PROJECT DESCRIPTION

The manager of this opportunity is GRUPO ABAUCO, a real estate development company created in 2019 whose management team has more than 15 years of experience in the sector, in which they have participated in the development of projects at a national and international level for a total investment volume exceeding 500 million euros. The company focuses its activity on the residential and hotel sectors. Since its foundation, GRUPO ABAUCO has executed the promotion of hotel and residential projects in Germany and Spain.

The Alcalá 552 Project will be the ninth project financed together with GRUPO ABAUCO through URBANITAE after the López de Hoyos, Santa Hortensia 58, Alcotán Zabala, Narváez and Miguel Yuste projects, all of them located in Madrid, the García Lorca project, located in the city of Seville, the Elviria project, located in Marbella and the Embajadores 199 project. The nine projects have been well received commercially.

The project manager will acquire the asset with own funds and part of the loan from Urbanitae investors and Co-Investors, previously disbursing to the public elevation of the asset acquisition, own funds amounting to € 2.85m. Likewise, the manager will settle all the general costs of the project until obtaining the license (project, license, fees and technical fees) via (i) own funds and (ii) 20% of the income derived from the lease contract. 

The project consists of granting a bridge loan in two tranches to finance the first two payments for the purchase of a building from an IBEX-35 listed company, and its rental under a lease contract, with the previous owner remaining as tenant of the asset ("sale and lease back"). The lease contract has a minimum mandatory period of 24 months, with the tenant having the option to extend the lease contract in a 12-month extension (in month 24 and up to month 36).  

The Phase 1 of the Project consists in the purchase of the asset from an IBEX-35 listed company, to formalize a lease contract in unity of act with the sale, with the previous owner remaining as tenant of the asset ("sale and lease back"). The lease contract has a minimum mandatory period of 24 months, with the tenant having the option to extend the lease contract in a 12-month extension (from month 24 to month 36). During this first phase, quarterly interest settlements will be made corresponding to 80% of the rent received from the lease contract.

The manager has signed the private purchase contract in which he has deposited a deposit, in the month of October. The contract establishes 3 payments for the acquisition and the Bridge Loan is granted to partially undertake the first two payments. Tranche A for the first payment in December 2025 and Tranche B for the second payment in December 2026. The building permit will be requested once the first payment is completed and it is expected to be obtained in 12 – 14 months. The marketing process will start in the first semester of the year 2027, led by the same manager and the client profile will be, for the most part, a national buyer for a first home. 

Urbanitae investors will enter the project through the granting of a bridge loan in two tranches to finance part of the first two payments of the purchase and costs derived from them. The Tranche A of the Loan will have a fixed annual rate of 13.0%. The principal of the loan is due at maturity, while part of the interest will be amortized quarterly as long as the lease contract remains in force.

The Tranche A of the bridge loan from Urbanitae investors will finance: (i) part of the first payment of the purchase price and (ii) the rest of the costs derived from this first payment of the acquisition and financing. The granting of the developer loan, and the entry of an Equity investor for the repayment of the loan from Urbanitae investors, will occur once the following milestones are achieved: (i) expiration of the lease contract, (ii) obtaining the building permit and (iii) compliance with the level of pre-sales required by the bank, for the granting of the developer loan. 

The exit of Urbanitae investors will be carried out through the granting of the developer loan by the bank and the entry of an investor group in the capital of the developer company. For the refinancing of the loan, 3 milestones must be met: (i) expiration of the lease contract, (ii) obtaining the building permit and (iii) compliance with the level of pre-sales required by the bank, for the granting of the developer loan.

STRUCTURE

This operation will be structured via debt, where Urbanitae Investors will grant a fixed rate loan to the company ABAUCO INVESTMENT 1, S.L.

The total amount of the bridge loan amounts to an amount of 9,836,000 €, of which Urbanitae investors will contribute up to a maximum of 9,588,000 €. The total loan will be structured in two tranches, whose main characteristics are the following (more information in the document "Fundamental Data of the Investment"):

• Total loan amount: up to 9,836,000 €, committed in two tranches:

I. A first tranche or Tranche A, for an amount of up to 5,248,000 €, of which 5,000,000 € will be raised by Urbanitae investors and the remaining amount by Co-Investors. 

II. A second tranche or Tranche B, for an amount of up to 4,588,000 €, raised by Urbanitae investors.

• Fixed annual simple interest rate of 13.0% for Tranche A

• Loan term: 24 months with an option to extend 12 months for Tranche A.

• The principal of the loan will be paid at maturity while part of the interest will be amortized quarterly (interest will begin to accrue from the moment of formalization of the loan contract).

