With this blog post, we will keep you updated on the latest news of our Seven Heaven development project.
Key Facts About Seven Heaven Development Project:
- Category – Development project;
- Collateral – Owned by our SPV, secured with a mortgage;
- Country – Latvia;
- Payment frequency – Interests every 6 months.
The land plot in the city center of Riga, Latvia was acquired last year with a huge discount. According to the detailed planning and construction permits, it is possible to build 3 separate building on the plot. This is huge development projects, that has a potential for huge profit as well, but it requires big budget and well executed plan. While the initial plan was to start with the construction works immediately after acquiring the land plot, the start of the construction works was postponed due to high cost of construction materials this project requires. The costs of these construction materials have decreased severely over the past year, and we have also changed the management of our Latvian branch, bringing in more expertise to execute this size development plan.
We are delighted to announce the continuation of our development of the Seven Heaven project, an exciting investment opportunity which aims to construct a modern and thriving residential complex in the heart of Riga, tailored to meet the current market demands. Our project has made progress in the preparation phase, and with your support, we are eager to embark on the journey of turning this vision into a reality.
The groundwork for the project has been laid out. Preparation works, including site cleaning and waste disposal, are successfully completed, providing a clear and ready-to-develop land plot. Additionally, we made and continue to make significant efforts to update and revise project documentation, and to start with, the zero-cycle (construction stage 1 of the project) project documentation to align it with current market needs, ensuring the project’s viability and competitiveness.
We have conducted and continue to receive offers for various parts of zero-cycle works, ensuring the engagement of skilled and reputable contractors for the execution of the project. To foster transparency, retain control of the process and decrease the construction cost, we will implement an open-book approach for the zero-cycle (construction stage 1 of the project).
Planned Development Works and Funding Needs
The primary focus of the first construction stage of development is to erect the zero-cycle for the whole project, which includes the construction pile field, the foundation, underground floor works and underground parking for up to 50 parking places. To achieve this, the project will require funding of approximately 1.5 million EUR, which also includes various costs associated with construction, permits, running the site and other operational expenses. Additionally, the existing funding will be refunded and prolonged until the end of the development project, totalling our investment into the first construction stage and along with all costs of up to 2.5 mill EUR by summer 2024.
To ensure an efficient and well-managed funding process, we have structured the financing into multiple tranches of 200,000 EUR each. This approach facilitates a systematic allocation of resources, minimizing financial risks and ensuring steady progress throughout the project.
We plan to commence construction work in August 2023, embarking on the first stage of development. Our dedicated team is aiming to complete the zero-cycle works and the parking facility by summer 2024. However, it’s important to note that the timely execution of the project is based on the timely availability of funds and the unwavering support of our valued investors. It is important to receive investor support throughout this process.
Visuals and Site Progress
We understand the significance of providing investors with a clear picture of the current situation on the plot. We are actively working on compiling images and visual representations of the site’s current condition. These visuals will offer a compelling insight into the project’s potential and underscore our commitment to transparency and accountability. We aim to ensure that video access to the site is provided to the investors in real-time starting at the end of August 2023. The team is now working to update the residential plans to correspond to current market conditions. After which, the selling site will have been developed as soon as possible to ensure enough pre-reservations until the start of construction of the residential buildings (in 2024).
Decreased Project Management Risks
We are pleased to inform our investors that we have taken proactive steps to decrease our reliance on KIRSAN. The management of the project’s SPV company underwent a substantial change, bringing in a team of experienced leaders. This change significantly reduced the outside risks, providing greater stability and security to the project. At the moment, Seven Heaven project is ready to be fully developed without any serious dependency on KIRSAN.
To enhance confidence of our dear investors, we meticulously addressed various aspects of the project:
Experienced and Dedicated Team: Our team comprises several professionals with a proven track record in executing similar ventures, covering project management and finance.
Market Demand: The project is being redesigned to align with current market demand, ensuring that it caters to potential customers’ preferences, driving profitability. The team is engaged in updating the residential plans. Once completed, the selling site will be swiftly developed to secure ample pre-reservations before the commencement of residential building construction, scheduled for 2024.
Transparent Approach: Open-book construction estimate approach adopted for the first construction stage, which should decrease the costs of the projects and enable full control of construction risks.
Risk Mitigation: situation with the previous contractor mitigated upon start of this process, whereby the project company will aim to control most of the construction process in hand.
With the decreased risks related to process management, and a dedicated team, we are confident in the project’s ability to deliver exceptional returns for our investors. We invite you to join us in this journey, where your support will not only make the future of this urban development possible but also secure substantial rewards for all investors involved. Together, we can make this project a shining success in the world of real estate investments.