Invest in property in Tuscany: Luce

Next Thursday, 29 October at 16:00 (UTC+1), we will open the Luce project for investment, a new debt opportunity to participate in the acquisition and complete refurbishment of two luxury villas in Marina di Pietrasanta, near Forte dei Marmi, on the Tuscan coast.

The transaction also includes a partial upgrade of an adjoining hotel within the same complex. Urbanitae investors will provide a loan of €3 million, with a term of 18 months and 13% annual simple interest, equivalent to a total return of 19.5% over the standard term.

Investment opening: Thursday, 29 October at 16:00 (UTC+1)
Urbanitae loan amount: €3,000,000
Term: 18 months + possible 12-month extension
Interest: 13% per annum, simple interest
Total return: 19.5%

Two beachfront villas

The centrepiece of the project is two luxury villas that will undergo comprehensive refurbishment, incorporating private gardens, swimming pools and high-end finishes.

The complex is located in Marina di Pietrasanta, directly on the seafront at the southern edge of Forte dei Marmi, one of Italy’s most established luxury residential and holiday destinations.

The location combines proximity to the centre of Forte dei Marmi with access to some of Versilia’s best-known beach clubs, in a low-density setting opposite the Versiliana Park.

The development also includes a partial refurbishment of the adjoining 42-room hotel, with improvements to communal areas, the restaurant, bar and spa, including a panoramic terrace.

A project with equity already invested

The developer has more than 30 years of experience in construction, refurbishment and property development and has managed transactions worth approximately €50 million.

For this transaction, it has committed around €3.01 million of its own capital, of which approximately €2.04 million had already been contributed by financial close.

The project also benefits from senior bank financing of up to €7.5 million.

A valid SCIA is in place for the main construction works. This is an Italian administrative procedure that allows certain works to be carried out following prior notification. The planned extension of the hotel section is subject to an additional permit, which is expected to be obtained during the project’s development.

A junior loan at 13%

Total junior financing amounts to €8 million. Of this, €5 million comes from external co-investors and €3 million will be provided by Urbanitae investors.

The Urbanitae loan will finance part of the acquisition and refurbishment works.

Its main terms are:

Amount: €3,000,000.
Interest: 13% per annum, simple interest.
Term: 18 months.
Possible extension: an additional 12 months.
Total return over the standard term: 19.5%.
Minimum return: six months of interest, equivalent to 6.5%.
Principal and interest: payable at maturity.

In this transaction, Urbanitae’s loan is junior, because senior bank financing has priority for repayment. This entails a higher level of risk than the senior loans secured by first-ranking mortgages commonly offered on Urbanitae, and also helps explain the 13% annual interest rate.

Nevertheless, the transaction includes several features designed to mitigate that risk: equity already contributed by the developer, existing assets with value in their own right, a first-ranking pledge over the property-owning company, an undertaking to grant a second-ranking mortgage and an irrevocable sale mandate. Repayment is also planned through the sale of the villas and subsequent refinancing of the financing structure once the project has progressed.

In other words, Urbanitae’s position is subordinated to the bank, but this is neither unsecured financing nor a project starting from scratch. This approach is consistent with the structure of mezzanine or junior financing, where greater subordination is offset by higher potential returns and additional protection mechanisms.

Loan security

The loan includes a security package comprising:

A first-ranking pledge over the shares of the company that owns the property.
Subordination of shareholder loans granted to the borrowing company.
An undertaking to grant a second-ranking mortgage.
An irrevocable sale mandate and power of attorney, allowing the sale of the property to be carried out in the circumstances provided for in the financing agreement.

In addition, drawdowns intended for construction works will be made against monthly progress certificates reviewed by an independent Project Monitor, who will also oversee construction progress and any deviations in timing or costs.

How will the loan be repaid?

The exit strategy combines two sources of repayment.

Firstly, the two villas are expected to be sold during 2028, allowing an initial partial repayment of the loan. Secondly, the opening and stabilisation of the hotel will support refinancing of the junior debt, which is expected to complete repayment to Urbanitae investors.

This combination means repayment does not depend exclusively on a single sale or source of liquidity.

Why invest in Luce?

We believe Luce offers several distinctive features: a unique beachfront property in one of Italy’s most established luxury locations, a substantial equity contribution from the developer and a financing structure incorporating several security arrangements and control mechanisms.

The main highlights include:

13% annual simple interest.
Total return of 19.5% over the standard term.
Minimum return equivalent to six months of interest.
Two luxury villas in Marina di Pietrasanta, near Forte dei Marmi.
Approximately €3 million of capital committed by the developer.
First-ranking pledge over the property-owning company.
Undertaking to grant a second-ranking mortgage.
Irrevocable sale mandate and power of attorney.
Construction progress and drawdowns supervised by a Project Monitor.
Technical, legal and commercial due diligence carried out by external advisers.

Estimated timetable

The standard loan term is 18 months, with a possible additional 12-month extension.

The main planned milestones are:

Fourth quarter of 2026: loan disbursement and commencement of construction works.
Second quarter of 2028: expected sale of the two villas and first partial repayment.
2028: hotel opening, refinancing of the junior debt and full repayment of the loan.

As with any property development, these timeframes may change depending on construction progress, sales and administrative procedures.

Taxation of interest in Italy

As the loan is granted to an Italian company, interest is generally subject to 26% withholding tax at source.

For investors who are tax residents in Spain, the double taxation treaty between Spain and Italy allows this withholding rate to be reduced to 12%, provided tax residence is properly evidenced through the relevant certificate.

You can find full details of this procedure, as well as the investment documentation, security arrangements and risks, on the project page.