Investment opportunity

  • High-yielding investment in construction sector, financing of refurbishment of hostel in Riga, Latvia.
  • Secured debt, 19% planned annual return.
  • Investment principal buyback is available at 5% penalty rate.

Project description

The Borrower “Spade” SIA is an active company specializing in real estate management (incorporated in 2007). The annual turnover in 2018 was 220 000 EUR, the company equity is 195 000 EUR, registered share capital is 45 532 EUR. The Borrower operates a hostel which is located in Riga, Latvia (Mezaparks, Kisezers). It has 7’200 sqm, 180 rooms, 350-480 beds. The financing is needed for refurbishment of hostel which will allow to bring turnover in one years to 540 000 EUR, but also decrease operational cost. Over 50% of 1.5 mil EUR investments is already done (see pictures).

The Borrower is going for the third round of external financing of 900 000 EUR in several tranches. 700 000 EUR from proceeds will be used to refinance existing liabilities with Crowdestor and 200 000 EUR will be invested into further renovation. It is planed that in February 2020 the fourth and last one round of funding of 300 000 EUR will take place. Then total liabilities of the Borrower will be 1.2 mil EUR given renovation budget of 1.5 mil EUR (see attachment). Thus, Borrower’s equity contribution will be 300 000 EUR, not including operational cost, architectural and engineering projects paid by the Borrower.

In one year ENVESTIO funds will be replaced with bank financing as soon as the project will generate first cash flow (second half of 2020). The preliminary agreement with a bank is reached.

The renovation plan included rooms renovation and refurbishment with new furniture, efficient LED lighting, all-building up-to-date Wi-Fi, new kitchens, showers and toilets. The energy efficiency of the building also had to be brought to the modern level to keep heating and electricity bills down. As of now the building is thermo insulated from inside (see pictures), the all new heating network is installed (see pictures) including modern double panel radiators and finally all new electrical network is installed (see pictures). Also, all new fire security system was engendered and put in place. 90% of rooms are prepared for wall painting and floor laying (see pictures). This round of financing will be used to rebuild showers, kitchens and toilets.

There is valid Construction Permit issued for all work and engineering projects (heating system, electrical system, water/sewage, ventilation) produced by professional firms.

Project’s primary target clientele remains: foreign worker in Riga, Latvian regional work migration to the capital Riga, students, low budget business travelers (as the project will have some 10 two-room apartments with all fitting), sport teams.

Project’s web site is in production and soon will be online. The Borrower is preparing a launch marketing campaign and has set a budget for online marketing.

Market overview is available here.

Sample repayment schedule

Envestio participant’s investment - EUR 1 000.00
Payments:

  • 07.12.2019 - EUR 15.62
  • 07.01.2020 - EUR 16.14
  • 07.02.2020 - EUR 16.14
  • 07.03.2020 - EUR 15.1
  • 07.04.2020 - EUR 16.14
  • 07.05.2020 - EUR 15.62
  • 07.06.2020 - EUR 16.14
  • 07.07.2020 - EUR 15.62
  • 07.08.2020 - EUR 16.14
  • 07.09.2020 - EUR 16.14
  • 07.10.2020 - EUR 15.62
  • 07.11.2020 - EUR 1016.14

Total expected return: EUR 1 190.56

Invest in this project

 

Loan information

Loan IDEN018129
Project start date07.11.2019
Borrower“Spade” SIA, Reg. Nr. 40003947548, Latvia
Funding Target€ 300 000
Loan PurposeFinancing of refurbishment of hostel in Riga, Latvia
Loan Period12 months
Interest Rate19% per annum
Repayment of Loan PrincipalIn full at the end of the Loan Period
Investment principal buyback availableYes, 5% penalty rate
Payment of Interest PaymentsMonthly, on a specific date
Financing typeSecured debt
Guarantee from the Project’s ownerCommercial pledge in favour of Envestio Collateral Agent, Personal guarantee

 

Start investing now

Investment buyback is guaranteed!
Sell an investment from your portfolio back to Envestio at any moment!

Start investing