Invest in subsidized housing with an 11.5% annual return

We bring you a new project on the platform, the fifth one in October and the first debt-based project. This time, we return to the Community of Madrid to invest in subsidized housing with an 11.5% return over 12 months. It will open for funding next Friday, October 18 at 12 p.m. (UTC+2). Interested? Here are all the details.

The Balcón del Sur project consists of a bridge loan to partially finance the purchase of land in Navalcarnero, Madrid, for the development of a residential cooperative project with 144 limited-price public subsidized housing units (VPPL).

The 144 VPPL units will have three bedrooms, two bathrooms, large terraces, and extensive common areas with a pool, patio, and private garden. As for the location, it’s worth noting that the project is less than 30 km from the center of Madrid, a 25-minute drive via the A-5 or R-5, and is also well connected by bus. Additionally, Navalcarnero is a town undergoing significant real estate expansion, as it is considered the most affordable and peaceful alternative near Madrid. It’s no surprise that its population has grown by 13% since 2018.

The developer behind the Balcón del Sur project is Urbanismo y Gestión, with nearly 40 years of experience in the industry and over 9,000 homes delivered. In Madrid alone, the developer has completed more than 50 cooperative housing projects, totaling around 1,800 homes. Balcón del Sur is their second project in Navalcarnero, following the success of their first development of 102 units, which is now 100% sold and in the process of handing over the keys.

11.5% return in 12 months

The Balcón del Sur project follows a debt strategy. Urbanitae investors will participate by providing a loan in a single tranche with a fixed annual interest rate of 11.5% for 12 months to partially finance the acquisition of the asset. Urbanitae investors will exit the project via bank refinancing after achieving two milestones: (i) approval of the construction permit and (ii) reaching 70% of sales—100 units sold.

Urbanismo y Gestión will contribute approximately €2.85 million for the purchase, which accounts for 35% of the purchase price.

There is no construction permit yet, but it will be requested before the end of the year, and the developer expects it to be approved within 5 to 6 months, based on their experience with the Navalcarnero City Council.

Mortgage guarantee and minimum 12-month return

The total loan amount is up to €5,370,000, with €5,000,000 to be financed by Urbanitae investors via the platform, and the remainder by external investors.

Full early repayment will be allowed at any time, subject to a minimum guaranteed return equivalent to 12 months of interest. A six-month extension is possible after the 12th month.

Regarding the repayment guarantees, the loan agreement includes a first-ranking mortgage guarantee on the registered property that comprises the project (the land), overseen by a guarantee agent.

In this video, the developer and our Director of Real Estate, Sergio Arana, explain the key aspects of the Balcón del Sur project.