Storage units: Urbanitae’s success with Grupanxon in Madrid
Our series of success stories leads us this time to talk about a rising asset: investment in storage units. Like parking spaces, they are a guarantee of profitability and an accessible opportunity for small savers. The growing need for space, especially in large cities, increases the demand for additional storage and also the appreciation of these assets. According to Atlas Real Estate Analytics, their profitability ranges between 7% and 10%, surpassing other types of real estate.
At Urbanitae, we were pioneers in recognizing the excellent reception that this type of asset receives, and a good example of this is the success story that takes us back to May 2022, when we launched the Cuzco project: a development of 45 storage units in Madrid located on the semi-basement floor of an existing building on Infanta Mercedes Street, 29. The asset had a privileged location, just minutes from Plaza de Cuzco and the Santiago Bernabéu Stadium.
Furthermore, this investment opportunity came from one of our most trusted promoters, well-known among our investors: Grupanxon. “Cuzco” was Urbanitae’s eighth project carried out together. Most of them were closed in record time and returned to investors, improving the return on investments in all of them.
Improved timelines and IRR
As in other previous projects, the developer managed to shorten construction timelines and close the operation ahead of schedule. A total of 625 investors participated in financing the development through a fixed-rate loan for the acquisition of a parking lot where the storage units would later be located. Urbanitae investors granted a loan to the company created specifically for the project and linked to Grupanxon for an amount of 350,000 euros. The maximum ticket size in this case was 500 euros per investor.
The initial estimated profitability was 9% over a period of 12 months, resulting in an IRR of 9%. Finally, although the total return for investors remained at 9%, the timeline was shortened by four months and the IRR was improved, increasing from the initial 9% to the final 13.35%.
Keys to success
- The project is promoted by a company linked to Grupanxon, a business conglomerate with over 20 years of experience in various fields, notably real estate development, and includes its own construction company. It has developed over 600 storage units and parking spaces since 2017.
- The Cuzco Project constituted the eighth operation financed by Grupanxon on the platform. As of today, there are already 14 projects carried out jointly with Urbanitae.
- The construction permit was processed as a Responsible Declaration, so it was not necessary to wait for a favorable report from the Administration to start the works.
- Both the construction and marketing of the projects were carried out with the promoter’s own resources.
- It was a structured loan arrangement, where it was not necessary to wait for the sale of all units to receive loan returns.
- Regarding the repayment guarantees for this loan, a first-ranking mortgage promise was established in the debt contract on the property on which the storage units were developed. Likewise, a first-ranking mortgage promise was added to two other properties owned by the developer.
Crowdfunding, a successful formula for developers and investors
This new success of Urbanitae confirms the viability of crowdfunding as a successful formula and alternative to bank financing for developers like Grupanxon to carry out their projects. What are you waiting for to become part of Urbanitae’s investor network? You can contact us via email at contacto@urbanitae.com or by phone at 911 23 25 22.