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

The hotel operator Esférica de Inversiones Globales, S.L. is seeking financing through Wecity for the acquisition of the Hotel Inglaterra, located at 6 Cettie Meriem Street in Granada.

The Hotel Inglaterra is a historic building that stands out for its privileged location, just 20 meters from the Cathedral of Granada, on the corner of Cettie Meriem and Joaquín Costa streets. It is a 3-star hotel with 36 rooms: 3 singles, 27 doubles and 6 triples, some of them with excellent views of the Alhambra, in more than 2,200 m^{2 of} built space.

The asset currently has an activity license and is fully operational. The project developer is the current operator of the hotel, and has an option to purchase the asset.

The project will be financed through a mortgage loan in the amount of €3,990,000 at a fixed rate, which will have a first-degree mortgage guarantee.

In this case, the contribution of the developer is not monetary but offers an additional guarantee consisting of a second mortgage on the Hotel Infanta Mercedes, located at 21 Huesca Street in Madrid, which he owns through another of his companies. It is a 2-star accommodation with 60 rooms that currently has a current appraisal value (Gloval, 02/19/2025) of €6,882,537. The asset has a first-degree mortgage liability of €1,464,444, corresponding to a loan for the acquisition of the asset that matures in 2035 and is up to date with payments.

The investors’ exit from wecity will take place with the sale of the asset.

Through wecity you can participate in a fixed-rate loan operation with an annual interest rate of 12% in an estimated term of 3 months (3 mandatory) with the possibility of an extension of 3 additional months.

The payment of interest plus the return of the invested capital will be made at maturity.

The project

Location and surroundings

The Hotel Inglaterra in Granada is located in the heart of the historic center, on Cetti Meriem Street, a few meters from the Cathedral, Plaza Bib-Rambla and Gran Vía de Colón. This area is highly sought after in the real estate market due to its tourist value, the services it offers and its profitability in short-stay rentals. Its proximity to the Alhambra, the Albaicín and the Carrera del Darro makes it an exclusive area, with housing in historic buildings and great commercial activity. In addition, it has excellent connectivity and pedestrian areas that enhance its residential and investment appeal.

Collateral and appraisal

The loan will be secured by a first degree mortgage on the Hotel Inglaterra located at 6 Cetti Meriem Street, Centro – Granada.

According to the report prepared by SOCIEDAD DE TASACIÓN, the current appraisal amounts to €2,935,024. The loan to be made to the developer is €3,990,000, which represents a Loan to Value (LTV) on the current valuation of 135.94%.

Additionally, in this project, the developer offers as an additional guarantee a second ^{mortgage on} the Hotel Infanta Mercedes, located at 21 Huesca Street, Madrid. According to the appraisal report carried out by GLOVAL, the current appraisal amounts to €6,882,537. This asset has a mortgage burden worth €1,464,444, so the debt-free value of the asset is €5,418,093.

Therefore, the developer offers as total guarantees, free of debt, assets valued at €8,353,117, which are obtained from the sum of the first-degree mortgage guarantee and the debt-free value of the second-degree guarantee. Taking this value into account, the current Loan to Value on all the project’s assets is 47.76%.

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.