Update from the originator:
July report has been added to the documents section.
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Macro Location Analysis
EvoEstate Risk rating is of an informative nature only & can not be considered investment advice.
Purpose of the loan
We present a new project that consists of the granting of a loan for the development of a development of 12 luxury homes with private pool and garage space in Ibiza.
The promotion is located in the San José de Sa Talaia municipality, in one of the Balearic Islands with the greatest tourist attraction: Ibiza. Specifically, it is located on Calle Calviá 25, located 500 meters from Cala Vadella Beach. Ibiza has a population of around 150,000 inhabitants, which multiplies in summer, being the second most populated island of the Balearic Islands and the fifth in the entire country. Sa Talaia mountain is the highest on the island, it is 475 meters high and the buildings that are around it enjoy a privileged position in the environment. The development is located 18 km from Ibiza Airport.
The promoter of this opportunity is a company linked to Azur Estates, a business group linked to the real estate sector, experts in the promotion of luxury homes in the Balearic Islands (Menorca and Ibiza mainly). In addition to developing its own projects, the group works in collaboration with family offices, investment funds, SMEs and people with high purchasing power for the structuring, investment, development and management of real estate assets in the Mediterranean basin
Both the construction and development of the project, as well as its commercialization, will be carried out through the vehicle company created by Azur Estates, TARIDA BALCONIES RESORT, SL The project is structured as a fixed-rate loan, which will be allocated together with the promoter's own funds to begin the construction of this 2nd development in Cala Vadella. D icho loan is also guaranteed by another promotion Vadella 64, also in Cala Vadella, which is 100% complete. They currently have 18 homes sold to foreign clients, mainly Dutch, who have not been able to attend the delivery due to the restrictions associated with the current situation. These clients have already paid around a third of the price of the homes and will deed as soon as they can travel to the islands. The developer is expected to use a percentage of the proceeds from these sales to pay off Urbanitae's loan. The developer is also considering the possibility of requesting a developer loan later to continue financing the new work, without ruling out the continuity of the project itself with its own funds.
The proposed development consists of 12 luxury homes with individual pools, each with its own parking space. All this will be developed in a single registered property, land that is already owned by the developer and without charges. The developer intends to begin construction in Q1 2021. The 12 houses will be distributed in 3 blocks of buildings, each of which will house 4 houses.
According to a market study carried out by the promoter, the target client of the promotion is foreigners with high purchasing power who wish to obtain a vacation residence on the island. The developer intends to start the works in Q1 2021 and estimates a duration of 18-24 months including the deed process for the final units. The developer has already carried out a technical study on the site and consulted the current regulations for the development of the operation and has a construction license.
This operation will be structured via debt, where Urbanitae Investors will grant a loan to the company created by the promoter exclusively for the project: TARIDA BALCONIES RESORT, SL The main characteristics of the debt are (more information in the Loan Report document ) :
Early repayment will be allowed only on 2 occasions:
Regarding the repayment guarantees of said loan, the following is established in the debt contract:
The Vadella 64 project that serves as a guarantee (promoted by Azur Estates) is a promotion of 64 homes in San José de Sa Talaia, Ibiza. The current state of the houses is:
When foreign clients can travel to Spain to deed their homes, there will be a deposit to the COBBLESTONE project account for the value of 6.2 million euros. Currently, this project has a debt with the construction company for a value of 3.5 million euros, therefore, the project will generate a free cash flow of 2.7 million euros (a sufficient amount to make the repayment of the loan from investors of Urbanitae).
There are several reasons to invest in this project:
A market study has been carried out to determine if the sales prices raised by the developer are reasonable. Currently, there are no new construction complexes similar to the promotion in the area. The only units available for sale with characteristics similar to this project are located in coves other than the one in the project (Cala Tarida at 5km and Cala de Bou at 13km).
You can see more information in the documentation, Sales Witnesses, where you will find a list of homes for sale in the area.
The agreed term for repayment of the debt is 12 months. The essential milestones of the supporting project are as follows:
All investments carry risk. We detail the clearest risks we have identified for this project:
Warnings and Risks
Urbanitae Real Estate Platform PFP (Urbanitae) does not hold the status of an investment services company, or a credit institution and is not attached to any investment guarantee fund or deposit guarantee fund. The information published by Urbanitae Real Estate Platform PFP on its Website is for informational purposes only and in no case may it be considered as recommendations to investors.
The participatory financing projects published by Urbanitae on its Website are not subject to authorization or supervision by the National Securities Market Commission or by the Bank of Spain, therefore, all the information provided by the promoter in relation to the projects has not been reviewed by them.
The estimated return on the investment is net to the investor. In any case, the withholdings established by tax regulations will be applied to the income obtained, and in addition, a 0.3% corresponding to the commission of the payment entity Lemonway will be deducted.
Urbanitae expressly informs that, in the event of non-compliance with the total investment volume of the project, the term for the capture may be exceeded by up to 25%, maintaining the same investment conditions. Urbanitae warns that the financing objective of the project may be exceeded by up to 25%, and therefore the commission to the promoter may be increased proportionally, but all this while maintaining the same investment conditions for investors. Likewise, the project may be financed by Urbanitae when at least 90 percent of the financing objective has been reached, once the participation in the project that the platform itself may have has been discounted. All this according to the provisions of Article 69 of Law 5/2015 on the Promotion of Business Financing.
The investment in the projects published on this Website may entail certain risks, such as the risk of total or partial loss of the invested capital, of not obtaining the expected monetary return or of lack of liquidity. Therefore, we advise investors to only invest an amount that they are willing to lose and suggest that they diversify their investments to minimize and mitigate potential risks. In the event that the promoter is unable to return or remunerate the funds received, Urbanitae will not return their investment to investors.