As the year draws to a close, we bring you a new rental income project—our sixth in 2024 and tenth overall on Urbanitae. This time, it involves the acquisition of an apartment hotel in Valencia. The project will open for investment on Wednesday, December 18, at 4:00 PM (UTC+1). Below, you’ll find all the details.
Located in Valencia’s Extramurs district, the Pérez Galdós project involves the acquisition of a 13-room apartment hotel for operation and subsequent sale to a long-term real estate investor. These accommodations are already operated by Alma Suites, a nationally recognized operator focused on Valencia.
The asset is situated in Valencia, in the Arrancapins neighborhood, specifically at 52 Avenida Pérez Galdós. It consists of eight registered units located on the ground and first floors of a mixed-use building, with a gross leasable area (GLA) of 814 square meters. The Extramurs district, home to over 50,000 residents, offers excellent transport connections, including a train and high-speed rail (AVE) station.
This opportunity is managed by Viviz, a company specializing in new-build development and real estate asset management. Viviz also focuses on creating platforms and vehicles for real estate investment. Their experience includes projects for developing and managing apartments for rent, such as Alma Goerlich and Alma Calatrava, both in partnership with Alma Suites.
6.5% annual return indexed to CPI
The Pérez Galdós project follows a value-add and rental income strategy, which entails partnering with the developer to manage the acquisition, operation, and eventual sale of the asset. Contributions from Urbanitae investors will fund the entire project, including the purchase of the property. The contribution from Urbanitae investors will represent 90% of the total equity required, amounting to €2,405,000, while the remaining 10% will be provided by the current owner of the asset.
Viviz has signed a fixed-term lease agreement with Alma Suites for 10 years, with a mandatory commitment for the first five years, followed by a mutually binding renewal for another five years (5+5). Alma Suites will sublet the apartments individually to both tourists and medium- to short-term clients, guaranteeing the agreed-upon rental payments. Additionally, the operator has provided a bank guarantee equivalent to four months’ rent and a legal deposit equal to two months’ rent. The lease agreement has already been signed, and rental payments will commence immediately upon acquisition of the asset.
The project is expected to generate an average annual dividend of 6.5% from the acquisition date. The rental income will be reviewed annually, applying the percentage increase (but never a decrease) in the Consumer Price Index (CPI). The asset will be operated for a total of three years, with an exit window starting after year two. At the end of this period, the property will be sold to a long-term real estate investor. The tenant has also expressed interest in purchasing the asset at the end of this period, subject to favorable conditions.
The asset is currently operational and fully licensed, so no municipal administrative procedures are required.
In this video, the developer and Sergio Arana, Urbanitae’s Director of Real Estate, explain the project highlights.
Exit in 2028
The Pérez Galdós project has an estimated investment horizon of three years (36 months). According to the investment timeline, dividends will be paid quarterly—at the end of each calendar quarter starting from the effective purchase date of the asset. Operations are expected to commence in January 2025.
The first dividend payment is scheduled for the first quarter of 2025 and will continue quarterly until the divestment stage. Divestment, liquidation of the company, and distribution of the remaining profits to investors are expected to occur between the fourth quarter of 2027 and the first quarter of 2028.
Got questions?
We’re hosting a webinar with the developer on Monday, December 16, at 10:00 AM (UTC+1), where you can ask your questions. You can also reach us via email at contacto@urbanitae.com or by phone at (+34) 911 23 25 22.
We look forward to seeing you!
