Urbanitae ends 2023 with an annual return of 16%

Urbanitae cierra 2023 con una rentabilidad anual media del 16%

Urbanitae ends 2023 with an annual return of 16%

Another year comes to an end, and it’s time to take stock. We are delighted to announce that at Urbanitae, we concluded 2023 with an annual return (IRR) of 16%. Moreover, none of our over 120 funded projects has resulted in losses for investors. Let’s review our year in this article.

This year, we reached a total of 49 funded projects, which is over 50% more than in 2022, our most active year to date. In total, we surpassed €120 million in funded projects, marking an annual growth of more than 80%. This accounts for the growth over the past few years: in 2020, we financed just under €7 million… for the entire year!

Growth in debt projects

Nearly half of the projects we financed this year are in debt. Typically at Urbanitae, the equity/debt ratio was approximately 70/30. While we remain specialists in equity operations, as developers still need a reliable partner for capital entry, our ongoing search for attractive investment opportunities has allowed us to also foster the real estate crowdlending model.

Thus, our loan projects this year total an investment close to €60 million. This modality doesn’t preclude high-ticket projects, further expanding investment opportunities. In 2023, we funded four real estate crowdlending projects of €5 million each, the maximum allowed by law, and seven more with tickets around €3 million.

“We are very pleased to have exceeded €200 million in total funding in 2023,” says our CEO. “The figures highlight the strength of the real estate sector in Spain, which continues to suffer from a lack of new housing, and demonstrate the robustness of Urbanitae’s business model, where we continue to prioritize project quality and investment security. And 2024 will be even better,” Bestard points out.

Consolidating the rental model

2023 also marked the launch of our rental projects, offering a more conservative product for investors who prefer lower risk and a return resistant to inflation.

With five such operations, four of them in collaboration with Rubica Real Estate, rental assets account for nearly 3% of the total financing – 64% corresponds to equity plus-valued projects and the remaining 33% to loans. We are confident that 2024 will bring many more of these operations, aiming to reach 20% of our business volume.

Around 70 developers

In addition to the developers who are familiar with us and continue working with us – more than 30 have financed two or more projects at Urbanitae – this year, we added around twenty new developers. Furthermore, our agreement with Neinor Homes, one of Spain’s most significant developers, is likely to result in a new partnership in our roster of developers in 2024.

Urbanitae, 16% annual return

And now, onto the most important aspect, or rather, the data that best summarizes our real estate investment model: returns. Time passes, and so do the timelines of our projects. Therefore, in 2023, we have completed and returned more projects than in any previous year, a total of 14.

As most are debt-based, which typically aim for lower returns than equity, the average IRR of the projects returned only in 2023 is slightly over 13%. However, this figure is 1.6 percentage points higher than the target. Remember, though: past returns are not a reliable indicator of future returns.

In total, Urbanitae concludes 2023 with a return of 16% after more than 30 returned projects. Our average IRR stands at three percentage points above the estimate, while the average duration – 14.5 months – is 1.5 months less than expected. These results encourage us to continue improving to bring you the best investment opportunities in this new and, hopefully, very prosperous new year.

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