Zeļļu Street - 6th stage
Closed for investment
The mortgaged property on Zeļļu street, that consists of a 4-story masonry building with a total area of 1255 sq.m and a land plot with a total area of 941 sq.m, is put up for a refinancing round.
Due to COVID-19 caused circumstances, the reconstruction was initially slowed down and has been restarted in July 2020 continuing to carry out the initial schedule of renovation works.
Zeļļu Street currently has three outstanding loans on Bulkestate platform. To repay the investments and accrued interest for the loan of 450 000 EUR with the maturity term on August 23, it is refinanced with a more profitable annual interest of 15% and a 12-month loan term, yet the prognosis predicts that it will be repaid before term as the apartment sales will be initiated and carried out in autumn and winter of 2020.
To speed up the apartment reservation, the construction project of each of the four floors has been developed separately, allowing starting sales of apartments without completing the renovation of the whole building. As the building floors have been separated, as soon as one is completed, it can be put into operation, allowing potential buyers to visit and make their reservation.
Furthermore, a demo apartment is currently being refurbished to show a real-life apartment layout and an interior design sample.
The property is being rebuilt into 13 mid-range apartments and two commercial premises on the ground floor while keeping its historic value and charm. The renovation comprises both internal and external works.
So far, the project costs that include already finished works and planned works as well as installing the gas heating system and refurbishing of the apartments comprise of 550 000 EUR, however, half of the costs for refurbishing will be covered by the buyers when they will make a reservation for the apartment.
To give new life to the authentic early 20th-century building, the project required large-scale administrative preparation before carrying out the actual renovation. Initially, a project had to be developed for the building’s facade and the replanning of the apartments, providing layout plans to reflect modern living and make better use of the space. Separate projects for the construction of a gas heating system and for a power increase capacity were prepared as well. Afterwards, the property was divided into apartment properties while also settling with the existing tenants in order to vacate the building.
Reconstruction began with repairing and strengthening the basement while, at the same time, the end wall of the building was insulated. Additionally, facade’s renovation has been already finished, the roof has been covered with specially designated roofing materials to fill gaps and seams and connections like electricity grid, water and sewage systems were repaired and thoroughly checked to ensure their smooth running. All the building's windows have been changed and, when it comes to the internal renovation, inner walls were dismantled to initiate construction of the new apartment layouts.
Furthermore, all buildings’ communication have been rewired, new gas heating risers have been installed, while, in apartments, floors have been dismantled, re-insulated and levelled.
As part of the construction project, the old storage buildings in the yard were dismantled to vacate the land for pavement and further construction.
Works in process
At this stage, the building’s staircase is being refurbished while the reconstruction of a demo apartment is carried out as well. To make the project more flexible, two interior styles will be offered for the owner to choose between.
The project to increase the electricity capacity for the building has been completed and will be carried out in the next week. In the apartments, new inner walls are being built and the construction of new floors continues.
All doors of the building and apartments will be changed, the redesign of apartments completed with a full refurbishment and new layouts. The surrounding territory reconstruction will include paving the yard with cobblestones, building a parking lot, playground and greenery for the residents to enjoy. All renovation works are planned to complete in a 2 to 3-month period.
Sales of apartments
All apartments have been evaluated by “Latio” one of the leading real estate valuation services in Latvia, defining the sales price for the apartments after completing the renovation of the property. As soon as the demo apartment will be finished, the property will be published for sales.
Āgenskalns is a highly-attractive residential area for Riga habitats. Being the oldest residential district in the city, it is attractive for anyone that is looking for a home in a well-developed, hip and contemporary area, yet preserving the old-time architecture charm. Besides, the area is close to the city centre and airport, offering comfortable infrastructure. Sports centres, kindergartens, schools and the nearby Āgenskalns farmer’s market makes the area a social centre of Āgenskalns, where everything is within reach.
We forecast that the future value of the property will increase, as the surrounding neighbourhood is being developed with a new shopping mall “Mellene” (Blueberry), Āgenskalns farmer’s market and another promising residential project right across the street. Only recently, at the beginning of August 2020, the project for the improvement of the Āgenskalns market forecourt was agreed upon. As a result of the project, it is planned to transform the Āgenskalns market forecourt into a pedestrian zone and improve it into a safe, accessible and tidy public space with temporary buildings - small architectural forms: benches, plant boxes, drinking water, parking lots and environmental elements that can be used for both urban sports and urban events.
Besides, in the nearest area, this property is one of the rare masonry buildings, as well as a residential house with a newly installed gas heating system, thus increasing its attraction to those who seek an apartment in this area.
The prices for similar properties in the area varies from 1900 - 2200 EUR/m2 in renovated wooden buildings, allowing predicting quick sales for the offered price.
The loan is intended to refinance the existing loan with a repayment date on 23.08.2020. The sale of the property will provide funds for the repayment of investments and accrued interests to investors.
Due to COVID-19 the construction works in Zeļļu Street project were delayed, and the start date for the apartment reservations was postponed. Taking into consideration that the total expected sales price of the apartments far exceeds the project's financial obligations the loan is refinanced.
Amount of the loan
450 000 EUR
Independent valuation of the property
The future valuation of the property after completed renovation is 1 624 000 EUR.
The borrower is SIA LP Private Property - a company that cooperates with Bulkestate in various projects under the same management team supervision. SIA LP Private Property managers and owners have long-term experience in real estate development and have successfully delivered a number of similar projects.
The company has proven itself to be a reliable partner, capable of fulfilling its obligations, which is also reflected in the previously repaid investment objects on Bulkestate platform.
The loan has a first rank mortgage. As an additional guarantee to investors, the borrower’s company provides a guarantee in the form of the commercial pledge in favour of Bulkestate. The loan will be secured by the guarantee from the owner of the borrower’s company and the property has full insurance for the entire loan term.
Repayment of the investments
The principal amount of the investment and the accrued interest will be paid out in a single payment at the end of the repayment term.