Reinvest24's first Spanish project is moving close to an end. The initial plan was to finalize the exit in January 2022. Due to COVID-19 restrictions, the bureaucratic process was slower than expected, as the local authorities are open now 1 day per week instead of 5. Therefore the first stage will be repaid in the second week of February and the rest of the stages will be repaid one by one until the end of April.
The developer was able to fully develop the inside of the building. Now all the apartments have laminated and tiled floors, as well as new windows and doors. The rooms are equipped with new bathroom and kitchen furniture. To date, all the apartments are ready to welcome new owners. 3 out of 10 apartments are sold, the rest are reserved.
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Macro Location Analysis
EvoEstate Risk rating is of an informative nature only & can not be considered investment advice.
Loan To value
The originator has informed us that this project will have a first rank mortgage and that the LTV will not be higher than 70%.
Category - Development project (full bullet)
Annual yield - 14%
Collateral - Owned by our SPV, secured with the mortgage
Duration - 7 months
Country - Spain
New flagship project on a new market - Spain, implemented by our team in partnership with an experienced construction company - Kirsan Holding. This property will be owned by our SPV (RE24 ESP SL), fully developed and managed by Reinvest24.
As of today, we have successfully acquired Xirivella property and started with the development of the project. The biggest part of architectural works is already done by our main Architect. This involves the creation of apartment plans, choosing the right materials for reconstruction and specifying the requirements for the project. The construction works have already been started and are ongoing on-site. Our Reinvest24 Spain team is visiting the construction sites on a weekly basis and monitors the process personally.
Valencia is the third-largest city in Spain with a population of 5.5 million and has the largest port on the Mediterranean Western coast, which generates 51% of Spain’s GDP. Apart from being an economical hub, this is a hometown of Paella, with a cafe society to die for and a place where architecture just takes your breath away.
The property is located in Xirivella which is a municipality located in the metropolitan area, just a couple of minutes from Valencia. The municipality has very close proximity to one of the largest shopping centers in Spain, where all kinds of commercial and leisure activities are concentrated.
The building itself is very well located - just a few meters from the main avenue with main shops, banks, the main transportation roots and services. Also, it is only 6 kilometers away from the airport and 16 minutes from the coastline.
The property is located in Carrer de Juan Molina, 4, Xirivella, Spain, with cadastral numbers 1518102YJ2711N0001WT and 1518112YJ2711N0001LT. The premises consist of 3 floors (plus ground floor), 10 apartments from 51m2 up to 145.6 m2 per apartment, storage rooms from 4 to 8 m2, garages and parking places. The total area of the building is 1.117,35 m2.
The construction of it began in 2007 and due to the great crisis that Spain was facing then, the further development of it was paralyzed. We see great potential in this property, as the demand for modern new apartments in the area is very high due to low supply. It's an old city covered with historical buildings, leaving less room for new developments. The average price for the sale of the new construction is around 1400-1600 EUR per m2.
The KIRSAN holding has begun its operations in 2010 as a real estate development company. It opened offices and developed numerous successful projects in Spain, Latvia, Switzerland, Germany, Romania and Moldova.
As of today, KIRSAN built and commissioned 25 residential complexes with 4595 ready-to-use apartments. The total built-up area was 225,460 m2. Each project was built with a special treat, passion and scrupulous attention to even the smallest details.
Full control over the execution of the renovation project
Extraordinary performance and earnings potential of 14% + 0.5% (over 1’000)
Full bullet – repayment of principal amount together with interests by end of the investment period
The renovation works will be conducted by our partner, experienced developer Kirsan Holding. The total budget for the renovation works will be 500 000 EUR, partially funded by a bank loan. The construction works will start as soon as the property is acquired and will be fully finished within 8 months. Adding some time for funding and sales period time buffer, we conservatively estimate project duration to be 12 months. As of today, the project and all the permits for the construction works are approved by the municipality. The sales process will be started at the beginning of 2021 and we expect to sell out by the time the apartments are commissioned.
The construction works have been started and are ongoing on the site. To proceed with the project faster, we already started with the selling process for the apartments. In fact, we received the first interested buyers who are looking to relocating to this particular area of Spain. Performing the renovation on this building will provide over 35% of profit margin before taxes. The SPV has 2 local employees who will be managing the project from Reinvest24 side, including the sales process and monitoring the renovation works.