The six luxury villa construction projects will be completed by Q2 2024
Bridging and development lender Fiduciam has provided an additional EUR 30 million (around £26.6 million) to a real estate developer in Mallorca for its six new ground-up projects.
The six luxury villas will be constructed in one of the Mallorca’s most sought-after locations, with the projects expected to be completed by the second quarter of 2024.
Since 2019, Fiduciam has been funding the developer, which is led by two professionals with considerable real estate development experience in London and Mallorca. One of the partners previously worked as a realtor for Engel and Völkers, while the other has 20 years of luxury development experience and was formerly global project director for Candy & Candy.
In July 2022, the developer secured additional equity and mezzanine finance to support their expansion through a partnership with a family office. This transaction spanned three jurisdictions – Spain, Denmark, and the UK – and benefitted from Fiduciam’s capability in offering tailored cross-border solutions.
A bespoke inter-creditor agreement was required to satisfy the family office’s investment objectives while protecting Fiduciam’s senior-secured position. At the same time, the finance costs were reduced by embedding flexibility within the finance documentation, which allows pre-sale deposits to be used towards financing the works.
Earlier this year, Fiduciam announced that it was financing a project of 11 new townhouses in Palma de Mallorca, one of seven projects that the lender has been financing for the developer, all in the south of Mallorca.
“It took hard work and lateral thinking to structure the funding of this ambitious development program and keep all the stakeholders’ incentives aligned,” Valeria Quintana Barbella, Spanish underwriting manager at Fiduciam, commented.
“With the developer’s commitment to quality, sustainability and attention to detail, these six new villas will be a true testament to the developer’s passion for excellence and they will set a new standard for luxury living in Mallorca. Fiduciam is glad to participate.”
“The legal and financial structuring of this transaction was highly complex,” Estela Lopez Bergua, finance associate at Fiduciam, added. “We demonstrated that we were up to the task, against very tight deadlines. Of course, the prospect of further site visits in Mallorca is a plus!”
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