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Macro Location Analysis
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Purpose of the loan
The operator, Sindy Levy, acquires a building located at 86 rue du Faubourg Saint Antoine in Paris 12ème, between the place de la Nation and the place de la Bastille.
The building is composed of commercial space on the first floor and 1st floor (rented to HEMA) and 5 apartments for residential use on the upper floors. It will be renovated and resold.
The operator will then carry out a revaluation of the HEMA lease, currently under negotiation, and will begin the renovation work on the apartments. The work will begin as soon as the tenants leave the building, scheduled for May.
The planned term is 24 months in order to guarantee flexibility to the operator and benefit from the collection of rents.
The collateral taken on the loan is as follows:
* First demand guarantee from the Holding Foncière de l'immobilier
* Personal guarantee by Sindy Levy
* The 1st year's interest will be locked in an escrow account
* Irrevocable payment order
The building is currently owned by SA Cineperma, and Simha is buying 100% of the shares of SA Cineperma. The asset is a building with a total surface area of 720 sq.m. and an elevator. It is currently fully leased: the first floor and first floor are used for commercial purposes and the rest for residential purposes.
The work carried out concerns:
* The facade restoration for 70 876 €.
* The renovation of the five apartment lots for 1639 €/m² TTC
The renovation work will be carried out by the company Logitec (company created in 1982, with a turnover of 3 400 000 € in 2019).
Commercialisation will take place once the acquisition and merger have been completed, as well as the work and revaluation of HEMA's lease.
The commercial premises are currently leased to HEMA, a Dutch retailer of low-cost home furnishings and decoration. This brand is present nationwide in France and had a turnover of €56,000,000 in 2015.
Currently, HEMA's rent is €172,935 per year, i.e. €400/m², which seems undervalued for the location. The lease expressly provides for a clause allowing the rent to be revalued on the basis of current market prices at its expiration. The lease expires on 30/06/2024. On November 4, 2020, the operator received a renewal offer from HEMA, under the following conditions:
* Early renewal of the lease effective July 1, 2021 for a term of 6/9/12 years (of which 6 years firm)
* Rent for the first three-year period (from July 1, 2021 to June 30, 2024): €180,000 (excl. tax) per year;
* Rent from the 2nd three-year period (i.e. from 01/07/2024): €350,000 excl. tax/year
For this offer, the average annual rent (over 12 years) is €307,500, i.e. €710/m² (still below market prices).
Rented commercial premises
The sale price of the commercial part leased to HEMA is valued using the capitalization method. The price is estimated on the basis of an expected rate of return in relation to the annual rent.
Expected returns in Paris intramuros vary from 3% for the best locations to 11% for secondary locations.
The operator's projection is made according to the rent revaluation and ongoing discussions:
The market price is totally coherent with the average market prices in Paris. The average price found on the rue du Faubourg Saint-Antoine is rather 11,487 €/m² (source: Meilleurs Agents). Taking into account the qualitative renovation carried out on the apartments, the 14% higher price (compared to the price per square meter on the Meilleurs Agents website) remains consistent with market prices.
The building is located at 86 rue du faubourg Saint-Antoine, in the heart of Paris in the 12th arrondissement and directly adjacent to the 11th arrondissement (across the street). The Place de la Bastille is 500 meters away, the Place de la Nation 1.5 kilometers away and the Gare de Lyon 950 meters away. Line 8 passes at the foot of the building.
This artery is one of the oldest in Paris and has always been very commercial. Today, many stores (ready-to-wear, decoration, sport) but also many restaurants and bars are referenced in this street.
SASU SIMHA, which will carry the loan, will acquire all the shares of SA Cineperma holding the assets by June 30, 2021 at the latest. On the day of the acquisition, the merger of the two companies will be completed and the operator has a deadline (seller's credit) allowing it to settle the acquisition once the merger of the two companies has been completed, within 31 days. However, the seller wants the funds to be sequestered before the actual payment.
The transaction is carried out by SASU SIMHA, with a capital of 1,000 euros, registered in the Créteil Trade and Companies Register under number 890 920 945, on 12/11/2020.
SASU SIMHA, which carries the "Rue du Faubourg Saint-Antoine" operation and the bond issue, is wholly owned by its parent company, SAS Holding Foncière de l'immobilier.
To comply with the regulatory provisions relating to bonds, SASU SIMHA has had an audit of its assets and liabilities carried out by an auditor.
The bond will be issued by SASU SIMHA at an annual rate of 10% per year, for a term of 24 months. The bond will be amortized and reimbursed by the operator as sales are made, with interest paid annually, but guaranteed for a minimum period of 6 months.
The interest for year 1, i.e. €180,000, is sequestered by Raizers until it is paid at the annual date.
In order to provide additional security, the repayment of the bond is guaranteed by:
* Personal guarantee of Mrs. Sindy Levy
* First Demand Guarantee of the Holding Foncière de l'Immobilier
* Irrevocable payment order
The bond contract provides for early redemption if:
* Sale of the entire building
* Achievement of commercialization proceeds in excess of €8,000,000
Ms. Sindy Levy, 37 years old, began her real estate activity within the group La Tour Immo in 2004, first as a manager and then for more than 5 years as director of property management.
From 2011, she started to work on real estate operations, targeting the acquisition of buildings. She reinvests her property profits in real estate transactions and since 2018, she has been carrying out real estate transactions based on the valuation of buildings. She specializes in the creation of "asset portfolios", which are resold to institutional investors. She sources these opportunities from her network developed over the last few years.
She currently owns five real estate companies with which she carries out her real estate transactions, associated with various partners. The share capital of her holding company is € 3,094,743 with which she holds her real estate companies and her property investment trusts.
Financial elements of SASU Simha
SIMHA was created in November 2020 and will close its first accounts on 31/12/2021.
Financial elements of SAS Holding Foncière de l'Immobilier