Update from the developer:
In a short space of time, the works of the promotion will begin, investors must remember that the execution is already above 40% and the developer is finalizing with their architects and designers the best spaces and the best amenities for the clients. The developer estimate that execution will take about 18 months, so it will be a project with a rotation, for what has been common in a real estate project and still more to do for the execution of works in the islands. The entire execution is studied in detail, in recent months the developer has dedicated a lot of time and resources to project planning, in fact, the developer has been working for more than two years on this project and the developer is very happy that it is finally a reality.
Regarding the commercial aspect, a few weeks ago the developer announced their project in the real estate supplement of the newspaper La Razón nationwide. Next, on April 1 the developer will launch a full page publication about the project in the same newspaper and the developer is sure it will be a commercial success. In the few days that the project has been announced on the different real estate asset sales pages, the developer has received a large number of requests for information that is already being managed by the developer's commercial department on the island. Investors must not forget that this project is a unique project on the island of Menorca, an Island increasingly in demand by both the international client and the national client.
At Azur Estates, the developer thinks that this pandemic that everybody is experiencing has had a change of habits that fundamentally affect teleworking and that many foreign clients think of a home in Menorca as a home in which to spend seasons that combine life on the island with the need to work telematically. Because of these changes inhabits, the Menorca project has a Business Center where everyone can work and have a coworking space, cafeteria, access to the internet, as well as a gym, swimming pool and recreation areas. The objective is that the clients can live, enjoy and work from the same place, Arenal Beach.
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Macro Location Analysis
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Purpose of the loan
We present a new project that consists of a loan for the development of residential development in Menorca of 32 homes distributed in 3 buildings within a private urbanization with common areas that include gardens, swimming pool and community gym. The development is 42% built (which is technically known as WIP, an acronym for “ Work in Progress ”) and is acquired from a financial institution at a price below the appraised value. The developer has already tested the commercial potential and anticipates the quick sale of the homes.
The development is located in the municipality of Es Mercadall, northeast of the island of Menorca, 3 minutes walk from the Arenal de Castell beach. It is a consolidated area that has hotels, leisure, and all kinds of equipment, etc. The project is located 20 minutes from the center of Mahón and 25 km from the airport. Menorca is the second largest in the Balearic Islands and the seventh in the country. It has a population of around 100,000 inhabitants, doubling in summer due to tourism.
The promoter of this opportunity is Azur Estates, a business group linked to the real estate sector, experts in the promotion of luxury homes in the Balearic Islands and Costa del Sol. The firm focuses on select projects in the Spanish market, with an emphasis on products coastal real estate targeting a variety of end-users.
The project consists of a fixed-rate loan granted to the vehicle company created by Azur Estates, Royal Balconies of Menorca SL (exclusively for this project) so that the promoter can exercise the purchase option he has on the development. The entire project will be financed through a combination of sources: the Urbanitae loan, the promoter's own funds and contributions from customer accounts, so the promoter does not plan to resort to bank financing.
The promotion consists of 32 homes located within a private urbanization with common and landscaped areas, as well as a gym, spa, business center and cafeteria. The complex is divided into three buildings: the first, “Edificio Alga” houses 8 homes, the second, “Edificio Ancora” with 4 homes on the first floor and a spa, business center and cafeteria on the ground floor; and the third, "Albatros Building" with 20 homes. The commercialization of the homes is aimed at vacation homes and is being carried out by both international and local marketers. At the licensing level, there is an opinion from the City Council that recognizes the inadequacy of the project to current regulations but authorizes its execution, as it comes from a previous license(the year 2007) and that it has not been revoked. Therefore, the project plans to start the works during the month of April. The developer has signed a deposit agreement on the ground, having already paid 35% of the sale price. The asset acquired is a promotion with work progress of c.42%, which reduces the development and completion time of the project. The Urbanitae investor loan will make it possible to make the last payment for the acquisition of the building.
This operation will be structured via debt, where Urbanitae Investors will grant a fixed-rate loan to the company created by the promoter exclusively for the project: Royal Balconies of Menorca, SL The financing will be destined for the execution of the purchase option that the developer has on the site. The main characteristics of the debt are (more information in the Loan Report document):
The total or partial early amortization will be allowed only in month 12, paying the corresponding interest accrued to date, plus a cancellation commission of 2% on the amortized principal of the loan.
The loan guarantees are instrumentalized through a Guarantee Agent, external to Urbanitae. The role of this figure allows creditors to take collateral in their own name. The Guarantee Agent is involved in the loan granting process and appears as a representative of all Urbanitae investors to clarify access to the guarantees themselves. In this case, the loan guarantees are ( more information in the attached Guarantee Agent Dossier ) :
There are several reasons to invest in this project:
Menorca, like the rest of the Balearic Islands, suffers strong urban pressure that the Administration regulates through strict regulations. As a consequence, the supply of new-build housing in Menorca, and particularly on the coast, is practically non-existent, despite the strong latent demand. This project benefits from taking advantage of previous urban planning regulations and a building license from 2007. Specifically, in the Arenal de Castell area, there is no promotion for sale or construction of new construction with these characteristics.
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 18 months, although the developer can repay the loan in advance from month 12 with a 2% penalty. 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 additionally, 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 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, after discounting the participation in the project that the platform itself may have. All of this in accordance with 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 capital invested, 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.
Azurestates, is a business group linked to the real estate sector, an expert 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.