Description

WECITY complies with the provisions of Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European providers of equity finance services for companies and Title V of Law 5/2015 on the promotion of business financing as amended by Law 18/2022 of 28 September on the creation and growth of companies. It is authorized by the CNMV as a Participatory Financing Service Provider, registered under number 9, with a favorable proposal from the Bank of Spain.

Investor, before making your investment, please read the basic information for the investor client, as well as the pre-contractual cooling-off period for inexperienced investors.

Skin in the game: “In compliance with Article 8.2 of Regulation (EU) 2020/1503 of the European Parliament and of the Council of October 7, 2020 on European providers of equity financing, we hereby inform you that partners, managers and employees of wecity may invest in this opportunity. These investments will be made on the same terms as those of other investors without receiving preferential treatment or privileged access to information.”

The investment

The developer DZERO PRIME SL is seeking financing through wecity to cover the costs of completing the renovation of two adjoining premises at 115-117 Calle General Ricardos, in Madrid.

The asset has 925.43 m2 of adopted surface area and 837.46 m2 of useful surface area, in which 23 apartments will be developed through a project for the implementation of residential use as a community residence, of which 21 units are single rooms, 1 is a two-room apartment and 1 is an accessible room. The rest of the communal spaces will be used for rest, leisure and coworking areas.

They have a building license, which has been processed through ECU by Affidavit.

The project will be financed through a mortgage loan in the amount of €1,000,000 at a fixed rate, which will have a first-degree mortgage guarantee and a term of 6 months + 3 months of possible extension.

The developer has contributed equity amounting to €1,636,673.95, which has been used to acquire the asset and to advance the work. The project is currently 71.38% complete, all using the developer’s own funds.

The repayment of the loan to the investors in wecity can take place in three ways: with the sale of the asset at a profit, with the repayment of the loan with the investor’s own funds or with the entry of bank financing.

Through wecity you can participate in a fixed-rate loan operation with an annual interest rate of 11% in an estimated term of 6 months (4 of which are mandatory) with the possibility of an extension of 3 additional months.

Interest payments plus the return of the capital invested will be made on expiry.

The project

Location and surroundings

The street General Ricardos 115-117, in the district of Carabanchel, stands out for its connectivity and real estate offer. With direct access to Metro Line 5 (Urgel and Oporto) and several bus lines, it allows a quick connection to the center of Madrid. Its surroundings combine the tradition of a consolidated neighborhood with the convenience of having all essential services, such as schools, health centers and a wide range of shops. It is also close to hospitals such as Gómez Ulla Hospital and 12 de Octubre University Hospital.

Its real estate offer is diverse, with flats in classic buildings and renovated options, which makes it an attractive alternative for both families and investors. It also stands out for its proximity to Madrid Río, one of the city’s main green and leisure areas, ideal for sports and recreation. Thanks to its location and dynamism, General Ricardos 115-117 represents an interesting option within the real estate market, with more affordable prices than in the center without sacrificing its advantages.

Collateral and appraisal

The loan will be secured by a first ^{degree mortgage} on the asset located at 115-117 General Ricardos Street, Madrid.

According to the appraisal report carried out by SOCIEDAD DE TASACIÓN, the current appraisal amounts to €1,916,491.49. The loan to be made to the developer is 1.000.000 € which represents a Loan to Value (LTV) on the current appraisal of 52.18%.

The HET value of the asset is €2,287,561.17, which means an HET LTV of 43.71%.

Finally, the first drawdown of the loan is €615,085.75, which means an LTV of 1st drawdown of 32,09%.

Collateral agent

The constitution, conservation, management, administration and, if applicable, enforcement of the pledge on behalf of wecity’s investors shall be carried out by an entity external to wecity.

In this case, the designated Collateral Agent will be the one indicated in the Fundamental Data Sheet of the investment.

Rating

wecity, as a provider of equity financing services and in compliance with Delegated Regulation (EU) 2024/358 supplementing Regulation (EU) 2020/1503 of the European Parliament and of the Council, provides a description of the credit rating method
of the projects used to calculate the ratings. If the calculation is based on accounts that have not been audited, this shall be clearly stated in the description of the method.

Monitoring

The promoter must justify the use of the funds in each of the applications. The use of the funds by the promoter will be monitored by a company external to wecity.

Compliance with Regulation (EU) 2020/1503 🇪🇺

Risk warning

Investing in this crowdfunding project involves risks, including the risk of partial or total loss of the money invested. Your investment is not covered by the deposit guarantee schemes established in accordance with Directive 2014/49/EU of the European Parliament and of the Council (*). Your investment is not covered by the investor compensation schemes established in accordance with Directive 97/9/EC of the European Parliament and of the Council (**). You may not get any return on your investment. This is not a savings product and you are advised not to invest more than 10% of your net wealth in crowdfunding projects. You may not be able to sell the investment instruments whenever you want. Even if you can assign them, you could suffer losses.

Pre-contractual cooling-off period for inexperienced investors

Inexperienced investors have a cooling-off period of four (4) days during which they can, at any time, revoke or withdraw, at any time, from their investment offer or expression of interest in the participatory financing offer without having to justify their decision and without incurring a penalty. The cooling-off period begins at the moment when the potential inexperienced investor makes an investment offer or expresses interest and expires four calendar days from that date. To exercise their right of revocation, Investors may send an email to the following address: reclamaciones@wecity.io, filling in the “subject” field of the email as follows: “REVOCATION – Name of the Opportunity – Full name of the Investor”. In the event that a monetary contribution has been made in connection with the financing offer, this amount will be returned as soon as possible to the wallet that, as an investor/user of the ‘WECITY’ Platform, has been opened in the Payment Institution ‘LEMONWAY’.

Credit risk

Credit risk is defined as the loss that may occur in the event of non-payment by the counterparty in a financial transaction. In this specific case, the risk that the Promoter will not pay the principal and/or interest of the Loan.

Sector risk Risks inherent to the specific sector.

These risks may be caused, for example, by a change in macroeconomic circumstances, a reduction in demand in the sector in which the participatory financing project operates and dependencies on other sectors. In any case, the investor must bear in mind that adverse economic conditions or cyclical changes may lead to a weakening of the Promoter’s ability to meet its financial commitments in relation to the loan.

Risk of default

The risk that the project developer may be subject to insolvency proceedings and other events affecting the project or the project developer that result in the loss of the investment for the investors. These risks may be caused by a variety of factors, including, but not limited to: (serious) change in macroeconomic circumstances, mismanagement, lack of experience, fraud, financing not fitting with the corporate purpose, failure in the product launch or lack of liquidity. In the event of the Promoter’s bankruptcy, the holders of the credits will be considered as credits with special privilege, as they are secured by a mortgage guarantee, in accordance with the cataloguing and order of priority of credits established by Royal Legislative Decree 1/2020, of May 5, which approves the revised text of the Bankruptcy Law (hereinafter, the “Bankruptcy Law”), except for those amounts that, in accordance with Article 272 of the Bankruptcy Law, should be classified either as ordinary credit or as subordinated credit, as appropriate.

Risk of lower or delayed return

The risk that the return will be lower than expected or that the project will default on the payment of principal or interest.

Risk of illiquidity of the investment

The risk that investors will not be able to sell their investment. There is no active trading market for the loan, so it is possible that the investor will not be able to find a third party to whom to assign the loan.

Other risks

Risks that are, among others, beyond the control of the project developer, such as political or regulatory risks.