Next Monday, 6 July at 16:00 (UTC+2), we will open La Seda II for investment. This is the second tranche of a loan intended to finance the development of three assets with aparthotel licences in the city of Valencia.
The project involves the construction and refurbishment of 39 tourist apartments across three buildings. They are located in some of the city’s most attractive areas: Ciutat Vella, El Cabañal and El Ensanche. Together, the assets have an approximate built area of 2,400 m².
La Seda II will also be Urbanitae’s 23rd project in the Valencian Community, where we have financed more than €51 million in real estate projects to date.
- 📅 Opening for investment: Monday, 6 July at 16:00 (UTC+2)
- 🎙 Project webinar: you can watch again the webinar for the first tranche, held in February.
A Second Tranche to Continue the Works
La Seda II corresponds to tranche B of a loan formalised in March 2026. The first tranche, already financed by Urbanitae investors, amounted to €1,660,000. It was used to finance part of the construction costs, cancel a mortgage charge and recapitalise equity previously contributed by the manager.
This second tranche amounts to €1,465,000. It will be used to finance part of the construction costs over the coming months. The total committed loan for the project amounts to up to €4,870,000, structured in three tranches.
The assets are already under construction, with different levels of progress. This is relevant because the project is not starting from scratch: the licences have been granted, works are underway and progress has increased since the financing of the first tranche.
Three Assets in Key Areas of Valencia
The project brings together three independent buildings. All of them have licences for tertiary hotel use, which allows them to be operated as tourist apartments.
The first is Conde de Trénor, located in Valencia’s historic centre, opposite the Serranos Towers. It is a building undergoing refurbishment. It will comprise 10 one-bedroom apartments, with a built area of 829 m². Its estimated progress is 36%.
The second asset is Joan Mercader, located in the El Cabañal neighbourhood. It will be a new-build infill building with 8 studio and one-bedroom apartments, common areas and a swimming pool. It has a built area of 469 m² and an approximate progress level of 32%.
The third building is Buenos Aires, located in Ruzafa, within El Ensanche. The project includes 21 studio and one-bedroom apartments, with common areas and a swimming pool, over a built area of 1,103 m². Its estimated progress is 16%.
Valencia and the Appeal of Urban Aparthotels
Valencia has consolidated its position as one of the main tourist cities on the Mediterranean coast. Its demand combines leisure, cultural, gastronomic and business tourism. As a result, occupancy is more diversified throughout the year.
The city also benefits from strong connectivity. It has an international airport, a high-speed rail network and one of the most important ports in the Mediterranean. In this context, tourist apartments with aparthotel licences fit well with urban demand seeking flexibility, location and services.
The project thesis is based on three complementary locations: the historic centre, El Cabañal and Ruzafa. These are areas with strong tourist and residential appeal. They also have a limited supply of new or refurbished product with licences for tertiary hotel use.
The Manager: Local Experience and In-House Construction Company
The manager of the project is a real estate group with more than 20 years of experience in new-build projects and full refurbishments in Valencia.
The group has its own construction company. This provides greater control over costs, planning and execution. Since the start of its joint operation in 2022, it has successfully delivered more than five projects.
The La Seda assets were acquired progressively between 2018 and 2023. During that period, the technical projects were drafted. In addition, the building permits and change-of-use licences to tertiary hotel use were processed. These licences were granted between 2023 and 2024.
Total Return of 17.1% in 20 Months
The transaction is structured as debt, through a fixed-rate loan, with the following characteristics for tranche B:
- Amount: €1,465,000
- Interest rate: 10.25% simple annual interest
- Total return: 17.1%
- Term: 20 months
- Possible extension: 6 additional months
- Minimum return: equivalent to 12 months of interest
- Payment of principal and interest: at maturity
The part of the loan allocated to construction will be drawn down through monthly certifications. These will always be subject to a favourable report from the Project Monitor.
Loan Guarantees
The loan has a guarantee package consisting of:
- First-ranking mortgage over the three underlying assets.
- First-ranking pledge over the shares of the borrower and of the mortgagor companies that own the assets.
- First-ranking control pledge, without fund intervention, over the current accounts of the borrower and the mortgagor companies.
- 100% cash sweep of future income from the sale of any of the assets, until the loan has been fully repaid.
- Passive sale mandate in favour of the lender for the coordination of the sale of the assets.
In addition, as in all debt projects, the figure of the Project Monitor is included. This agent will review construction progress, certifications and possible deviations in timing or costs. It will also approve the monthly loan drawdowns.
Exit Strategy
The expected exit for Urbanitae investors is based on two possible routes.
The first is the sale of one or more assets once the works have been completed, most likely to an operator or specialised investor. This route would make it possible to capture the value created through the granting of licences, the execution of works and the repositioning of the properties.
The second alternative is bank refinancing if the manager decides to retain the assets. In that scenario, once the buildings are operational and generating rents, a bank could replace the alternative financing and allow the loan to be repaid.
Why Invest in La Seda II
These are some of the main strengths of the transaction:
- Three assets in prime locations in Valencia, with strong tourist and urban demand.
- Building permits and change-of-use licences granted for tertiary hotel use.
- Works already underway, with progress levels of 36%, 32% and 16%.
- Local manager with extensive experience and an in-house construction company.
- First-ranking mortgage over the three assets.
- Fixed return of 10.25% simple annual interest, with a minimum return equivalent to 12 months of interest.
- Reinforced guarantee package, including pledges, cash sweep and passive sale mandate.
Return in the First Quarter of 2028
The estimated term of tranche B is 20 months, with a possible extension of 6 additional months.
The main expected milestones are:
- March 2026: formalisation of the first loan tranche.
- July 2026: granting of the second tranche and continuation of the works.
- First quarter of 2027: expected completion of the works at Conde de Trénor and Joan Mercader.
- Fourth quarter of 2027: expected completion of the works at Buenos Aires.
- First quarter of 2028: sale of the assets to an operator or investor, or bank refinancing, and expected repayment of the loan to Urbanitae.
As with any real estate investment, timelines may vary. They will depend on the actual progress of the works, commercialisation and financing conditions.
Main Risks
The main risks identified in the transaction are related to possible deviations in timing and costs during the execution of the works.
To mitigate the risk of delays, the loan has an ordinary term of 20 months and a possible 6-month extension. In addition, the manager has experience in similar real estate projects in Valencia.
As for cost risk, the business plan includes a contingency item to absorb possible cost overruns. The technical due diligence and the monitoring carried out by the Project Monitor also reinforce control over construction progress and drawdowns.
A New Project in Valencia
La Seda II allows investors to participate in the second tranche of a debt transaction linked to three assets with aparthotel licences in Valencia, a city with strong tourism potential and diversified urban demand.
The combination of locations, granted licences, construction progress, local manager, first-ranking mortgage and fixed return of 10.25% simple annual interest strengthens the appeal of this new opportunity.
The opening for investment will take place on Monday, 6 July at 16:00 (UTC+2).
Questions About the Project?
You can watch again the webinar for the first tranche of La Seda, held in February, on the project page.
You can also write to us at contacto@urbanitae.com or call us on (+34) 911 23 25 22.
