Canidelo Apartments

Canidelo Apartments is a beachfront ground-up development. The location is zoned as commercial and services, suitable for mixed commercial and hotel development. The goal is to develop serviced apartment for sale and lease back.

Address:

Lote 19, Avenida Beira Mar, V.N de Gaia
Total construction area:

11,232 sqm
Estimated Investment Timeline:

03.2023 – 12.2026
(45 months)
Report issue:

#4
Date of Issue:

31-03-20234
Next Issue:

30-06-2024

1. Project Updates

Two official information requests were submitted (PIP), one for a single volume building and another for two volumes building.
- The one volume PIP request for appreciation suspension was approved in order for the allotment change to be submitted and approved.
- The two volumes PIP will be rejected due to the volumes proposed will not match with allotment change now submitted.
- New allotment change was submitted to city hall to change the zoning to add tourism use and also increase the number of units, and is under appreciation, we expect to have this approved by May 2024. Legal Advert was installed on the plot.
After the process of allotment change is completed, we could move forward with project execution and construction, no further licensing process would be required.
Adriano Pimenta Arquitectos, Lda conducted the concept phase and preliminary study for one volume building, that resulted in 80 units of tourism apartments. Plans of current study are shared in the photos area. The plans shared are not completely finalized and will be slightly modified in order to accommodate areas and infrastructures needed for the operation of Tourism Apartments and will be more detailed including the elevations.
- 80 Units with 80 parking spaces
- Mainly Typologies of 1 bedroom units and also some 2 bedroom units
- Indoor Pool, gym and Co-Working spaces
Fire Safety consultant and Structural Engineer consultant, were also involved in this stage of the preliminary design in order to stabilize layouts and solutions and incorporate the requirements needed.
Tourism expertise Consultant also is involved in order to set out and include all the requirements needed for these type of projects (Tourism Apartments)
Multiprojectus from Garcia Garcia will be hired as the engineering team for the project. Multiprojectus will be responsible for the execution of projects, and construction supervision and also be involved in the concept and licensing phases. The total fee agreed upon was €220,000. (not awarded)

2. Financial Updates

For the 1st quarter of 2024 doesn’t exist major updates on the financial plan. Most of the updates are related with the licensing process in place for serviced apartments

I Capital Structure & Profit Forecast

On March 2023, the fund acquired the asset holding company (Sparkling Joy, Lda) via a combination of share purchase and shareholder’s loan (as of September, 2023 the total equity injected is €2.25M:

Capital: 525,000 euros

Shareholder’s loan: 1,725,000 euros

After reassessment of the project's business plan we are presenting the following scenarios for equity requirements and respective profits:

Scenario A:
- Total common equity required of €4.0M which will be used to support land acquisition costs and 100% of project's soft costs;
- In this scenario would be required an additional capital injection of €2.8M. This additional cash could be provided through common equity injections or other alternative instruments such as preferred equity or debt.
- At this stage, we do not have full visibility over the alternatives that could be applied to this project which means that the estimated profit for this scenario will need to be reviewed according to the financing costs.
- According to the assumptions (including interest rate update) and limitations above identified we are pointing for a return of equity of 53.4%

Scenario B:
- In this situation common equity will be used to support land acquisition costs, soft costs, 15% of hard costs and furniture expenses. In this scenario we have assumed an assumption where the bank loan for construction will not exceed 85% of the total amount.
- Besides the construction loan, we are not expecting any other instruments of debt. Common equity required to this would be higher (€7.0M), however this will significantly change the return of equity to 31.9%.

Capital Structure & Financing

Total Estimated Project Cost

19,226,569.00€
Total Capital Invested

2,250,000.00 €
Debt Financing

11,233,340.00 €
Construction Loan

11.233.340,00 €
Equity Financing

2.250.000,00 €
Common Equity

6.910.680,00 €

Project Profit Forecast-Allocated to Equity Investor

Common Equity Investor (Scenario A: Land + Soft Costs)

4,134,976.00€
Additional Capital Required (Scenario A)

1,884,976,00 €
Profit Forecast (Scenario A) - Allocated to Common Equity Investor

2.253.350,00 €
Total Projected Return (Scenario A)

53.4%
Common Equity Investor (Scenario B: Land + Soft Costs + Hard Costs)

6,910,680.00€
Profit Forecast (Scenario B) - Allocated to Common Equity Investor

2.253.350,00 €
Total Projected Return (Scenario B)

31.9%