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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
Discover Can Cortes, the investment opportunity of Puignovell obra nueva SL (Grupo Roig construcciones y servicios). A real estate development located in Palau Solità i Plegamans, which is located in the Vallés Occidental region and is about 32 kilometers from the city of Barcelona.
A project that already had in its day with the building license granted by the City Council and with 40% currently built. Online financing was foreseen in two stages for a total of 600,000.00 euros with a contribution from the promoter of approximately 25% of the total cost of the project, which amounts to 7,700,000.00 euros. In addition, there is a developer loan granted by a leading bank in the real estate sector. In the first phase, they raised 371,500 euros and now we request 300,000 euros more expandable by 25% of the amount.
The off-plan marketing of the residential development began in January 2020, and even with the forced stoppage caused by the pandemic, the planned targets have been exceeded, with 70% of the development's homes currently being reserved off-plan.
Roig Construcciones y Servicios SL (parent company of the group) defines itself as a construction and services company, with skills and experience in construction and renovation works of buildings, premises and homes, strongly implanted in banking retail works.
Born in Barcelona in 1985, when Ramon Roig i Serés, industrialist and businessman with a long experience in the construction sector, created a new company dedicated mainly to developing works and reforms for banks.
Currently, the group accumulates the experience of two generations and consolidates an upward trajectory in the construction sector, both in retail works, as in rehabilitation and new construction. A company that has experience of more than 30 years in the market, with a consolidated and dynamic team, oriented to the achievement of objectives, and a strong vocation for services.
The project consists of the construction of three isolated multi-family housing blocks with specific volumes on the ground floor and two upper floors, all of them with a basement dedicated to parking and a flat roof. Two of these blocks will have the entrance to the shared parking lot with access from Ebro Avenue and the third will have access from the restricted road that arose from the parceling of the parent estate.
The three blocks will have access to a garden with a communal pool, and at the same time, all the houses on the ground floor will have a private garden at the same level as the house.
The promotion consists of 37 homes, 34 of free rent and 3 of vpo of which 34 are three bedrooms, 2 two and one 1 bedroom. It also has a basement with 40 parking spaces and 40 storage rooms.
At present, as we mentioned previously, the work is carried out in 40% and more than 70% of the homes.
Palau Solità i Plegamans (previously called Palau de Plegamans) is located in the Vallés Occidental region and is about 32 kilometers from the city of Barcelona. At present, its census is of 14,771 inhabitants, which implies that it is the twelfth most populated municipality in the Western Vallés. In addition, this municipality is an important road and highway communications hub, headquarters of large multinationals and has several highly relevant industrial estates.
The loan is presented as a very attractive investment opportunity:
· Purpose: The issued loan will finance construction work expenses.
· Type of product: Fixed interest loan.
· The annual nominal interest rate: 10%.
· Total profitability: 12.5%.
· Expiration period: 15 months.
· Type of amortization of capital: At maturity
· Interest payment: Quarterly paid by overdue quarters, counted as of the day following the start date of the loan.
· Guarantees: Acknowledgment of debt before a notary public and endorsement by the company Roig construcciones y servicios SL
Risks and Warnings
Investing in real estate carries risks, including the risk of total or partial loss of the invested capital, the risk of not obtaining the expected monetary return and the risk of lack of liquidity of the investment. In the case of financing through the issuance of shares, the risk of dilution of the participation in the company, the risk of not receiving dividends and the risk of not being able to influence the management of the company is also included. In the case of financing through the issuance of shares or other capital securities, the risk of dilution is included, the risk of not receiving dividends, the risk of not being able to influence the management of the company, all affected by the restrictions to the free transferability inherent in its legal regime.
StockCrowd PFP, SL (StockCrowd IN) does not hold the status of investment services company, or credit institution and is not attached to any investment guarantee fund or deposit guarantee fund. Participatory financing projects are not subject to authorization or supervision by the National Securities Market Commission or by the Bank of Spain, therefore the information provided by the promoters on the projects has not been reviewed by them (nor, in the case of issuance of securities, constitutes an information brochure approved by the National Securities Market Commission)
Investing in real estate should be done as part of a diversified portfolio. StockCrowd PFP, SL (StockCrowd IN) is intended for people with sufficient knowledge to understand the risks of investing in newly created companies.
Investing 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 capital invested, subordinate nature of the loan (particularly against the mortgagee, in those cases in which the acquisition of the property that is the object of the project is additionally financed through loans with a mortgage guarantee), 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 can also be a general drop in property prices due to a multitude of factors.
Mitigation: The promoter knows perfectly the dynamics of the market and his team is made up of professionals with extensive experience in the sector. Their knowledge and know-how allows them to identify and anticipate price trends, anticipating the market. There is an appraisal of the property and sometimes a market study is carried out.
Liquidity risk: Not being able 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 collaborators in brokerage services to reduce this risk.
Risk of rising interest rates: Increase in the cost of financing in the purchase of real estate (mortgages). Which would push down the demand of the housing market.
Mitigation: The most reputable economists predict that the European Central Bank will not raise interest rates drastically this year. And the rise that will be implemented in the future will be very slow.
Political risk: What happens if political instability grows during this year.
Mitigation: Being an asset located in a very consolidated and exclusive area, it does not have a direct influence, allowing this risk to be significantly reduced.
Risk of not completing the financing: What happens if the investments do not complete the entire objective of the opportunity in the expected time.
Mitigation: The Law for the Promotion of Business Financing 5/2015, allows Participatory Financing Platforms to exceed the initially foreseen term by up to 25%. If the opportunity has reached at least 90% of the financing objective, it can be effectively completed. In the event that the campaign does not reach the minimum 90% of the project, all amounts are returned by the platform at no cost to the investor.
Risk of total capital loss or of not obtaining the expected monetary return: It is important to bear 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 it. of the invested. There may be a bankruptcy or bankruptcy on the part of the developer or that the estimates of your business plan are not met for various reasons.
Mitigation: StockcrowdIN performs a risk analysis of both the promoter and the opportunity. It is studied that the promoter is up to date with payments with AEAT and TGSS and that it is not registered in the RAI. Likewise, it is studied that no information has been registered on a claim from the Public Administration, or lawsuits and that the company deposits its accounts with regularity.
Risk of fraud: It should be noted that there may be a risk of fraud due to improper use of the money obtained for the project. There may be a fraudulent use of money from any real estate operation.
Mitigation: In accordance with the Law for the Promotion of Business Financing 5/2015, StockcrowdIN requests a criminal record and an Honorability Test from administrators and shareholders with high participation in the companies that carry out the project. Also, explain that until the participatory financing campaign is completed, the promoter does not have the funds by going to an escrow account where they do not have access. It is also required that every two months, the promoter reports on the use of the money and therefore on the evolution of the project. You are also required to keep analytical accounts of the project and separately.