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Kukleny Mall

Income property acquisition mezzanine loan

Net yield
6.25

% p. a.

27,500,000

CZK

Invested

27,500,000

CZK

 

Níže uvedená data jsou platná k začátku fundraisingu, tedy k 24/6/2021.

Pravidelné reporty k průběhu projektu najdou investoři na přehledu svých investic.

  • Invested

    27,500,000

    CZK

  • Expected maturity

    12

    months

  • Number of investments

    469
  • Minimum investment

    5,000

    CZK

  • Payments

    Interest paid monthly

  • Project location

    ulice Kutnohorská, Hradec Králové

  • Developer

    Traxial a.s.

    More about the developer

  • Purpose of the loan

    Financing of part of the purchase price of the real estate, up to half of the own resources required by the Senior Lender

  • Type of credit

    Mezzanine bridging loan for acquisition

  • Securing

    Surety statement of the parent company Traxial a.s.
  • Current project phase

    Operational

  • Úvodní shrnutí
  • Popis produktu
  • Popis projektu
  • Časový plán
  • Investiční analýza
  • Rizika
  • Kontrola
  • Developer a Lidé
The text below was translated automatically. Therefore, we cannot guarantee the accuracy of the translations.

Introductory summary

We offer participation in the financing of the acquisition of a functional shopping centre in Hradec Králové - Kukleny ("OC Kukleny"). The bridge mezzanine loan is provided for the purpose of paying part of the purchase price of the real estate by the developer Traxial a.s. ("Developer") from the current owner Albert Česká republika, s.r.o. ("Albert"). The Senior Bridge Loan will most likely be provided by Komerční banka a.s. During the term of the loans, a lease agreement will be in place with Albert and other smaller tenants, but Albert guarantees the amount of rent paid by all tenants to the Developer. In the next phase of the project, i.e. after the repayment of the loan from Upvest, a complete reconstruction of the shopping centre is planned, or the completion of a retail centre in the adjacent car park.

The Upvest loan is provided for the period of uninterrupted operation of OC Kukleny until the start of reconstruction. Interest will be paid monthly, the principal is payable in one lump sum on the final maturity date of the loan, i.e. 14 July 2022. The developer has already successfully completed similar transactions with Albert and this is a repetition of an already implemented business model.

Current predicted level of the indicator is 3.50. This means that the operation of the shopping centre under the lease agreement with Albert, after deducting operating costs, taxes and interest payments on the senior loan, should generate more than 3.5 times higher free cash flow than the regular interest payment on the Upvest loan. One of the reasons for the relatively high ICR is that there are no regular principal repayments on the senior loan during the term of the loan, only regular interest payments. The estimated amount of over the life of the loan is 80,4 %. The maximum LTV limit is set at 85,0 % in the loan agreement.

Legal due diligence did not identify any facts that would jeopardise the granting of the loan. Emphasis was placed on the assessment of all contractual relationships entered into with Albert.

Technical examination also did not identify any risk to the granting of the loan. The main focus of the technical review was on the current condition of the property, a technical review of the transaction documentation and an estimate of the cost of future reconstruction (to assess the feasibility of repaying the Upvest loan by refinancing).

From the conclusions sensitivity analysis shows that even with an increase in operating and capital costs of up to EUR 6.2 million, the cost of the project would be higher than the cost of the loan. CZK 6.6 million per year (over and above the predicted costs of CZK 4.7 million per year), the free cash flow will be sufficient to pay the interest to Upvest. We have also focused on the assessment of the future situation after the completion of the reconstruction and the estimation of the amount of the follow-up financing (in connection with the refinancing of this loan). From the conclusions of this analysis, we assess that the option of repaying the loan by refinancing is feasible.

The main risks of this investment opportunity include the risk of refinancing the loan before the start of the shopping centre reconstruction, the risk of non-repayment of the loan principal and the risk of non-payment of interest. However, this is not an exhaustive list of project risks, of which there are many more.

Reporting to investors will be on a quarterly basis.

Product description

The product described in this Investment Analysis is in a mezzanine bridge loan for the purpose of acquisition of the OC Kukleny development project.

OC Kukleny is a fully operational shopping centre, the main tenant is Albert. The monthly rental income will be used to cover operating costs, finance costs on the Senior Lender's loan and interest to Upvest. Interest income will be paid to investors monthly, subject to the approval of the Senior Lender.

Traxial - Merkur s.r.o. is the developer of the project, which is backed by the Traxial a.s. development group. During its existence, it has successfully completed more than 40 buildings for Czech and foreign investors with a total investment volume of more than CZK 2.7 billion. The sole shareholder of Traxial a.s. since its foundation is JUDr. Zdeněk Prázdný. The Group has long been cooperating with major tenants (e.g. Billa, Penny, JYSK). Completed and long-term occupied properties are subsequently sold to ZDR Investments real estate funds. The developer has previously successfully implemented a similar business model with Albert, which is intended for OC Kukleny. These projects are now owned by ZDR Investments funds.

Upvest provides mezzanine loans for property acquisitions. The loan will be provided to a notary escrow used to settle the purchase price. Senior financing for the acquisition is provided by Komerční banka a.s. (the "Senior Lender"). The loan will be subordinated to the Senior Lender's claim.

The developer is obliged to maintain the value of the indicators a below 85% and the ICR above 1.10. Investors will be kept informed of the progress of the project on a quarterly basis (see section Check).

Description of the investment product

Product

(participation in and losses from )

Financing of part of the purchase price of the real estate, up to half of the own resources required by the Senior Lender
Location of the financed projectKutnohorská street, Hradec Kralove
Lender upvest s.r.o.; borrower Traxial - Merkur s.r.o.
Investment objective27 500 000 CZK
Total 138 687 500 CZK
of which financed 83 000 000 CZK
of which financed from Upvest27 500 000 CZK
of which financed 28 187 500 CZK
Minimum investment amount5 000 CZK
Type of interest

Interest payable monthly

Principal in one lump sum at the final maturity date

24.06.2021 - 19.07.2021
Estimated start of interestAfter
Loan maturity from upvest
approx. 6 months (31.12.2021)
approx. 12 months (14.07.2022)
approx. 12 months (14.07.2022)
Securing a loan

Surety statement of the parent company Traxial a.s.

DeveloperTraxial a.s.
Project companyTraxial – Merkur s.r.o.

Participation parameters

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

The developer may repay the loan from Upvest before the next maturity date. In such a situation, the investors' return is protected by the developer'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 (31 December 2021).

It is assumed that the developer will obtain a building permit for the complete reconstruction of OC Kukleny by the final maturity of the loan. However, the Upvest loan will be repaid prior to the commencement of construction of the complete reconstruction, but no later than the final maturity date.

0,75 - 1,75

% p.a.*

Fee for the provision of payment services

6,25

% p.a.

Net income

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

* The amount of the payment service fee depends on whether Commercial Bank becomes the Senior Lender. However, this does not affect the net proceeds paid to investors. In case the senior lender is Komerční banka a.s., the interest rate for the developer is 7.0% p.a. In case of another senior lender, the interest rate is 8.0% p.a.

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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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