Arianna II: new 13% annual tranche for a hotel and luxury villas on the Tuscan coast

Next Friday, May 15 at 12:00 p.m. (UTC+2), we are opening for investment Project Arianna II, the continuation of the Arianna project, a real estate debt transaction in Italy aimed at financing the acquisition and repositioning of a beachfront hotel asset.

This is the second tranche of the Arianna loan, a transaction already presented on Urbanitae. For this reason, there will not be a new webinar on this occasion, although you can rewatch the project’s original webinar, held on Wednesday, April 29, where the asset, sponsor, and investment thesis are explained in detail.

• 📅 Investment opening: Friday, May 15 at 12:00 p.m. (UTC+2)
• 🎙 Project webinar: you can rewatch the Arianna webinar held on Wednesday, April 29.

Continuation of the Arianna project

Arianna II allows investors to participate in the same project presented in Arianna I: the granting of a mezzanine loan to finance the acquisition and repositioning of the Hotel Arianna, located in Marina di Pietrasanta, on the southern edge of Forte dei Marmi, one of Italy’s most established luxury coastal destinations.

Mezzanine debt is a financing layer positioned between senior debt and equity: it ranks behind the main bank loan in repayment priority, but ahead of shareholders’ equity. Due to this subordinated position, it generally offers higher returns than senior debt.

The project consists of the full refurbishment of the hotel, which will feature 42 rooms distributed across five floors, a rooftop SPA with panoramic terrace, restaurant, bar, and renovated common areas. The project perimeter also includes two high-end residential villas: Villa Residencial and Villa Dependance, both with private gardens, swimming pools, and luxury finishes.

A beachfront asset

The asset is located just a few minutes’ walk from the center of Forte dei Marmi, opposite the Versiliana Park and with direct access to some of the coastline’s most exclusive bagni, such as Twiga, Augustus, and Principe Forte dei Marmi.

Versilia, on the Tuscan coast, combines natural surroundings, beaches, high-end services, and proximity to iconic destinations such as Forte dei Marmi and Viareggio. It is one of Italy’s most renowned luxury tourism markets and an area with strong demand from international buyers and guests.

This beachfront location gives the project a differentiated positioning within the premium hotel-residential segment.

The project sponsor

The transaction sponsor is Setha Group, a real estate investment and development firm with more than a decade of experience in the identification, acquisition, and development of brownfield land in the United Kingdom and Italy.

Setha has an extensive track record in the sector, with more than 20 projects led, a GDV – gross development value of completed projects – exceeding £1 billion, and more than 1,000 delivered units across London, southeast England, and key Italian cities.

The company acts as both developer and investor, allowing it to maintain direct control over design, execution, and costs. It also has active experience in the Versilia area, including a luxury villa refurbishment project currently under development at Via dell’Acqua 166, Forte dei Marmi, also in collaboration with Urbanitae.

Transaction structure

Total junior financing amounts to €8 million. Of this amount, €5 million will be financed by Urbanitae investors – €3 million corresponding to the first tranche and €2 million corresponding to Arianna II – and €3 million by external investors.

The main features of Arianna II are:

• Amount: up to €2,000,000
• Interest rate: 13.0% annual simple interest
• Total return: 26%
• Term: 24 months
• Possible extension: additional 12 months
• Minimum interest: equivalent to 9 months of interest
• Interest and principal payment: at maturity

The portion of the loan allocated to refurbishment works will be drawn through monthly construction certifications, subject to favorable reports from the Project Monitor.

Full early repayment will be permitted at any time, with a minimum return equivalent to 9 months of interest.

Financing and sponsor contribution

The sponsor is committing total capital of approximately €3.01 million, of which around €2.04 million had already been disbursed at the closing date of the financing.

The project also benefits from a senior loan from Solution Bank totaling €7.5 million, of which €5 million has already been granted and €2.5 million, corresponding to a CapEx facility – investment intended to finance works, equipment, and asset improvements – is in the final approval phase.

Loan guarantees

The loan includes a package of guarantees tailored to the mezzanine structure of the transaction:

• First-ranking pledge over 100% of the shares of the borrowing SPV, Dogui 2 S.r.l.
• First-ranking pledge over the SPV’s bank accounts
• Subordination of corporate and shareholder loans granted to the SPV
• Commitment by the sponsor to inject additional equity in the event of construction cost overruns

In addition, as in all debt projects, a Project Monitor will oversee construction certifications, construction progress, potential timeline or cost deviations, and approve monthly loan disbursements.

Exit strategy

Urbanitae investors are expected to exit through the refinancing of the loan in 2028, supported by two main drivers: the sale of the two residential villas and the stabilization of the hotel under a lease agreement with EGA Hospitality.

The villas will be marketed through Setha Group’s direct channels, supported by local brokers specialized in the ultra-prime segment of Forte dei Marmi and Marina di Pietrasanta.