Total early repayment will be allowed at any time, subject to a minimum guaranteed return equivalent to 24 months of interest. An extension of an additional 12 months is allowed at month 24.

Regarding the guarantees for the return of said loan, the following is established in the debt contract: 

• First rank pledge on the shares of the SPV owning the asset.

• Maintenance of Guarantees during the life of the loan and impossibility of granting the same or better guarantees in favor of other creditors.

• First rank control pledge without fund intervention on the Borrower's bank accounts

• Pledge of 80% of the income received from the lease contract signed with the tenant

• Subordination of corporate loans to the bridge loan

• Corporate guarantee from ABAUCO PE, S.L., for the contribution of the necessary equity from tranche B of the loan.

• Convertibility of the loan amount into shares of ABAUCO INVESTMENT 1, S.L., in case of non-payment and/or breach of any clauses of the financing contract. 

WHY INVEST?

There are several reasons to invest in this project:

•    The underlying asset of the debt is an asset in Madrid.

•    The manager has over 15 years of experience developing these types of promotions nationally and internationally, and particularly in Madrid, Seville or Malaga. In total, Abauco has developed promotions with an investment volume exceeding 500 million euros.

• The return that the investor will get will be 13.0% annually, with a minimum return equivalent to 24 months of interest and partial interest amortization quarterly.

MARKET

A market study has been carried out to determine if the selling prices proposed by the manager are reasonable.

There is information available about the market within the "Sales Witnesses" documentation, where you will find a list of homes for sale in the area.

WHEN WILL I RECOVER THE INVESTED MONEY?

The estimated term of this project is 24 months with a possible extension of 12 months in month 24.

• Q4 2025, granting of Tranche A of the loan from Urbanitae investors and Co-Investors to the developer, first payment for the purchase of the asset and start of the lease contract with the previous owner.

• Q1 2026, application for a building permit for Phase 2 of the project.

• H1 2027, start of marketing and obtaining the building permit and the minimum level of pre-sales required by the bank for the granting of the developer loan.

• Q4 2027, end of the lease contract with the previous owner, entry of the investor group into the capital of the developer company and granting of the developer loan by the bank, refinancing the loan from Urbanitae investors.

RISKS

All investments carry a risk. We detail the clearest risks we have identified for this project: 

• Delay in the expected times for obtaining the building permit.

• Delay in reaching the number of pre-sales required by the bank that may cause delays in the entry of the developer loan.

• Possibility of change of the agreed conditions. This risk includes potential substantial changes that take place from the start of the financing campaign until the formalization of the loan contract, in which case the project would be cancelled and the investment returned.

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Warnings and Risks

Urbanitae Real Estate Platform (Urbanitae) does not hold the status of an investment services company, nor a credit institution and is not attached to any investment guarantee fund or deposit guarantee fund. The information published by Urbanitae Real Estate Platform on its Website is for informational purposes only and in no case can it be considered as recommendations to investors.

The crowdfunding projects published by Urbanitae on its Website are not subject to authorization or supervision by the National Securities Market Commission or the Bank of Spain, therefore, all the information provided by the manager in relation to the projects has not been reviewed by them.

Urbanitae expressly informs that, in case of non-compliance with the total volume of the project's investment, the deadline for fundraising may be exceeded by up to 25%, maintaining the same investment conditions. Likewise, the project may be financed by Urbanitae when at least 90 percent of the financing objective has been reached, once the participation in the project that the platform itself may have is discounted. 

Investing in the projects published on this Website may entail certain risks, such as, the risk of total or partial loss of the invested capital, of not obtaining the expected monetary return or of lack of liquidity. Therefore, we warn investors to only invest an amount they are willing to lose and we suggest they diversify their investments to minimize and mitigate potential risks. In the event that the manager is unable to return or remunerate the funds received, Urbanitae will not return the investors their investment made.

This project will be open to any investor registered in Urbanitae, and any of the following registered persons may invest in it:

• Urbanitae partners who own at least 20% of the share capital or voting rights;

• Urbanitae managers or employees;

• Individuals or legal entities linked to these partners, managers or employees by control.

In this regard, Urbanitae guarantees that the investments of any of these people will be made through the platform, on the same terms and conditions as any other investor, without receiving any preferential treatment, or privileged access to information compared to the rest of the investors registered in Urbanitae. In accordance with Urbanitae's Internal Code of Conduct, these investors are obliged to internally communicate these operations.

Once the investment in the project is closed, Urbanitae will provide in the project's investment area information about the amount invested by these investors, the type of investor who has made the investment and the percentage it represents with respect to the total financed, always complying with the data protection policy.