Description
WECITY complies with the provisions of Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European providers of equity finance services for companies and Title V of Law 5/2015 on the promotion of business financing as amended by Law 18/2022 of 28 September on the creation and growth of companies. It is authorized by the CNMV as a Participatory Financing Service Provider, registered under number 9, with a favorable proposal from the Bank of Spain.
Investor, before making your investment, please read the basic information for the investor client, as well as the pre-contractual cooling-off period for inexperienced investors.
Skin in the game: “In compliance with Article 8.2 of Regulation (EU) 2020/1503 of the European Parliament and of the Council of October 7, 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 on the same terms as those of other investors without receiving preferential treatment or privileged access to information.”
The investment
- Purpose of the loan: To finance the acquisition costs, urbanization costs and construction costs (of only 1 of the 4 villas) of a development of 4 dwellings located in Establiments, Palma de Mallorca.
- Type: Fixed-rate loan.
- Collateral: 1st degree mortgage collateral.
- Term: 12 months (+6 months possible extension).
- Interest rate: 12% per annum.
- Interest payment: at maturity.
- Current appraisal (ECO): 2,309,892 €.
- Current LTV phase I: 32.46%.
- Current LTV total financing: 64.93%.
- LTV 1st disposition: 29.35%.
- Rating: A
- Contributions:
- Promoter: €620,000 (45.25%)
- Wecity loan phase I: 750,000 € 750,000
- Minimum investment: 500 €.
- Maximum investment: No investment limits.
The developer Kamara Real Estate SL is requesting financing through wecity for the development of a development of 4 luxury villas in Establiments, Palma de Mallorca. The funds will be used for the acquisition of the asset, the payment of the urbanization costs and the building costs of 1 of the 4 houses (villa 4).
The site has an area of 3,911m2 with a total built area of 2,166m2 depending on the project (from 414 to 677m2 built per unit). These are homes with all kinds of details and a high degree of energy efficiency. They also include an elevator, subway parking and large outdoor areas with a swimming pool. The building permit has already been requested and is expected to be obtained in the first quarter of 2025, at which time marketing will begin. The sale prices of each unit range from €2,700,000 to €4,000,000, with an approximate impact price of €6,500/m2.
The project will be financed through a mortgage loan in the amount of €750,000 at a fixed rate, which will be secured by a first mortgage guarantee. This loan will be the first phase of a total loan, which may amount to a maximum of €1,500,000 in two phases.
To date, the developer has contributed its own funds in the amount of €620,000 (45.25%), which have been used for the acquisition of the land, urbanization and demolition costs of the plot, technical costs, urban planning fees, etc. It is estimated that the repayment of the loan to the wecity investors will take place with the sale of Villa 4.
Through wecity you can participate in a fixed-rate loan operation with an annual interest rate of 12% for an estimated term of 12 months (6 months mandatory) with the possibility of extending for an additional 6 months at .
The payment of interest + the return of the invested capital will be made at maturity.
The project
Location and surroundings
Terra Calma, located between the Tramuntana mountains and the Mediterranean, offers a unique combination of rural Mallorcan life and proximity to the city of Palma. Surrounded by olive and almond trees and mountain scenery, this location combines natural charm with excellent connections to the city, the airport and various services. With accessible hiking trails, panoramic views and a tranquil setting, it is an ideal retreat for those seeking a balance between the urban and the rural. Its strategic location also guarantees a high potential for real estate appreciation due to growing demand and limited supply.
Collateral and appraisal
The loan will be secured by a1st degree mortgage on the asset called “Can Marido” in Establisments, Palma de Mallorca.
According to the appraisal report prepared by GESVALT, the current appraisal amounts to €2,309,892. The loan to be made to the developer in phase I is €750,000, which means a Loan to Value (LTV) over the current appraisal of 32.46%. In the event of activating the second phase of the loan, the loan would amount to €1,500,000, which represents a Loan to Value (LTV) over current appraisal of 64.93%.
The 1st disposition LTV is 29.35%.
Collateral agent
The constitution, conservation, management, administration and, if applicable, enforcement of the pledge on behalf of wecity’s investors shall be carried out by an entity external to wecity.
In this case, the designated Collateral Agent will be the one indicated in the Fundamental Data Sheet of the investment.
Rating
wecity, as a provider of equity financing services and in compliance with Delegated Regulation (EU) 2024/358 supplementing Regulation (EU) 2020/1503 of the European Parliament and of the Council, provides a description of the credit rating method
of the projects used to calculate the ratings. If the calculation is based on accounts that have not been audited, this shall be clearly stated in the description of the method.
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 get any return on your investment. It is not a savings product and it is recommended not to invest more than 10% of your net worth in equity financing projects. You may not be able to assign the investment instruments when you wish. Even if you are able to sell them, you may suffer 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 desist, at any time, from 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 four calendar days after that date. To exercise their revocation rights, Investors may send an e-mail to the following address: reclamaciones@wecity.io, filling in the “subject” field of such e-mail as follows: “REVOCATION – Opportunity Name – Investor’s first and last name”. In the event that you have made a monetary contribution in connection with the financing offer, such amount will be returned as soon as possible to the wallet that you, as an investor/user of the “WECITY” Platform, have open in the “LEMONWAY” Payment Institution.
Credit risk
Credit risk is defined as the loss that may occur in the event of default 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 noncompliance
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 underperformance or delayed performance
The risk that the return will be lower than expected or that the project will default on principal or interest payments.
Investment illiquidity risk
The risk that investors may 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.
