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Nagano Park

Mezzanine financing for office building

Net yield
7 - 7,25

% p. a.

Investment club
7,25

% p. a.

67,178,221.03

CZK

Invested

100,000,000

CZK

Minimal goal 40 mil. Kč

The details below are valid as of the start of the fundraising period, 7/3/2022.

Investors can find regular reports on the progress of the project at .

In case the loan and the relationship with the financed SPV went without any issues (specifically the agreement covenants were not broken and the financed project fulfills our original presumptions about its financial performance) we give the investors in this opportunity an option to exit their investment in the Q3 2024 (earlier than the actual maturity of the loan which is expected to be in 45 months). Více informací zde.
  • Invested

    67,178,221.03

    CZK

  • Expected maturity

    45

    months

  • Number of investments

    857
  • Minimum investment

    5,000

    CZK

  • Payments

    Interest paid annually

  • Project location

    Praha, Strašnice

  • Developer

    GEOSAN DEVELOPMENT

    More about the developer

  • Purpose of the loan

    Financing part of the project costs

  • Type of credit

  • Securing


    Assumption of debt by the parent company GEOSAN HOLDING (EUROPE)
  • Current project phase

    Operational phase

  • Introductory summary
  • Product description
  • Project description
  • Timetable
  • Investment analysis
  • Risks
  • Check
  • Developer
  • Introductory summary
  • Product description
    • Investment product description
    • Participation parameters
  • Project description
  • Timetable
  • Investment analysis
  • Risks
  • Check
  • Developer
The text below was translated automatically. Therefore, we cannot guarantee the accuracy of the translations.

Introductory summary

We offer you participation in income property, office complex in Prague 3 - Nagano Park. is provided for the purpose of refinancing a part of the equity of the developer GEOSAN HOLDING (EUROPE) Ltd. - the parent company of the development group Geosan Development (collectively "Geosan") - which purchased Nagano Park in 2018 from the real estate company Red Group. The acquisition was financed with senior financing from Česká spořitelna a.s. (the "Senior Lender"). Entry Value for the Upvest loan is 65.7% and the estimated for the following year is 2.4x.

Nagano Park consists of 4 office buildings and one data center building (Telehouse). The complex is currently stabilized at approximately 94% occupancy. However, the largest tenant, CETIN, whose share in the total lease of the complex is 16.7%, has announced that it will not remain in the complex on the expiry of its lease agreement on 30 April 2023 and the future use of the Telehouse building was therefore one of the main points of the commercial analysis.

The Upvest loan, together with the senior loan, is expected to be repaid by way of a refinancing of the total debt of the asset on 31.12.2025, which is the final maturity of the senior loan. Interest payments will be made annually. The principal amount of the loan is repayable no later than the final maturity date of the loan, 31 January 2026.

The main risks of the loan include a higher concentration of lease expirations in the period 2023-2024, which also results in a shorter of the object. Approximately 53% of the currently contracted lease expires by 31.12.2023 and another 20% by 31.12.2024. Over 86% of the currently contracted lease expires by the expected maturity of the Upvest loan. Therefore, in addition to the tenant creditworthiness analysis, the ability to of the borrower to proactively and efficiently renew leases with existing tenants or secure new tenants in the market. From Upvest's perspective, this risk is mitigated/addressed by (i) Geosan's short but successful track record in managing the site (occupancy increased by c.24% over 3 years of ownership), (ii) the validation of the site and the office product offered at the site (weighted average lease term in excess of 9 years) and (iii) an assessment of the impact of changes in key operating assumptions, such as a decline in market rents, reduced availability of potential tenants in the market and therefore a longer period to lease vacant space, or higher permanent vacancy on the project's ability to generate sufficient cash flows and on the value of the asset (see Scenario Analysis section for further details).

Legal due diligence did not identify any facts that would jeopardise the granting of the loan. The focus was on assessing the proper ownership of the real estate by the borrower, review of the project company, lease agreements, or credit relationship with the Senior Lender.

Technical screening also did not identify any facts that would jeopardize the granting of the loan. The main focus of the technical screening was on the current condition of the property, checking the lease agreements commercially and technically, and preparing an expert valuation of the property.

