Are you looking for a profitable investment with low risk? At Urbanitae, we bring you a new rental project – our most conservative type. It’s an opportunity to invest in Valencia with an almost 8% annual return for three years. We open it for funding on Thursday, May 30th at 4:00 PM (UTC+2).
The Apartamentos Campanar project is located in Valencia, in the Campanar district, and involves the development of 20 tourist apartments. In this project, we will purchase an office floor to renovate and transform it into 20 tourist-use apartments (with boarding house license). These apartments already have a national operator focused on Valencia, Alma Suites.
The asset consists of 20 registered properties located on the ground floor of a mixed-use building, with a gross leasable area (GLA) of over 1,800 square meters. This building is in the Campanar district of Valencia, 2.5 kilometers from the city center and a 10-minute drive from the airport.
The developer is Viviz, with whom we have previously financed an equity operation also in Valencia, the Montesano project.
Periodic rents of 7.75% annually
This project has a strategy of capital gain and rental income. Urbanitae investors will partner with the developer to handle the acquisition of the asset and the costs of adaptation, management, and sale of the same. No bank financing is planned. The contribution corresponding to Urbanitae investors will be equivalent to 3,345,000 euros.
The tourist apartments are leased to Alma Suites. The lease contract provides for a fixed annual rent of 240,000 euros (1,000 euros per apartment per month). This rent will be reviewed annually according to the variation of the CPI; however, exclusively upwards. The asset will be managed for a total period of three years (exit window from year 2), at which point it will be sold to an investor with a patrimonial profile. Additionally, the tenant is interested in acquiring the asset after this period if the situation at that time is suitable.
According to the lease contract and the construction budget, it is estimated that the project will generate an average annual dividend of 7.75% from the completion of the work. This lease contract will allow Urbanitae investors to receive a quarterly distribution of capital from the start-up of the asset. The total profitability of the project can be calculated from the data available in the project file: (forecasted income – estimated expenses) / total equity.
The payment of the first dividend is scheduled for the first quarter of 2025, while the divestment, liquidation of the company, and distribution of the remaining profits to investors are expected in the second quarter of 2027.
The building permit for the renovation is processed through a responsible declaration; therefore, it is not necessary to open a file with the municipal administration. The developer has already processed the boarding house license with the City Council, a declaration through which spaces can be exploited for tourist purposes.
In this video, our CEO, Diego Bestard, and the developer explain the details of the Apartamentos Campanar project.
However, if you have any questions, you can ask them in the webinar we will hold with the developer on May 28th at 5:00 PM. Get informed and take the opportunity to invest in Valencia with almost an 8% annual return.
