In equity, returns are not a coupon: they are the outcome of a real estate project. That makes this type of investment especially interesting for investors, because it allows them to capture value when the plan performs well. But it also requires understanding something fundamental: the final return depends on execution – and therefore on the developer, the market, and the control of costs and timelines.
That is why, when a project is liquidated with a particularly positive result, it is worth analysing it carefully. Not to treat it as the norm, but to identify which drivers explain the outcome and what lessons it offers for assessing future projects. In this sense, the exit of Allonbay Aura is a useful case study.
What the Project Was and What the Result Has Been
Allonbay Aura was developed in Villajoyosa, Alicante, and consisted of a new-build beachfront development comprising 25 homes with parking spaces and storage rooms, a communal swimming pool and shared areas. The project also included BREEAM environmental certification.
The investment opened on November 21, 2023, and the final liquidation took place on June 4, 2026. The final gross return was 61% CoC, while the IRR reached 21.5%, well above the initially estimated scenario of 32.7% and 13.9%.
A Strong Exit Does Not Mean a “Frictionless” Path
One of the most useful nuances for understanding equity is that the actual timeline is rarely perfect. Even in very solid projects, final adjustments, technical requirements and administrative procedures can extend the final stretch.
In Allonbay Aura, the construction period extended to 22 months compared with the initially expected 18 months, partly due to adjustments and requirements associated with BREEAM certification. The period between completion of works and liquidation also extended to 8 months instead of 4, due to the granting of the First Occupancy Licence (LPO) and the signing of deeds.
This point matters because it explains why, in equity, IRR coexists with timing risk. In this case, what is relevant is that other drivers – revenues, costs and taxation – more than offset that delay.
Where Returns Come From When the Drivers Work in Your Favour
The closing report allows us to trace the result.
The first driver was commercial. At the time Urbanitae investors entered the project, 56% of the homes had already been reserved. As construction progressed, the development gained visibility and the market appreciated, allowing the remaining units to be sold at prices above those initially expected. In figures, revenues increased from an estimated €17.16 million to an actual €18.50 million, while the average price rose from €6,345/sqm to €6,839/sqm.
The second driver was cost control. Construction costs closed slightly below budget, a decisive factor for protecting margins in equity projects.
The third driver was less visible, but very tangible: tax efficiency. The manager analysed and succeeded in applying the reduced 15% corporate income tax rate, reducing the tax burden in the final liquidation and transferring that saving to the return. The report also states that the project generated an additional €1 million in pre-tax profit, thanks, among other factors, to stronger commercial performance.
Equity and the Cycle: Why 2021–2022 Was a Stress Test
Discussing the strengths of equity also requires remembering its nature: returns are not contractually agreed; they depend on the real margin of the project. That is why, when the environment becomes more difficult – costs, interest rates, financing and demand – equity feels the impact.
The market experienced a “stress test” in 2021 and 2022: many transactions outside Urbanitae suffered severe deviations, and some ended in losses. Urbanitae also went through that environment, and some projects had to navigate more demanding scenarios than initially expected. But there is an important nuance: to date, we have not closed any equity projects with losses for investors.
The Key Variable: A Good Developer
If there is one cross-cutting lesson in equity, it is this: the developer matters. Their importance lies in commercial capacity and early sales traction, cost discipline, and the ability to manage the final phase – permits, certifications and deed signings – where projects can often become delayed for months. In Allonbay Aura, the report expressly acknowledges the efforts of the management team to optimise resources and achieve the best possible outcome.
And when the environment becomes more challenging, another less visible element comes into play: monitoring throughout the life of the project. Asset Management does not “create” success on its own, but it can be decisive in difficult situations: identifying deviations in time, demanding information, testing alternatives and preventing an operational issue from turning into a loss for investors.
Allonbay Aura is not a promise. It is a completed exit that illustrates how equity behaves when the right product, a responsive market and, above all, strong execution come together. And, as always, investing involves risk: analysing completed projects with figures and context is one of the best ways to invest with judgement.
