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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
Purpose of the loan
The operation involves the purchase/resale of an existing building after its change of use and interior works. The property is located in Bron, a commune of the "Grand Lyon", at 29 rue Roger Salengro, close to all amenities, transport, shops and services.
The existing building has a mixed use of commercial on the ground floor and residential on the first floor. A permit, which was obtained in September 2020, allows the change of use of the property to residential. The project is therefore to cut up the building in order to create two identical units, two T3 duplex flats of 75 m² each with :
* 15 m² of terrace (South/West facing)
* 20 m² of garden (facing North/East)
* a bicycle room
* a parking space
* an independent entrance
There are no common parts except for the bicycle room and the structure of the building.
The operators, Sébastien BOULON and Yvan DA COSTA, both work in the construction industry. They have in fact, since 2019, a general building company (SABATY), which will carry out the work of the operation.
Mr. BOULON has an entrepreneurial profile that has evolved in the hotel and commercial sectors. In particular, he sold his shares in a coffee trading company, which enabled him to enter the real estate and construction business.
Mr. DA COSTA has spent his entire career in the construction industry, more specifically as an electrician and in the renovation of buildings as a general contractor.
The two partners, childhood friends, decided in 2019 to set up a company together specialising in building works and thus benefit from the know-how of Mr DA COSTA, a man of the art of structure. More recently, they wanted to develop and intervene in the entire real estate chain with this first operation as an operator, thanks in particular to the network of Mr. BOULON who has more of an administrative and commercial role.
The prices posted on this operation are higher than the market average. This is due to the fact that the operation is similar to a new building. The whole building has been restructured, but the shell of the building remains unchanged.
Each property has a garden, a terrace and a parking space. Also, as each lot has its own entrance and there are no common areas in the building, the properties are similar to terraced houses, which command a higher market price than flats in the area.
Given the price of new housing, and in particular houses in the Bron area, the exit price of the operation is consistent in view of the services and the type of property proposed.
The consistency of the price is supported by the estimates of two separate local agencies (Bel'Immo and AccorImm), which value the project at between €4,800/m² and €5,200/m² (i.e. an exit price per lot of between €360,000 and €385,000). The marketing of the lots has been entrusted to these two agencies and will begin once the land has been acquired.
The project is located in a suburban area mainly composed of houses or small apartment buildings. Close to all amenities, the property is less than 500 m from Bron's town hall and police station, several shops, including a supermarket, local shops (hairdresser, optician, bakery, restaurants, etc.) and services (including banks).
A bus stop is located at the foot of the residence and a tram stop (line T2 and T5) less than 400 m away. The Lyon metro and the centre of Lyon can be reached in less than 30 minutes.
The operation is carried out by SAS SBDC BRON, with a capital of 90,000 euros, registered in the Lyon trade and companies register under number 891 561 748, on 01/12/2020.
It is 95% owned by Mr. Sébastien BOULON and 5% by Mr. DA COSTA. It will carry the bond issue.
In order to comply with the regulatory provisions concerning bond issues, SAS KMSB, which is wholly owned by Mr. BOULON, will provide its First Demand Guarantee.
The bond will be issued by SAS SBDC BRON at an annual rate of 10% per year, for a period of 18 months. The bond will be reimbursed by the operator as sales are made, the interest is paid annually but guaranteed for a minimum period of 6 months.
In order to provide additional guarantees, the repayment of the bond is secured by :
* A 1st rank mortgage in favour of Raizers representing the bondholders' mass
* Personal guarantees from Mr DA COSTA and Mr BOULON
* First demand guarantees from SAS KMSB and SC DC MANAGEMENT
* Loan to Value (bond / turnover): 59 %
* Loan to Cost (bond/ cost at acquisition): 70 %
* Loan to Acquisition (bond / cost of acquisition): 135 %
Mr. BOULON, 34 years old, has been an entrepreneur in the sector for more than 10 years, having worked as a hotel manager and co-founder and manager of a company specialising in the bedding trade before creating a company specialising in the import, processing and trading of coffee. He sold the shares of this company at the end of 2018. He then created KMSB in order to engage in real estate operations by mastering the entire chain, from prospecting to the technical part. In addition to being present on the building sites, he is responsible for the administrative and commercial aspects of the structures in which he is associated with Mr. DA COSTA.
Mr. DA COSTA, 33 years old, is the man of the art of the structure. He has always worked in the construction industry, particularly as an electrician, as he studied in this field. He set up his own structure in 2012 in electrical work, finishing work and renovation, a structure which ceased its activity in favour of that of SABATY, the new structure in which he is associated with Mr BOULON.
As the SBDC company was recently created, it has not yet published any balance sheets. The balance sheets presented below are those of the holding company of the main shareholder of SBDC BRON (Mr BOULON) as well as the accounts of the works company, SARL SABATY.
Balance sheet KSMB (Holding Mr Boulon)
Income statement KSMB (Holding Mr Boulon)
Balance sheet SARL SABATY (work company)
Income statement SARL SABATY (work company)