Invest in Valencia with a 20% annual return

We’re presenting a new debt project in Valencia that consists of granting a loan to finance the remaining construction costs of three tertiary assets with an aparthotel licence, which together total 39 tourist apartments across prime locations in the city.

• Opening: Tuesday, 24 February at 16:00 (UTC+1)
• Webinar: Tuesday, 24 February at 12:00 (UTC+1)

The amount of Tranche A of the loan is €1,660,000, with an estimated term of 24 months (plus a possible 6-month extension) and a fixed annual interest rate of 10.25%, which implies a total return of 20.50%.

Three prime locations in Valencia

The project involves the development of three independent buildings intended for studio and one-bedroom tourist apartments, with an approximate total built area of 2,400 m². The assets are located in three of Valencia’s most established and in-demand areas:

• Conde de Trénor (Ciutat Vella), opposite the Serranos Towers – refurbishment of a building for 10 apartments.
• Joan Mercader (El Cabañal) – new-build building with 8 apartments and a swimming pool.
• Buenos Aires (Ruzafa, El Ensanche) – new-build building with 21 apartments and a swimming pool.

All three assets already have the building permit and change-of-use licence to tertiary hotel use (aparthotel) granted. They currently show construction progress between 6% and 25%, with the structure already completed in two of them. Valencia has become one of the most attractive urban destinations in the Mediterranean, with strong and diversified tourist demand throughout the year—leisure, cultural, gastronomic and business tourism—excellent national and international connectivity, and a growing professionalisation of the alternative accommodation market. In addition, the project includes a specific market study on rents and exit values, with the information available in the project documentation.

10.25% annual loan

This is a debt project in which Urbanitae investors will grant a fixed-rate mortgage-backed loan to the project’s special purpose vehicle (SPV). The loan will finance:

• The remaining construction costs until completion of the works
• The repayment of an existing mortgage charge on one of the assets
• The partial recapitalisation of equity funds already invested

The interest rate is 10.25% simple annual, with interest and principal paid at maturity, and a minimum return equivalent to 12 months of interest in the event of early repayment. The investor exit is planned via the sale of the assets once construction is completed to an operator or investor, or alternatively through bank refinancing if the manager chooses to hold the buildings and operate them as income-producing rental assets.

Loan guarantees

The loan includes a strengthened guarantees package:

• First-ranking mortgage over the three assets
• First-ranking pledge over the borrower’s shares and the owning companies’ shares
• Control pledge over the bank accounts
• 100% cash sweep of sale proceeds until full repayment
• Passive sale mandate in favour of the lender

In addition, as with all debt projects, an independent project monitor participates, supervising construction progress and approving certifications prior to each drawdown. In this video, we explain the project’s key points and structure.