Since Urbanitae began operating in June 2019 as a crowdfunding platform authorized by the CNMV, many projects have been successfully financed. However, undoubtedly, one of them holds special significance for us: Hortaleza, the first operation we launched immediately after receiving authorization. It involved the development of a new residential project in this Madrid district.
The project’s developer, Home First, is a company comprised of real estate professionals with nearly 20 years of experience, specializing in small and medium-sized developments with an exclusive product offering.
The project entailed the construction of 7 homes and parking spaces in the Canillas neighborhood, northwest of the capital, with convenient access to the M-30 and M-40 highways. The work included the demolition of an existing building to make way for the new homes and garages.
Significantly improved IRR by 17 points
A total of 53 investors ultimately participated in financing this first Urbanitae project openly, with a contribution of €615,000. The financing was based on a capital gains strategy, and investors became shareholders in proportion to their contribution to the project. The capital and interest were repaid in March 2021, 21 months later.
The initial estimated return was 35% over 23 months with an IRR of 18%. Ultimately, though the total return for investors was 24.9%, the timeline was shortened by two months, and the IRR was significantly improved, going from the initial 18% to the final 35%. This significant increase in the IRR was due to an early capital return (where most of the profitability was returned to investors), followed by a surplus payment at the 21-month mark.
The success of this development was marked by various factors:
- The project was promoted by Home First Real Estate, a developer led and conceived by investment and real estate promotion specialists with a long track record.
- Home First managed the entire development and contributed 50% of the necessary capital for its realization. The remaining 50% was invested through Urbanitae.
- The residential development is located in the northwest area of the capital, where there is high demand for flats, especially among the younger population, and where housing prices are more moderate than in the city center. It is also an area of interest for retail investors looking for residential properties to buy and rent.
Home First’s commitment to crowdfunding
Following the positive reception of this development, Home First once again placed its trust in Urbanitae and collaborative investment, with a new project just two years later: a loan for the development of a residential project – 9 homes, 6 parking spaces, and 9 storage units – in La Latina, in the Lucero neighborhood, just minutes from Madrid’s Casa de Campo.
This new success for Urbanitae once again confirms that crowdfunding is a reliable financing formula as an alternative to bank financing, and it is also a great opportunity for any investor to participate in significant projects and benefit from high returns. If you want to become part of Urbanitae’s investor network, you can register and explore all our projects here. If you have any questions, you can contact us at contacto@urbanitae.com or by phone at 911 23 25 22.
