Introduction
Albania is next-door to Montenegro and benefits from the same dramatic Adriatic coastline. Illyria Resort and Spa is situated in Lalezit Bay, a wide crescent-shaped sweep of white sands and blue seas. The bay is just 30km from the capital Tirana and a new road currently under construction will cut the journey time of 1.5 hours to just 30 minutes. As the closest beach to the capital and with such a short transfer time from the country’s only international airport, Illyria Resort and Spa could realistically see rental demand from both business travellers and tourists alike.
We are offering just 34 units within this development at the pre-offplan price of €645 per m2.
Many of you have invested in pre-offplan deals with us before. For those who haven’t, it is where we sell properties at just above cost price in order to raise finance for the development. Investor monies will be used as seed finance. The developer accepts a reduction in his end profit in return for receiving 100% of the price upfront, and you receive a hefty discount, adding equity from the start.
The developer plans to build a mixed-use residential and commercial project consisting of circa 240 units, with properties staggered up the hillside to make the most of the sea views and to offer added privacy. Facilities planned for the Illyria Resort and Spa development include a large pool, landscaped gardens, spa and treatment centre.
As demand for our previous deal was so high, we will be taking reservations on a first-come basis. Investors who send in their £2,500 reservation fee first will be given priority choice of the available units. We will need to receive 100% of the price within 14 days of the contract so you will need to move quickly to secure these incredibly low-priced properties.
In Albania, the cost of build (land plus construction) is around €540 per m2. This figure compares favourably to cost of build in neighbouring Montenegro which is around €1,500 - €2,000 per m2. You may ask why the developer at Illyria Resort and Spa is prepared to sell his first 34 units at the low pre-offplan price of just €645 per m2, just a small amount above his cost price.
In countries such as Albania, where finance can be difficult to obtain, a developer will look at how much return he makes, euro on euro, in relation to the amount of money he has to tie up in a project. By selling a proportion of the development at virtually cost price, with a bit of ‘buffer’ room built in, the developer can raise the money required to purchase the land and kick-start the approval of build licences quickly. This diminishes the amount of his own capital he must put into the deal and therefore his return on capital (euro on euro) increases.
This is great news for you. It means you can purchase a unit at close to the cost of build. And by selling it on at market price, you could make a similar profit on the property as a developer normally would.
Purchase security
The purpose of these early pre-offplan sales is to provide additional seed capital for the developer to commence the project and go through planning. Having paid 100% of the purchase price of your property, your capital will be secured by a charge over the development land. This means that if anything was to go wrong and the development land had to be sold, monies generated by its sale would be used to pay you back.
Rental security
The developer is offering a three year, 8% per annum gross rental guarantee. The development will be marketed intensely over this period, but as with any new resort, it may not achieve maximum occupancy levels from day one.
The rental guarantee protects you by providing income during the ‘bedding down’ period and, as further security, the developer will set aside sufficient funds to top-up the guarantee, should the project fail to deliver necessary income.