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Renovation of dwelling house in the heart of Riga
100% Funded

100%
Need:0.00€
Interest rate:21%
Period:12 months
Target: 730 000€
Opens: 2019/06/10
Expires: 2019/07/12
Type: Real Estate
Location: Riga, Latvia
Investors: 1258

Summary


Current investment opportunity offers CROWDESTOR investors to make a secured loan to Developer of project Dzirnavu Apartments. The facility is located 7 minutes walking from the Old Town of Riga, in neighborhood called Moscow’s forshstate which is great for Airbnb tourists and locals, because of its great location right in the centre of the city, in the Riverside of Daugava with access to public transport.
Following the increasing demand for small apartments, the Project mainly consists from apartments in a range from 25m2 to 45 m2. Total number of apartments in the Project is 26.
Current investment opportunity offers CROWDESTOR investors to make a loan with 21,00% annual interest rate.
Minimum target to be raised in CROWDESTOR platform is EUR 500 000,00 and the maximum target is EUR 730 000.00.
Project is managed and owned by sister company of CROWDESTOR OU – SIA CR 3, an SPV registered for investment management.
 

Loan

Minimum target: EUR 500'000
Maximum target: EUR 730'000
Loan term: 12 months.
Interest rate: 21 % per annum.
Type: Cash Flow
Interest payments: paid monthly after the first 6 months (For first 6 month interest payments are capitalized and paid in bullet payment together with the Loan principal payment).
Loan repayment: In full at the end of the Loan Term.
Crowdestor BuyBack fund: Yes
Collateral: The loan is secured by a guarantee of the borrower company and first-hand pledge on real estate (Dzirnavu iela 136/138, Riga).
 
Remember - interest rate payments start calculating from the day you make your investment!
 

The Project

Project: Dzirnavu Apartments
Object:Three historical style buildings with 26 apartments
Funds raised in fundraising phase 1: 500 000 EUR to 730 000 EUR
Total investments: 1 193 000 EUR which consists of:
390 000 EUR – real estate acquisition
793 000 EUR – renovation costs
50 000 EUR – fee of Land Register, reserve, other expenses
-40 000 EUR - compensation received from Municipality of Riga for renovation of historical facades of the buildings
Address of the property: Riga, Dzirnavu iela 136, 136A and 138.
Cadaster No. of the property: 0100 041 0063
Land plot: 819 m2
Building, total area: Residential buildings (01000410063004, 01000410063003 and 01000410063001) with total area of 1017 m2.
Current type of use: Three residential buildings on a minor area land plot. The property is partially used as intended for such type of property – smaller rental apartments. A number of the apartments are not usable without additional investments in the restoration of the decorative finish and replacement of the utility equipment.
Best type of use: Three renovated multi-apartment residential buildings are great for Airbnb tourists and locals, because of it's great location near the city centre.
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Location


The neighborhood is located on the right coast of Riga and borders with Daugava coast, the Southern Bridge, the Railway along Satekles and Lomonosov Street and old city Riga. In general, there is a wide range of small shops, cafes, children's square as well. as a place for various entertainment and recreational events (summer concerts, cinema evenings, flea market). Recently, the waterfront promenade has been restored, and there are cycling sites near the river of Daugava.

There are more important constructions on Moscow’s forshstate like central market and the bus terminal. The site is located close to the central part of the city of Riga - at the beginning of Moscow’s. forshstate. The parcel is located in a block between the streets of Dzirnavu, Moscow, Jesus church and Ellie streets. The quality of the surrounding building is varied: the residential buildings of small-scale wood structures with partial amenities, built at the end of the 19th century and at the beginning of the 20th century, intersected with the 4-5-story walled dwellings built at the beginning of the 20th century. Building and neighborhood cleaning work in this part of the city is gradually being carried out, but still a large majority of buildings are physically out of date with a level of comfort that does not meet today's requirements. A building – Dzirnavu Street 140, which is scheduled to be put into service in October 2019, is located in the immediate vicinity of the site under assessment. The premises are offered to offices, catering company, medical services, training center, fitness club etc. Just recently, the Baltic Investment Group has purchased former horse tram depo buildings located in Riga, Dzirnavu Street 128. The rooms have been abandoned and dilapidated. The developer plans to build an office and commercial premises in the buildings, as well as to set up a café. On the second floor, where the offices are located, a closed gallery will be constructed to connect the two bodies. The reconstruction project is currently at the conciliation stage. Scandinavian real estate developer Bonava Latvija has started construction of the “Coast Quarter” on Moscow Street 192, near the historic Shore block, next to the recreation center “LIDO”. Six new residential houses are planned to be built by 2022, which will create homes for more than 1,200 people. This is the first big new project in this neighborhood, and it is likely that other developers will follow and start looking at the neighborhood from other perspective.

The surroundings are relatively thinly greened, the nearest park – the Quiet and Peace Gardens – are located about 1.2 km from the site, or 15-minute walks. Most local infrastructure building sites are also located in the Moscow forshtate section – Latgale suburb Executive Directorate, medical and educational institutions, Transport and Communications Institute, LU Faculty of Social Sciences.
The site is located near Dzirnavu Street, near Moscow Street. In conclusion the location of the valuated facility is close to the central part of Riga which is considered to be good but given the current low prestige of Moscow's forshtate in the real estate market, the area is not popular yet among potential buyers.

