Description

WECITY complies with Law 5/2015 and with Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European providers of crowdfunding services for companies. It is authorized by the CNMV as a Participatory Financing Platform registered under number 30, with a favorable proposal from the Bank of Spain.

TransForEstate SL, requests financing from wecity for this investment opportunity. Investor, before making your investment please read the basic information for the investor client.

Skin in the game: “In compliance with Article 8.2 of Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European providers of equity financing, we hereby inform you that partners, managers and employees of wecity may invest in this opportunity. These investments will be made under the same conditions as those of other investors without receiving preferential treatment or privileged access to information.”

The investment

The investment opportunity consists of financing the construction costs (currently 12.5% completed) of a development of 37 lofts and 4 commercial premises at 3 Aguarón Street, Valdemarín, Madrid. The plot has a surface area of 2,500 m² on which a building of 4,382 m² is planned. Currently, the sales level of the lofts is 49% (18 of 37), of which there are 17 sales (private sales contracts) and 1 reservation. As for the commercial premises, there are 2 reservations, representing 50% of sales (2 out of 4). The amounts paid on account by the buyers exceed €650,000.

The project will be financed through a mortgage loan of €3,000,000 at a fixed rate with a 1st degree mortgage guarantee corresponding to PHASE I of a total loan, which may reach a maximum of €7,000,000 in PHASE III. Due to current regulations, a maximum of €5,000,000 will be financed during the first 12 months after PHASE I is financed.

The developer (TransforEstate) has contributed its own funds in the amount of €5,162,525 (including VAT) (63%), which, together with the amounts paid on account by the buyers and the €3,000,000 requested from the wecity investors (PHASE I), make a total of €8,162,525 required for the start of construction. The developer will be able to activate PHASES II and III until the funds necessary for the execution of the project are completed.

The exit of investors from wecity occurs with the delivery of the lofts and premises to the buyers, once the Activity License is obtained, or with the entry of the bank financing, once the pre-sales required by the bank are obtained.

Through wecity you can participate in a fixed rate loan operation with an annual interest rate of 11% for an estimated term of 15 months (6 months of obligatory compliance) with the possibility of an extension of 6 additional months. The total estimated return is 13.75% for 15 months or 19.25% if the final term is 6 months with the extension. The interest payment + the return of the invested capital will be made at maturity.

With a minimum investment of 500 €, you can participate in this opportunity with an excellent profitability and with the maximum guarantees.

ECO Appraisal and Mortgage Guarantee

The loan will be secured by a 1st degree mortgage on the plot of land and the building, located at Calle Aguarón, 3, Valdemarín, Madrid.

The current appraisal for mortgage guarantee purposes (Order ECO 805/2003) amounts to 5,318,401 €. This represents a Loan to Value (LTV) over the current appraisal of 56.41%. The independent appraisal company in charge of identifying the value is GESVALT, whose corporate name is Gesvalt Sociedad de Tasación SA, and which is registered as an approved appraisal company by the Bank of Spain under number 4455.

The appraisal on the assumption of a completed building amounts to €16,353,636. This represents a Loan to Value (LTV) on HET appraisal of 42.91%.

The Loan to Value (LTV) on first disposal is 23.93 %.

The project

The project consists of financing the construction costs of a development of 37 lofts and 4 commercial premises located at calle Aguarón, 3, Madrid.

Location

The project is located in Valdemarín, one of the most exclusive and sought-after real estate areas in Madrid. The area has a privileged location that makes it perfect for those looking to live in a quiet environment away from the hustle and bustle of the city. All this without giving up the proximity and amenities that Madrid has to offer.

Located to the west of Madrid, Valdemarín is surrounded by the forest parks of Casa de Campo and Monte del Pardo, which makes it one of the greenest and coolest areas of the capital.
The area also stands out for its wide range of services, where we can find renowned educational centers, such as Mater Salvatoris or The English Montessori schools, and outstanding hospitals, such as Vithas Madrid Pardo or Sanitas La Zarzuela. Not to mention the wide gastronomic and leisure offer.

