Passeig de la Pau closes with a 38% return and an 11.49% IRR

The most anticipated moment in a project’s lifecycle has arrived: the repayment. We have now fully completed more than 80 investments, representing over €144 million returned to no fewer than 52,000 investors who have entrusted not only their capital, but also their confidence, to Urbanitae.

Today it is the turn of Passeig de la Pau, in which 757 investors participated in July 2022. Following the third and final distribution, the project is now fully closed, after having previously returned part of the capital and the profits generated.

What was Passeig de la Pau?

Passeig de la Pau was a residential value-add project for the development of a new-build promotion in Santa Eulalia del Río (Ibiza).

The project included the construction of a residential complex comprising:

• 24 homes with 2 and 3 bedrooms
• 2 commercial units
• 35 parking spaces and 28 storage units
• Common areas with a swimming pool, landscaped gardens, chill-out area and gym

The investment was structured through participation in the developer’s equity, with the aim of generating returns through the development and sale of the units.

Solid execution and delays in the final phase

From a construction standpoint, the project progressed as planned:

• Construction start: December 2022
• Construction duration: 22 months, in line with expectations
• Completion and issuance of the completion certificate in 2024

However, the final phase of the project was affected by two main factors:

1. Administrative process. The issuance of the first occupancy license required technical adjustments requested by the local council, delaying its final approval.
2. Sale of the last units. The sale of the final two homes was impacted by a slowdown in the local market, extending the liquidation process.

To avoid further delays and facilitate the investors’ exit, the developer opted to acquire these units at market value, allowing the project’s outcome to be realised.

Final return of 38%

Despite these adjustments in the final phase, the project closes with a positive and competitive result.

Final figures are as follows:

• Total return (CoC): 38.04%
• IRR: 11.49%
• Duration: 45 months (36 months weighted)

Overall, the project distributed a total of 138.04% of the initial investment, through several repayments, including this final distribution in the form of share capital and dividends.

It is worth noting that sales revenues exceeded initial forecasts, which helped offset the impact of delays in the final stage of the project.

The value of active management

Passeig de la Pau is a good example of how a project can maintain an attractive outcome even when adjustments arise in its final phase.

Construction was completed as planned, and active management in both sales execution and decision-making – such as the developer’s acquisition of the remaining units – made it possible to:

• Avoid unnecessary extension of the project
• Protect investor returns
• Close the investment in an orderly manner

The closing of Passeig de la Pau highlights the importance of continuous monitoring and adaptability in real estate investment projects, especially in environments where administrative or commercial factors may affect expected timelines.