 

Characteristics of the market situation


In 2018, around 1 700 apartment sales deals were held in downtown Riga for new projects, or residential buildings that were built or renovated between 2000 and 2018. Half of the transactions took place in new buildings built between 2011 and 2018 and 30% of the transactions took place in buildings built between 2000 and 2010, the remaining 20% are renovated buildings. This share of business activity is explained by the relatively limited supply on the renovated pre-war residential market. At the same time, it should be noted that, according to Latio data, the market will significantly increase the number of transactions in renovated projects in 2019, since the purchase of several buildings in 2018 aimed at reconstructing and selling the buildings through apartments. The houses renovated in 2000-2010 were the least sold. The trend in recent years also shows that activity in this segment is declining. On the other hand, the number of transactions in buildings built or renovated during the period 2011-2018 has increased strongly in recent years. One of the reasons for such a number of transactions is that the buyer is willing to pay a higher transaction amount for the purchase of quality-renovated housing if it is purchased as a long-term purchase rather than for speculative purposes. Another factor influencing the number of transactions is also the possibility of renting out apartments on a temporary and long-term basis, thus creating additional sources of income and provision. Sales data show that apartments in new projects are purchased relatively rarely for speculative purposes. At the sametime, it should be noted that there is currently high demand for quality apartments, and thanks to the rapid growth in purchasing power, the market is active in this segment.
The number of transactions in downtown Riga and Skansta reached 35% of the total number of transactions in 2018. Most of the renovated pre-war buildings are located in the centre of Riga, with which 80% of the transactions in this segment took place in the areas of Riga Centre and Skanstes. The most active areas of Riga, where apartments were sold in new buildings built in 2011-2018, were the so-called remote centre (21%  of all transactions), Teika (15%), Imanta (9%) and Centre (7%). Since the total number of transactions is not high, each new project that was put into service in 2018 has a significant impact on this division. In the distant centre, the largest number of transactions is the Veseta Streetproject, project M22 and Backstage, project Magdalene Quarter, project in Teika – project New Teika, Imantaa – project Imanta Oaks and Dammes liepas.
The new projects, unlike serial apartments, have a significant price range of 1 m2, depending on both location and the year of construction, quality and number of apartments. This factor is influenced by the calculation of the average price for new projects and the comparison at the time does not represent a clearly interpretable market situation. The calculation of the average selling price of Latio takes into account all the factors mentioned above, as well as the fact that the registered purchase amount may not correspond to the actual purchase fee.
In 2018, average prices for apartments in renovated houses in Riga’s suburbs were 1 460 EUR/m2, 6% lower compared to 2017 (in 2017 prices had increased by 6%). In downtown Riga, apartment prices do not change significantly, but there is a reduction of around 5-6%. In 2018, the average price was EUR 2 030/m2, in 2017 it was EUR 2 150/m2, while in 2016 it was EUR 2 140/m2. In 2018, a relatively large number of apartments were sold in projects Peace Residence, Painter Street 1,Sapiers Street 3B, where the average price was below EUR 2 000/m2, which reduced the average price. The largest number of transactions in renovated houses in downtown Riga in 2018 took place within the following price limits: 1 450 – 2 100 EUR/m2.
Over the past year, the neighborhoods of Grīziņkalna and Ziedoņdārza, aswell as the end of A. Chuck Street, have become increasingly popular. This was boosted by revitalization measures in these areas that have been taken over the past 4 years. The Grīziņkalna and Ziedoņdārza park has been restored and a new Kr. baron has been constructed. Kr. Baron street Sports & Kids Square. A lot of developers see the site as attractive for investing. There are currently three renovated building properties in the Far Central, where the sale of apartments is rapidly taking place or already took place: Tallinn Street 86, Painter Street 11 k-1 and k-2 and “The Republic of Grīziņkalns” - John Asram Street 12. Average registered sales prices shall be between EUR 1700 and EUR 2000 per m2.
In general, apartment areas in new and renovated projects tend to fall, regardless of whether the project is located in the city centre or in another area. On the left coast of Daugava, apartments are raised larger than on the right left coast, as families with children choose this area more. The right shore is more attractive for young specialists who choose to live closer to or near the city center, so apartments are more compact.
A gradual improvement of the site is observed in the city of Riga, a Moscow forshstate where most of the buildings are cultural and historical monuments, wooden structures, which have not been assembled for long years and require substantial cash investments to be restored. The block where the site is valued is close to the market and could say that the social environment of an existing block frightens potential buyers into housing here. On the day of the assessment, there are two renovated and one newly built multi-apartment house in the Moscow’s suburb, with apartments trading: Catholic Street 9 k-1, Dzirnavu Street157 and Kraslava Street 14. Average sales prices have been registered between EUR 1500 and EUR 1700 per km, which is about 15% lower thanin the case of Grīziņkalns. Kraslava Street is a building built in 2007, with 4 commercial spaces on the first floor of the building and 26 apartments on the parking floors, with areas ranging from 45.3 m ² to 118,5 m ². Sales of the apartments were launched in April 2017 and completed in October 2018 (1.5 years). All 26 apartments have been sold for the current moment, with average sales prices for apartments with full finishing ranging from EUR 1400 to EUR 2000 per 1 m2. Catholic Street 9k-1 is a former rental house that gradually sells out apartments, now out of 30 apartments. Only 6 apartment transactions are registered in the Land Register. Sold apartments have an area between 20 and 45 m2. Sales prices for apartments with full finishing and furnishings are recorded between EUR 1500 and EUR 1650 per m2. On the assessment date, the public internet portals have Catholic Street 9 k-1 in 9apartments, between 30 and 59 Km, offers at prices between 1500 and 1646 EUR per 1 m2.
 

In annex:

 

  • Information about The Object.


 

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