU Namem.
In order to comply with the regulatory provisions governing the bond issue, SASU Namem, wholly owned by Philippe Giami, will provide its First Demand Guarantee.
The bond will be issued by SAS La Foncière du Retail at an annual rate of 10% per year for a period of 24 months. The bond loan will be repaid at the end by the operator, with interest also paid at the end and guaranteed for a minimum period of 6 months.
In order to provide additional guarantees, the repayment of the bond loan is guaranteed by :
* Personal guarantees from Sindy Levy and Philippe Giami
* First Demand Guarantees from SAS Holding Foncière et de l'immobilier and SASU Namem
The bond contract provides for early redemption if :
* Sale of the business premises (units 1 and 33) allowing the bank and Raizers to be repaid
* Sale of all the units (1, 33 and 4) allowing the bank and Raizers to be reimbursed.
All the documents associated with this fundraising are available in the "documentation" tab.
Mrs. Sindy LEVY, 37 years old, began her real estate activity within the La Tour immo group in 2004, first as a manager and then for more than 5 years as Director of Property Management.
As of 2011, she will start to work on real estate operations, targeting the acquisition of building floors. She reinvests her patrimonial profits on property dealer operations and since 2018, has been carrying out property dealer operations based on the valuation of buildings. It specializes in building up a portfolio of assets that are resold to institutional investors. It sources these opportunities from its network developed over the last few years.
She currently owns five real estate properties with which it carries out its property dealer operations, in association with various partners. The share capital of its holding company is €3,094,743, with which it holds its real estate and property investment companies.
Philippe GIAMI, 59 years old, is a non-operating partner and also the uncle of Sindy Levy. After a career of more than 20 years as a sales manager in import-export and distribution of telephone equipment, he created a publishing and consulting company in 2012.
He owns three properties in his own name with his wife, valued at more than 3 million euros, as well as several properties through different SCIs which generate him a property income.
Zoom on the company holding the operation, SAS La Foncière du Retail
La Foncière du Retail was created in November 2020 and will close its first accounts on 31/12/2021.
Zoom on the company giving its First Demand Guarantee GAPD
Balance sheet SAS Holding Foncière de l'Immobilier
Income statement SAS Holding Foncière de l'Immobilier
Zoom on the company giving its First Demand Guarantee GAPD
Balance sheet SASU NANEM
Income statement SASU NANEM