Izilend to Spend €200M Financing Real Estate Projects in Spain

1 February 2019 – Expansión

Izilend has arrived in Spain with the launch of a vehicle, which has funding of up to €200 million to finance real estate projects in the country.

Since September, the alternative financing firm has already undertaken ten operations worth €20 million and it plans to finance operations amounting to €50 million during the course of this year.

Izilend, which has a presence in Portugal with a real estate crowdfunding platform, forms part of the holding company FS Capital Partners, which also includes a servicer, Fintech, Finsolutia and a financial advisory company (EAFI).

Izilend is thereby joining other alternative financing platforms specialising in the real estate sector that have made their debuts in Spain in recent months, such as Íbero Capital Management, from the US investment fund Oak Hill Advisors, and the firm promoted by Azora and Oquendo.

Focus

In the case of Izilend, the firm focuses on the financing of projects amounting to between €1 million and €10 million. To date, it has financed investors, property developers, cooperatives and Socimis for projects in Madrid, Málaga, Sevilla and the Balearic Islands. The financing fund intends to continue expanding the focus and to finance different types of assets ranging from housing, offices, retail and land in the main cities of Spain and Portugal.

Francisco Jonet, one of the people responsible for Izilend’s business in Spain, explains that the company offers a solution to property developers and real estate investors to develop projects that the traditional banks are not interested in either due to the type of product, the situation of the operation or the response times.

“To date, we have financed firms ranging from small property developers to Socimis, and products ranging from land to residential blocks, located in different provinces around the country”, said Jonet.

Gonzalo Gutiérrez de Mesa, the other person in charge of the fund, forecasts that the demand for alternative financing will double over the next five years and will thereby approach the market rates in more mature countries in Europe, where this type of financing accounts for between 30% and 40% of the total market. “We are creating a new niche in which we believe there is great potential”, adds Gutiérrez.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Housers Will Build First Building In Spain Using Collective Financing

26 August 2016 – El Economista

The real estate market has evolved so much in recent years that now anyone can become a residential developer without triggering the start of a new real estate bubble, as happened before the crisis, when many entrepreneurs decided to enter this business without any prior knowledge of it.

This has been made possible thanks to an initiative developed by Housers, which has started to raise funds, through crowdfunding, for the construction of the first residential building in Madrid to be financed by this shared investment model, and the subsequent sale of its homes. This is also the first real estate project of its kind to be undertaken in Spain.

The project involves the purchase of land, the demolition of a small existing residential property on the site, as well as the complete construction of a residential building, which will comprise five homes and three duplex lofts.

According to the company, the turn-key construction projectwill begin once the financing has been raised, and will take approximately 24 months. The homes will go up for sale when the building work commences.

The cost of the real estate project is estimated to amount to €1.041 million, of which €255,228 corresponds to the gross acquisition cost of the existing building, €539,000 relates to the construction of the new building, and the remainder corresponds to processing costs, taxes and a cushion for unforeseen expenses.

The project aims to raise €748,000 (71.8% of the project) through crowdfunding, with each investor able to participate from as little as €50; and €293,000 through a mortgage to improve returns for investors.

The term for the sale of all of the homes is 24 months. During this period, the gross yield is expected to amount to 44.06% and the net yield will reach 27.94%; those profits will be distributed in the form of dividends to all of the participating investors. Housers estimates that the sale of all of the homes in the building will generate €1,242,000. The residential building will be located in Madrid, in the district of Tetuán, an area that has very high potential given the scarce stock of new homes there.

Housers celebrated its first birthday a month ago and in that time, it has created a community of more than 8,000 investors and has received contributions amounting to more than €8.5 million to finance the purchase of 38 properties in Madrid, Barcelona, Valencia and Marbella.

Original story: El Economista (by Alba Brualla)

Translation: Carmel Drake

‘Housers’: Spain’s First RE Crowdfunding Platform Is Launched

20 August 2015 – Cinco Días

Crowdfunding is breaking into the Spanish real estate market; and small investors seem to be thriving in a space that was, until now, controlled by large fortunes and stratospheric projects. It is now possible to make an investment with just €500 in your pocket, through Housers, which describes itself as “the first online real estate crowdfunding platform in Spain”.

With the aim of creating a property investment fund opene to everyone, and based on the success that such platforms have been having in countries such as the USA and UK, Antonio Brusola and Álvaro Luna decided to launch a project that already has 800 users and is only one month old.

The platform, which has been adapted to reflect the new Crowdfunding Law that was ratified in April 2015, is aimed primarily at the purchase of homes. With a minimum investment of €500 in four different projects or €2,000 in just one, individuals can buy a stake in a home and receive monthly rental income, plus a capital gain when the property is sold. Similarly, the funds may be used to finance short-term real estate projects, such as construction and the renovation of buildings, in order to achieve “low risk investment products that generate high returns from rental and sale”, explains the company.

Housers offers homes and retail premises on its website for the moment, but the company is also looking to acquire industrial warehouses, depending on “how each asset performs in the market”. “Homes have the most upside potential, but retail premises have lower maintenance costs. They are two quite different products”, says Brusola, one of the co-founders. That is why the company expects to generate gross returns of more than 7% p.a. and that its properties will appreciate in value by 35% by the time they are sold.

“We try to purchase between 10% and 20% below the market price, so that we can sell them for 35% more with just a small increase”, says Brusola. He also confirms that the security of the investment is “quite high because it is a physical product and the loss is very limited”. “It is always possible that prices will not increase – for example, there could be a 10% decrease in house prices over the next few years, however, the rental income from the property will offset that potential decrease”, he says.

With this initiative, Housers expects to purchase more than 1,500 homes and obtain €300 million from around 10,000 investors in three years. In addition, the company is considering a capital increase in October, a month after the final launch of the platform, in September. And even though the idea was first floated in December last year and the web went live a month ago, the new Law resulted in delays to the project, which had to be adapted to the reflect the new processes required.

The new legislation establishes investment limits of €3,000 per project and a maximum investment of €10,000 in a 12 month period for non-accredited investors. Moreover, it forces platforms to collaborate with payment entities, or with the Bank of Spain, to ensure that segregated accounts are used and investors do not deposit their money directly in the platforms. For this reason, Housers has joined forces with LemonWay, a European payment entity that operates internationally, which affords it access to overseas investors, especially in the USA, UK and Germany, countries in which this property crowdfunding formula is more developed.

Original story: Cinco Días (by Asun Infante & Alfonso Simón Ruiz)

Translation: Carmel Drake