The Company, established in 2011, is a real estate property management company. In 2016 the Company finished its first renovation project of a 4-apartment building in Riga. All 4 apartments are currently rented out to tenants and the Company is receiving stable rental income. In 2022 the Company purchased another building in the same area of Riga. The building was purchased with the Company’s own funds and loans from its owner. Construction works were already started at the end of 2022. The current status of the project is: fully changed communications, finished renovation and insulation of the facade, everything ready to finish indoor works. The indoor works are the final stage and should be finished by the end of July. After a full renovation, the property will be divided into 8 separate apartments, fully furnished, and will be offered for rent. It is expected that first tenants will be able to enter the property in August or September.

In February and April 2024, the Company received loans in total amount of EUR 184,140 to cover a part of the final stage works to be done. All tranches, including the previously issued ones, will share the same collateral, however, as previously stated, the overall LTV will not exceed 70%. 

To proceed with the renovation process and continue the interior decoration, the Company is currently seeking EUR 69,000 financing for 14 months to settle with suppliers. The loan will carry a 10.92% annual interest rate (0.91% monthly) and it will be amortized at the end of the term. Principal repayment is planned from loan refinancing in a commercial bank with a long-term loan. The Company already has received an offer from one of the commercial banks, however, the management believes that after fully finishing the reconstruction, the Company can receive a significantly better offer. The future value of the property under development according to the valuation report from January 2023 will be EUR 1.184M. 

The loan will be secured with a first-rank mortgage on a separate apartment in the previously renovated building with a total market value of EUR 362,000 (LTV 70% together with the other tranches). The market value was appraised by Latio in February 2024. In addition, a personal guarantee from the Company’s manager is provided.  The project risk rate is A (90 out of 100).

This is the 7th tranche of financing for the project. Previously EUR 861,147 in total financing was issued for the project, out of which EUR 513,326 was secured with a pledge on the building in the renovation process and EUR 347,821 loans with pledges on other properties.

There are a number of factors that make lending to the Company an attractive opportunity and the main highlights are as follows:

• The loan will be secured with a first-rank mortgage on an apartment in the previously renovated building with a total market value of EUR 362,000 (LTV 70% together with the other tranches).
• The Company has previous successful experience in a similar real estate project development.
• The Company has 10 years of experience in the real estate industry.
• The loan has a clear repayment structure from property further refinancing in a commercial bank.