Collateral Agent

The constitution, preservation, management, administration and, if applicable, execution, of the real estate mortgage rights on behalf of wecity investors will be in charge of an entity external to wecity.

In this case the designated Collateral Agent is BONDHOLDERS.

Bondholders, is a professional company specialized mainly in providing independent commission agent services and independent agent services over different asset classes and under numerous international jurisdictions.

In recent years Bondholders has been mandated as agent and arranger in more than 400 transactions representing a total of nearly 200 billion euros in debt.

Its main clients include, among others, financial institutions, institutional clients, asset managers, sovereign government agencies.

Currently one of the leaders in Europe in providing independent fiduciary services.

Monitoring

The promoter must justify the use of the funds in each of the applications. The use of the funds by the promoter will be monitored by a company external to wecity. 

Compliance with Regulation (EU) 2020/1503 🇪🇺

Risk Warning

Investing in this crowdfunding project involves risks, including the risk of partial or total loss of the money invested. Your investment is not covered by deposit guarantee schemes established in accordance with Directive 2014/49/EU of the European Parliament and of the Council (). Your investment is not covered by investor compensation schemes established in accordance with Directive 97/9/EC of the European Parliament and of the Council (*). You may not receive any return on your investment. It is not a savings product and it is recommended that you do not invest more than 10% of your net assets in equity financing projects. You may not be able to dispose of the investment instruments at any time. Even if you are able to sell them, you may incur losses.

Pre-contractual cooling-off period for inexperienced investors

Inexperienced investors have a cooling-off period of four (4) days during which they may, at any time, revoke or withdraw, at any time, their investment offer or expression of interest in the equity financing offer without having to justify their decision and without incurring a penalty. The cooling-off period begins at the time the potential non-experienced investor makes an investment offer or expresses interest and expires after four calendar days from that date. To exercise their revocation rights, Investors may send an email to the following address: reclamaciones@wecity.com, filling in the “subject” field of such email as follows: “REVOCATION – Name of the Opportunity – Name and surname of the Investor”. In the event that you have made a monetary contribution linked to the financing offer, said amount will be returned as soon as possible to the wallet that, as an investor/user of the “WECITY” Platform, you have open with the “LEMONWAY” Payment Institution.

Credit risk

Credit risk is defined as the loss that may occur in the event of non-payment by the counterparty in a financial transaction. In this specific case, the risk that the Promoter does not pay the principal and/or interest on the Loan.

Sector risk Risks inherent to the specific sector.

Such risks may be caused, for example, by a change in macroeconomic circumstances, a reduction in demand in the sector in which the equity financing project operates and dependencies in other sectors. In any case the investor should be aware that adverse economic conditions or cyclical changes may lead to a weakening of the Promoter’s ability to meet its financial commitments in connection with the loan.

Risk of default

The risk that the project promoter may be subject to bankruptcy proceedings and other events affecting the project or the project promoter that result in the loss of the investment for the investors. Such risks may be caused by a variety of factors, including, without limitation: (serious) change in macroeconomic circumstances, mismanagement, lack of experience, fraud, financing not matching the corporate purpose, failure to launch the product or lack of liquidity. In the event of insolvency of the Promoter, the holders of the credits will be considered as credits with special privilege, as they are secured by a mortgage guarantee, in accordance with the cataloguing and order of priority of credits established by Royal Legislative Decree 1/2020, of May 5, which approves the revised text of the Insolvency Law (hereinafter, the “Insolvency Law”), except for those amounts that pursuant to Article 272 of the Insolvency Law must be classified either as ordinary credit or as subordinated credit, as appropriate.

Risk of lower or delayed yield

The risk that the return is lower than expected or that the project defaults on the payment of principal or interest.

Investment illiquidity risk

The risk that investors will not be able to sell their investment. There is no active trading market for the loan, so the investor may not be able to find a third party to whom to assign the loan.

Other risks

Risks that are, among others, beyond the control of the project developer, such as political or regulatory risks.