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 participative financing 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 accordance with Article 8.2 of Regulation (EU) 2020/1503 of the European Parliament and of the Council of October 7, 2020, on European crowdfunding providers, we hereby inform you that partners, executives, and employees of wecity may invest on this occasion. These investments will be made under the same conditions as those of other investors, without receiving preferential treatment or privileged access to information.”

The investment

The developer, Veltrion Investment SL, is seeking financing through wecity to pay off a debt and renovate a building located in Madrid (18 Santa Isabel Street), where 18 residential units and 2 commercial spaces will be built. The project has a total floor area of 1,002 m² on a 321 m² lot.

The developer is applying for a fixed-rate mortgage loan at 10.75% in the amount of €4,500,000, divided into three phases (€2,750,000, €1,000,000, and €750,000), which will be secured by a first-lien mortgage on the property and will have a standard term of 9 months ( with the possibility of a 3-month extension). On this occasion, Phase I of the loan will be financed in the amount of €2,750,000, of which €2,518,409 will be used to repay the debt and the remainder will cover loan structuring costs as well as other expenses. The principal from the next two phases will be used to carry out the construction work.

The developer has contributed €2,287,088.50 of its own funds toward the acquisition. Additionally, it will contribute €300 ,000 on the day of signing. The developer’s total contribution represents 36.50% of the total funds required to carry out the project. Regarding sales, 0 out of 18 units have been sold (0%), as the developer intends to retain the property to generate a return by using it for medium-term rentals.

The loan is expected to be repaid to wecity investors once bank financing is secured and the asset has begun to generate income.

The project

Location and surroundings

Santa Isabel Street is located in one of Madrid’s most sought-after areas, just a stone’s throw from Puerta del Sol, the Barrio de las Letras, and Lavapiés. It’s a highly attractive location for both living and investing, thanks to its excellent transportation links and wide range of shops, restaurants, and services.

Just a few minutes away are some of the city’s most iconic landmarks, such as the Prado Museum, the Reina Sofía Museum, the Plaza Mayor, and El Retiro Park. This well-established neighborhood combines history, urban life, and great real estate appeal.

Mortgage collateral

The loan will be secured by a^{first-priority} mortgage on the property, located at 18 Santa Isabel Street (Madrid).

According to the appraisal report prepared by Savills, the Current Appraised Value is €4,527,503.43, and the Appraised Value Upon Completion (HET) is €7,819,208.40. The loan to be granted to the developer is €2,750,000.00, which represents a Loan-to-Value (LTV) ratio of 57.55% based on the HET.

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 loan agreement.

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.