Paraíso de Azahar II: debt at 11.25% per year for 10 homes in Estepona

Next Thursday, 17 September at 16:00 (UTC+2), we will open the Paraíso de Azahar II project for investment. This is the second tranche of a loan intended to finance a new-build residential development in the historic centre of Estepona, Málaga.

The transaction consists of partially financing the acquisition and construction costs of 10 multi-family homes in a unique location: Estepona’s old town, two minutes on foot from Plaza del Reloj and five minutes from the seafront promenade.

Tranche B will amount to €1,560,000, with a term of 22 months, a fixed interest rate of 11.25% simple annual interest and a total return of 20.63%, with a minimum return equivalent to 18 months of interest.

• Opening for investment: Thursday, 17 September at 16:00 (UTC+2)

• Project webinar: you can rewatch the Paraíso de Azahar webinar.

Ten Homes in Estepona’s Historic Centre

Paraíso de Azahar consists of the acquisition of five adjoining registered units and the development of 10 multi-family homes, distributed across ground floor plus three upper floors.

The development will include homes with 1 to 3 bedrooms. All of them will include a parking space and storage room, and five will have a swimming pool on the terrace.

The project design preserves the classic-style façade of Estepona’s old town, while incorporating latest-generation qualities and finishes. The aim is to develop a differentiated product in a location where the supply of new-build homes is very limited.

Currently, 5 of the 10 homes have already been reserved, representing a commercialisation level of 50%.

A Unique Development in the Historic Centre

The development is located in Estepona’s historic centre, one of the city’s most attractive residential and tourist areas.

The asset is two minutes on foot from Plaza del Reloj and five minutes from the seafront promenade. It is also very close to the new social centre under development in the city.

Estepona has consolidated its position as one of the main destinations on the Costa del Sol. Its old town, marina, more than 20 kilometres of coastline, gastronomic offering and quality of life reinforce the city’s appeal for both primary and second homes.

In this context, Paraíso de Azahar stands out as the only new-build development currently being commercialised in Estepona’s historic centre.

The Manager: ARG Promociones

The project manager is ARG Promociones, a developer-contractor specialised in exclusive residential projects on the Costa del Sol and, in particular, in Estepona.

The company has been developing construction and refurbishment projects since 1982 and currently has a team of more than 50 professionals.

This is the second project that Urbanitae has financed together with ARG Promociones, after the Privilege project, financed in May 2025.

For the architectural design, the developer is working with Complot Arquitectos, a studio with an extensive track record and experience in luxury residential projects.

Permit Granted and 50% Reserved

The project has a valid building permit over the registered property resulting from the grouping of the acquired units.

Tranche A of the loan was formalised in July 2025 and was used to partially finance the acquisition of the land. Tranche B, corresponding to this new opening, will be used to finance part of the construction costs and general project costs.

Commercialisation of the asset began in July 2025 and there are currently 5 homes reserved out of a total of 10. This level of commercialisation helps mitigate the project’s commercial risk and provides greater visibility over product demand.

The commercial analysis of the area indicates that the most in-demand housing model in Estepona is precisely the one offered by the development: high-end new-build 2- and 3-bedroom units.

11.25% Annual Interest and a Total Return of 20.63%

The transaction is structured as debt, through a fixed-rate loan granted to the project SPV. The total loan amounts to €2,600,000 and is structured in two tranches:

• Tranche A: €1,040,000, formalised in July 2025 and intended to finance part of the land acquisition costs.

• Tranche B: €1,560,000, corresponding to this opening and intended to finance part of the development’s construction costs.

The main characteristics of Tranche B are:

• Amount: €1,560,000

• Interest rate: 11.25% simple annual interest

• Total return: 20.63%

• Term: 22 months

• Minimum return: equivalent to 18 months of interest

• Payment of principal and interest: at maturity

Full early repayment will be allowed at any time, subject to the minimum interest return established for Tranche B.

Loan Guarantees

The loan has a guarantee package made up of:

• First-ranking mortgage over the property being financed, with mortgage liability of 150% of the loan principal.

• First-ranking pledge over the shares of the project development SPV.

• First-ranking pledge over the project bank accounts in the borrowing SPV.

• Pledge over collection rights from the revenues of The Oak and Villa Infinity projects, to guarantee the developer’s additional capital commitment.

In addition, as in all debt projects, a Project Monitor is included. The Project Monitor will review work certifications, construction progress, possible deviations in timing and cost, and approve the loan drawdowns.

Exit Strategy

The expected exit for Urbanitae investors will take place through the sale of the homes.

The total target sales value amounts to €8.6 million. With 5 of the 10 homes already reserved, the project starts from an advanced commercialisation level.

The developer also has an internal sales team specialised in the area. The commercial due diligence carried out by an external agent supports both the proposed prices and the expected sales timeline.