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We present our first project in Portugal, which will open for investment next Monday, March 25th at 4:00 p.m. (UTC+1).
The Barao Forrester project involves the acquisition of an asset for renovation and transformation into a complex of 96 tourist apartments. The manager of this operation is Caler Real Estate Advisory, a company specialized in off-market real estate investment structuring for commercial and residential assets, including hotels, offices, and retail spaces.
The project is located in the city of Porto, specifically on Rua Barao Forrester.
Fixed lease contract for 25 years
The operation will be structured through a capital increase, where Urbanitae investors along with additional private investors will make a capital contribution to the operation’s vehicle company. This vehicle company plans to seek bank financing for the project’s development, which is well advanced with a financial institution. The contribution from Urbanitae investors will be equivalent to €5,000,000.
The promoter’s investors will invest the equivalent of a 15% stake, totaling €1,000,000, aligning the interests of the promoter and Urbanitae investors.
It is also important to note that a lease contract has been signed with NUMA, for 25 years with a mandatory compliance period of 15 years. Additionally, it will provide a bank guarantee equivalent to 6 months of rent. The contract will come into effect once the asset’s renovation and transformation are completed and includes a 5-month grace period from the opening.
The building permit for the renovation has been granted. Once the investors have completed the capital increase, the asset will be acquired to start the construction as soon as possible.
The project has a strategy of capital gains and income, which involves an alliance with the promoter to address the acquisition of the asset and the costs of adaptation, management, and sale of it.
In this video, the promoter and our CEO, Diego Bestard, explain the details of the Barao Forrester project.
Profitability in 26-30 months
The estimated timeframe for this project is 26-30 months. Regarding profitability, we cannot provide exact figures, but it can be easily calculated from the project URL information. Similar to others, in the favorable scenario, which is the basis we use at Urbanitae and one we compare with third parties, profitability is calculated using the formula: (Projected revenues – Estimated costs) / Total equity.
In the second quarter of 2024, the completion of the capital increase and the acquisition of the commercial premises are expected through the formalization of the public deed of sale. Additionally, the commencement of the asset renovation works is also expected.
In the first quarter of 2026, the completion of the renovation works and the opening of the commercial premises divestment window is estimated if market conditions are favorable.
In the second quarter of 2024, the commencement of the renovation and transformation works of the Numa operation asset and the payment of the first dividend are estimated. From there, quarterly payments will be made until the divestment.
Finally, in the third quarter of 2026, divestment, company liquidation, and distribution of remaining profits to investors are estimated.
As always, you can contact us at contacto@urbanitae.com or by phone at 911 23 25 22. Get informed and don’t miss the opportunity to achieve annual rental yields of 5.4%.