Reporting to investors will be done on a semi-annual basis.

Where the amount is quoted in euros, it has been calculated at an exchange rate of CZK 24.50 to EUR 1.

Product description

The product described in this Investment Analysis is participation in for the purpose of refinancing part of the intra-group loans granted to the project company.

Nagano Park is a fully operational business park that is leased to nearly 50 tenants. The lease proceeds will be used to pay operating expenses and finance costs on the Senior Lender's loan and interest to Upvest. The Upvest interest will be paid by the co-borrower of the loan agreement, Geosan's parent company, from its own resources where applicable.

Owner Geosan Development, the parent company of Geosan Development Group, is the owner of the project. Geosan Development has a strong track record primarily in the residential development sector, where it has been active since 1998. During its existence, the group has successfully completed 22 projects and currently has several more in the pipeline, especially in the locations of Prague - Břevnov, Prague - Ruzyně, Prague - Třebešín and Prague - Radlice. The company is backed by Mr. Luděk Kostka and Mr. doc. Ing. Michal Korecký, Ph.D.

is granted for the operational phase of the project, the participating investor does not take the construction and implementation risk, but the operational and liquidity risk associated with the refinancing or sale of the asset. Geosan will use from Upvest to refinance part of the intercompany loans granted to the project company, using such funds for the purpose of acquiring land for future development in the vicinity of the project, up to an amount of EUR 98 million. CZK 98 million. Česká spořitelna, a.s. ("Senior Lender") is the senior lender to the Project. Repayment Upvest will thus be subordinated to the repayment of the Senior Lender's loan.

The Borrower is obliged to maintain the value of the below 70% and the LTV above 1.10. Investors will be updated on the progress of the project on a semi-annual basis (see more under Check).

Investment product description

Product

(participation in and losses from )

Refinancing of shareholder loans of up to EUR 98 million. CZK
Location of the financed projectU nákladového nádraží 6, 8, 8a, 10, Praha 3 - Strašnice and K Červenému dvoru 25, 25a, Praha 3 - Strašnice
Lender upvest s.r.o.; borrowers GEOSAN DEVELOPMENT, BRG Omega s.r.o.
Investment objective100 000 000 CZK
Estimation of property valueEUR 36 400 000 (CZK 891 800 000)
EUR 19 232 637 (CZK 471 199 596)
Credit Upvest100 000 000 CZK
Developer's own resources305 600 404 CZK
Minimum investment amount5 000 CZK
Principal in one lump sum at the final maturity date
Type of interest
03.03.2022 - 20.04.2022
Estimated start of interestFive (5) days after
Loan maturity from upvest
30.04.2023
31.12.2025
31.01.2026
Securing a loan


Assumption of debt by the parent company GEOSAN HOLDING (EUROPE)

OwnerGEOSAN HOLDING (EUROPE)
Project Company / LoanedBRG Omega s.r.o.

Participation parameters

The borrower may repay the loan from Upvest no later than the final repayment date in one lump sum or in instalments. The investor shares in the proceeds from day 5 of the successful fundraising until the loan is repaid in full. The actual interest on the principal portion drawn starts on the day after the loan is drawn by the borrower. The proceeds are paid to the investors after a given loan or interest payment to the borrower, and the proceeds corresponding to the reservation fee (i.e. the reservation of funds until the borrower's drawdown conditions are met) will be paid to the investors together with the first interest payment.

The Borrower may repay the loan from Upvest before the next maturity date. In such a situation, the investors' return is protected by the Borrower's fees, which are set at a level to match the nominal return that the investor would have received if the loan had been repaid on the date of next maturity (30 April 2023).

8

% p.a.

Total interest on the loan

1

% p.a.

Upvest fee

7 - 7,25

% p.a.

Net income

7 - 7,25

% p.a.

Net yield for the Investment Club

Interest income paid annually upon approval of the Senior Lender. Principal due no later than the final maturity date.

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Contact

  • info@upvest.cz

    novyprojekt@upvest.cz

  • upvest s.r.o.
    Budova Churchill I – BASE
    Italská 2581/67
    120 00 Praha 2Vinohrady

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