|Criteria||From a+ to d||Project rating|
Macro Location Analysis
EvoEstate Risk rating is of an informative nature only & can not be considered investment advice.
It concerns the financing of a development of 14 individual housing units in Sale in the State of Future Completion* (within a co-ownership where each housing unit has an individual entrance) at 55, impasse les Charmettes – 30900 Nîmes.
In addition to the new housing, the land also includes a house that is currently rented, in which a lot of work is needed. The operator will resell the house at the end of the operation, as is. The market study and the price per m² do not take into account this unit, which is somewhat unconnected to the operation and the market.
The project offers simple but well-designed homes that are in keeping with the times, with photovoltaic panels on the roofs to reduce the consumption of the homes and to allow for the resale of the surplus electricity to suppliers. In addition, each home has two parking spaces and a fully equipped kitchen.
Les Charmettes is located in a mainly residential environment, composed of small collective buildings and individual houses. The project blends in with the local urban fabric.
To date, the operator has achieved 90% of the pre-commercialisation sales on the project, i.e. 13 new units reserved out of 14, to which must be added the existing house. The last new unit is under option, as the reservation contract has not yet been signed.
The land was recently purchased and the operator is calling on Raizers to refinance part of its equity invested in the operation.
The project is being carried out by STS, a Nîmes-based real estate developer managed by Ms. Stéphanie SAGNARD, who has 20 years of experience in the real estate sector.
It should be noted that the operator has already borrowed and reimbursed in advance the Raizers investors on a previous operation.
STS is supported by the Caisse d'Epargne Languedoc Roussillon for the financing of this project, a leading French bank which also grants its Financial Guarantee of Completion.
* It consists, for a purchaser, to buy a housing on plan and thus not completed. The Sale in the State of Future Completion is a contract between the buyer and the developer that guarantees the completion of the construction for the buyer and allows the developer to be paid as the work progresses. To do so, a payment schedule is set by the developer and the balance is paid upon delivery of the property by the buyer. In the case of a Sale in the State of Future Completion sale for residential properties, the developer is obliged to subscribe to a GFA (see definition) to guarantee the completion of the work.
In addition, there are tax advantages linked to the purchase of a Sale in the State of Future Completion: reduced notary fees because it is new real estate (2 to 3% compared to 8% on old real estate), the Pinel law which allows you to benefit from tax advantages by renting the property for a minimum of 6 years, or the zero-interest loans to finance up to 40% of the purchase of a new property, the costs of which are covered by the State.
*The existing house will be sold at the end of the operation. Renovation works are necessary in the house and the operator does not wish to carry them out, which explains the discounted price compared to the market.
The exit price of the operation is in line with the new housing market in the sector, which is also supported by the level of pre-sales posted by STS on this project.
It should be noted that the sale price of the last free lot is slightly higher than the average price of the operation, the operator wishing to maximize its turnover on this last unit now that the commercial risk of the operation is almost zero.
The project is located in Nîmes, the capital of the Gard region with over 150,000 inhabitants. The city is experiencing strong demographic growth (+0.7% per year on average, compared with 0.1% on average in France), which is expected to continue to increase by 2030. Nîmes is located 30 minutes from Montpellier, 1.5 hours from Marseille and 2 hours from Lyon.
Numerous urban projects are underway to renew and enhance the city: a multimodal hub, a new district, a convention center, a new urban thoroughfare...
The program is located less than 15 minutes from the Nîmes Arena and 2 km from the Nîmes University Hospital and the T2 streetcar bus line, in a quiet, residential area 1 km from the amenities of the Valdegour district (shops, schools, etc.).
The operation is carried out by the SCCV LES CHARMETTES, with a capital of 100 euros, registered in the Nîmes Trade and Companies Register under the number 838 851 509, on 11/04/2018.
The SCCV LES CHARMETTES, which carries the Les Charmettes operation, is 99% owned by its parent company, SAS STS, which will carry the bond loan, and 1% by SAS F.I.R.S.T.
The bond will be issued by SAS STS at an annual rate of 9% per year, for a term of 18 months. The bond will be repaid at maturity by the operator, 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 loan is guaranteed by:
* Personal guarantee of Mrs. Stéphanie SAGNARD
* First Demand Guarantee of the SCCV LES CHARMETTES
All the documents associated with this fundraising are available in the "documentation" tab.
Note that the operation is subject to a financial completion guarantee, granted by the Caisse d'Epargne Languedoc Roussillon. The financial guarantee of completion is an insurance given (by a bank or an insurer) to a real estate developer on behalf of the purchasers under compromise of the real estate to be built. This insurance gives the guarantee that in case of default of the developer, the construction will be completed and the purchased goods will be delivered.
It is delivered by an insurer who, in exchange for a percentage of the construction cost and several guarantees (mortgage, first demand guarantee, personal guarantee of the manager...), undertakes to pay for the construction in case of default of the builder. Note that for commercial real estate operations, the financial completion guarantee is not mandatory. It is, however, mandatory for residential real estate.
The activity of STS Promotion revolves around 3 axes:
1. The setting up of real estate operations
The realization or the takeover of housing programs, offices and residences for seniors. Operations pre-sold in block to investors or specialized operators, such as social landlords, or commercialisation of apartments to individuals and investors (Sale in the State of Future Completion), either by commercialisation networks or by real estate agencies based in the project city.
2. Development - subdivision
STS Promotion acts as a developer for ZACs (urban development zones) or general operations for which it has prior control of the land.
3. Project management assistance
For the follow-up of all types of real estate or land operations (housing programs, senior residences, business premises, etc.).
Sole shareholder, Stéphanie SAGNARD, 54 years old, of French nationality, created in 2001 the company STS Promotion which she developed gradually to pass, in 5 years, from modest operations (housing estates, purchase and resale of land) to real estate programs of larger scale.
It has carried out more than twenty operations in the Nîmes and Montpellier area. These operations have enabled STS Promotion to increase its statutory reserves by 1.4 million euros.
Balance sheet of STS
Income statement of STS