Detail Descripton

We present a new project that consists of the acquisition of office space for its subsequent adaptation, reform, leasing and sale to a patrimonial investor, located in the Sagrada Familia neighbourhood (Barcelona).

Video about the project.

The project is located at 233 Roger de Flor street, in the heart of Barcelona, ​​next to the main tourist attractions of the city and the Poblenou and La Dreta de l'Eixample neighbourhoods. It is a consolidated residential area, surrounded by numerous services such as schools, restaurants, and shops (Mercado de la Sagrada Familia and Mercado de la Abacería) and that benefits from the extensive public transport network in the city center.

The  Eixample district occupies the central part of the city and is the most populated district in Barcelona (around 265,000 inhabitants). Eixample includes some of the best-known streets and squares in Barcelona, ​​highlighting the Passeig de Gracia, the Rambla de Catalunya and the Plaza de la Sagrada Familia.

PROJECT DESCRIPTION

The promoter of this opportunity,  PSQUARED,  is a company linked to the digital and real estate sector led by a management team with more than 10 years of experience. PSQUARED's activity   is focused on the acquisition of office spaces of up to 2,000 m ² , mainly in Barcelona, ​​for their subsequent retrofit, rental and commercialization. The promoter will be the integral manager of the opportunity and will carry out all phases of the project development (more information about the promoter can be found in the documents section).

The project materializes in the purchase of a 638 m ² office space distributed on the ground floor and basement,  with an independent entrance, located in a mixed building in the  Sagrada Familia neighbourhood (Barcelona). The developer will reform and adapt the office space and will sign a  lease  (already negotiated) for a period of  15 years  with a  mandatory compliance of 5 years  that will come into effect in December 2021, once the reform is completed.

Throughout the life of the contract,  PSQUARED will sublease  the office space to a  final tenant , under the commitment to comply with the rent agreed in the lease . The promoter already has a  letter of intent signed  with a Barcelona-based startup for the sublease of the space. The adaptation of the office space will include the implementation of the final tenant, so that the furniture and equipment will remain under the ownership of the vehicle company created for the development of the project. The project will be able to distribute the rents on a quarterly basis , once the work is completed.

The lease contract with  PSQUARED  provides for a  staggered rent , so that the net rent that will be paid will increase from € 17 / m ² / month  at the start of the contract to € 21 / m ² / month in September 2022, date target for sale to an equity investor at a  target exit return of 6.5% . Income will be reviewed annually by applying the percentage variation, exclusively upward, experienced by the General Price Index (CPI). You can review a draft of the lease that will be signed with the developer within the documentation.

The building  permit  for the reform is processed through a  Responsible Declaration ; therefore, it is not necessary to open a file with the Municipal Administration, so the works will begin once the capital increase has been carried out by Urbanitae investors.

The project has a capital gains strategy, which consists of an alliance with the developer to face the acquisition of the space and the costs of adapting and selling it. The contributions of Urbanitae investors will be delivered to the promoter through a capital increase to the vehicle company that develops the project:  PSQUARED THE HAUS, SL

STRUCTURE

The operation will be structured via equity (capital increase) , where both the promoter and Urbanitae investors will make a capital contribution to the company vehicle of the operation. The contributions will allow the complete development of the project, including the acquisition of the asset, its subsequent reform and all the costs derived from it. The operation does not plan to resort to bank financing. The seller will transmit the property free of charge to the company.  

The promoter will be dedicated to the integral management of the development, including the reform and marketing to the final investor. He will also be an investor in the project, contributing about 11% of the total investment capital.

WHY INVEST?

There are several reasons to invest in this project: 

• Investment opportunity in a  purchase, reform and sale project.
• The estimated total net profitability of the project, according to the Business Plan, is  17% in 15 months.
• The project will be promoted by  PSQUARED , a business group with experience in the reform, leasing and commercialization of office spaces in the center of Barcelona.
• The project promoter invests its own capital, which aligns the interests of all the agents involved in the investment.

COST-EFFECTIVENESS

The developer expects to generate an income of 2,456,300 euros from the sale of the office, in addition to an income of 131,237 euros from the rental of the space during the first 10 months of the contract, from December 2021 to September 2022. The profit resulting from the operation will be distributed according to the structure capital of the vehicle company. In total, a net profit is estimated for the Urbanitae investor (after expenses and taxes) of around 1.17 CoC in an approximate period of 15 months.

MARKET

A market study has been carried out to determine if the rental income and the sale price raised by the developer are reasonable. There are office floors for rent with similar characteristics in the area, along with some office floors for sale that, unlike The Haus project, are sold without a tenant.

There is information available on the market within the documentation, "Sales witnesses", where you will find a list of offices for rent and for sale in the area.

WHEN WILL I RECOVER THE MONEY INVESTED?

The estimated term of this project is  15 months .

• September 2021,  acquisition of office space and start of works.
• Fourth quarter 2021 , end of the reform and entry of the tenant.
• Third quarter 2022 , sale of the office space in profitability to a final investor.
• Fourth quarter 2022 , liquidation of the company and distribution of profits to investors.

It is important to bear in mind that in any real estate development the terms can vary both upwards and downwards.

The commercialization to the equity investor will begin simultaneously at the beginning of the project and the promoter expects to materialize the sale throughout the 15-month duration of the project. 

RISKS

All investments carry risk. We detail the clearest risks we have identified for this project: 

• Increase in the terms foreseen in the project, due to delays in the reform and/or sale of the opportunity.
• Diversion of fixed costs associated with the reform .
• Increase in the terms foreseen due to possible difficulty in finding an  equity investor . 
• Possible  deviations in the profitability of the project due  to the need to lower the sale price to the final investor. 

PROJECT OWNER

Psquared is a company linked to the digital and real estate sector led by a management team with more than 10 years of experience. Psquared's main activity is focused on the acquisition of office space in Barcelona for its subsequent retrofit and commercialization. Psquared is a company linked to the digital and real estate sector led by a management team with more than 10 years of experience. Psquared's main activity  is focused on the acquisition of office space in Barcelona for its subsequent retrofit and commercialization. 

ECONOMIC INFORMATION

ESTIMATED PROFITABILITY