Helme Hooldekodu (VI)
Mortgage secured construction loan
- Start of investment period02.06.2021
- Start time28.05.2021 11:00
- Asset classHealthcare
- Investment typeDevelopment
- Investment end date10.12.2021
- Remaining term4 months
- Expected rate of return11.5% p.a.
- Expected cash yield%
- No of investors213
- Goal€85 000
Crowdestate investors have financed the construction of a new Helme retirement home in amount of 800,000 euros. The construction has been completed and the building is awaiting a permit of use, which is expected to be issued in the first half of June. After the permit is issued, first residents will move in. With the current campaign the Sponsor offers an opportunity to finance the cost of additional works in the amount of 85,000 euros. In addition to what was originally planned, the Sponsor has decided to complete the asphalting of sidewalks and squares around the building and to carry out works due to the changed standards for retirement homes (eg. security and safety systems). The attached photos are as at May 25, 2021.
Investors will grant a loan to JIB Consult OÜ (owner of Kooli St. 1 property where new retirement home is located). The loan is secured by a 2nd mortgage on Kooli St. 1 property, a guarantee from AS Helme Pansionaat (the operator of 75-bed retirement home) and a personal surety of the Sponsor's key person Sven Allas. The 1st mortgage on Kooli St. 1 property secures Crowdestate investors' loans of previous five funding rounds in the total amount of 800,000 euros.
Investment period is 6 months i.e. the same term as for loans granted in the previous five rounds. The Sponsor has an option to extend the period twice by six months. Loan interest rate is 11.5% on an annual basis (interest 13% after the first extension and 14% after the second). First interest payment is due in December 2021.
The Sponsor has been providing retirement home services since 2014. To meet increased demand, the Sponsor bought a neighboring building and rebuilt it into a retirement home, which is planned to be filled with 100 beds during 2021. The maximum number of beds in the building is 160. The construction cost of the project without additional works was 1.16 million euros, of which 150,000 euros was covered by the PRIA fund (non-refundable grant from Agricultural Registers and Information Board), 210,000 euros is the Sponsor's own contribution and 800,000 euros from Crowdestate investors. More information about last funding campaign can be found here.
Helme retirement home is located in Helme borough, Valga County, approx. 2 km from city of Tõrva. It is a beautiful place next to Helme primeval valley and manor park.
After the permit of use, 60 people will first move in. Of these, 35 people come over after the closure of the retirement department of Tõrva Hospital and 25 people who are in queue for retirement services.
Crowdestate investors' loan will be repaid by refinancing with a long-term bank loan. The Sponsor's current 75-bed retirement home has been financed by Swedbank, which has also expressed its willingness to refinance the construction loan after obtaining of the permit of use and when retirement home is operational.