Following approval at the Extraordinary General Shareholders’ Meeting, we are proceeding with the final repayment for the Lazaga Beach project, in which our investors participated in January 2022.
With this last payment, equivalent to 10% of the share capital, the investment is now fully settled.
What was Lazaga Beach?
Lazaga Beach was a residential value-add (capital gains) project to develop and promote a residential community in Estepona (Málaga), in the heart of the Costa del Sol.
The investment was structured through participation in the share capital of the development company, with the aim of executing the development, completing construction, and generating capital gains through the sale of the homes.
At launch, the estimated projections were as follows:
- Estimated term: 26 months
- Estimated return (CoC): 34.10%
- Estimated IRR: 14.50%
A development affected by delays and rising costs
The project was impacted by significant delays in obtaining permits and by construction-related issues, which extended both execution and the final wind-down.
This was compounded by a particularly challenging environment for developers between 2022 and 2024, with notable increases in:
- Construction costs
- Financing costs
Although sales proceeds were slightly higher than initially projected, the rise in costs reduced the expected return versus the launch scenario.
Final outcome for investors
Despite this context, active management made it possible to close the project with a positive outcome for investors.
Final figures were:
- IRR: 6.58%
- Total return: 27.16%
- Term: 47 calendar months (approximately 45 weighted months)
With this final repayment, together with the reimbursements made in October and January, the total returned amounts to 127.16% of the initial investment.
The difference between initial estimates and the final result is mainly explained by the combination of a longer project duration and a significant increase in costs—factors that directly impacted both the IRR and the expected return.
Lazaga Beach was delivered during an especially demanding cycle for the real estate sector. Closing with a positive return, despite delays and an inflationary backdrop, highlights the importance of active monitoring, prudent risk management, and diversification within an investment portfolio.
