Alternative real estate finance · Spain

Property development finance in Spain

We advise sponsors and investors on Spanish real estate transactions from €3 million. We first test the asset, borrower, budget and exit; then we structure senior debt, bridge finance or preferred equity around the actual cash requirement.

Quick answer

A Spanish development is financeable when the requested capital funds identifiable uses, the sponsor can absorb reasonable overruns and the exit repays the whole facility with headroom. Start by calculating the project's highest cumulative cash deficit. That shows how much senior debt, preferred equity and sponsor cash is required, and when each source must be available.

Before deciding

The questions that change the answer

What is the highest net cash requirement in any month?

Which permit, construction or sales milestone supports cheaper refinancing or repayment?

Which costs, taxes and timing gaps are excluded from the proposed facility?

How much additional liquidity can the sponsor provide if the Spanish timetable moves?

When alternative finance can help

Alternative finance is most useful when the project timetable and a bank's conditions do not match, or when the transaction needs a more tailored capital structure.

Land or asset acquisition before the building permit
Construction before bank presale thresholds are met
Refurbishment, repositioning or change of use
A gap between available senior debt and sponsor equity
Refinancing ahead of sale or stabilisation

What we assess

We review total cost, current and completed value, planning and permits, sales evidence, sponsor experience, invested equity, timing and repayment routes. For overseas sponsors, we also identify the Spanish borrower, security package, local advisers and documents needed to reach credit approval.

How the process works

We prepare one consistent financing case, approach lenders whose mandate fits the transaction, coordinate questions and offers, and negotiate through signing. The purpose is to compare usable proceeds, drawdown mechanics and downside protection on the same basis.

Start with sources and uses

Before discussing leverage, rebuild how much cash the project needs and when. Uses should cover land or acquisition, taxes, works, advisers, permits, marketing, finance, indirect-tax timing and contingency. Sources should distinguish cash already invested, future sponsor equity, debt, permitted buyer receipts and any other reliable inflow.

Total cost through completion or stabilisation
Cash required at the point of maximum need
Costs excluded by the lender
A funded buffer for delay and overrun

Compare offers on usable proceeds

Normalise net day-one cash, future drawdowns, interest, fees, security, amortisation, extensions and conditions. Then calculate how much the sponsor must advance and what happens if Spanish permits, works or sales are delayed.

Compare before deciding

Match the financing structure to the actual constraint

Project stage narrows the options, but current value, cash timing and exit evidence determine the final fit.

Situation	Structure to examine	Decisive evidence
Acquisition before the building permit	Land bridge or conditional acquisition	Planning certainty and time to the next value milestone
Permit granted, bank presales not met	Alternative development facility	Demand, margin, sponsor capital and completion capacity
Gap between senior debt and sponsor cash	Preferred equity	Total cost and the sponsor's retained profit in downside cases
Existing debt approaching maturity	Refinancing or bridge loan	Exact redemption amount and executable exit within the new term
Works advanced but over budget	Completion tranche or recapitalisation	Independently verified cost to complete and net sales proceeds
Completed units awaiting sale	Inventory bridge	Unit liquidity, release prices and debt balance after each sale

Process

From initial review to a Spanish financing closing

A controlled process prevents lenders from pricing a project whose numbers or legal perimeter later change.

STEP 01
Define the exact need
Set out what the money pays for, the amount required on each date, the critical milestones and the fallback if the main plan is delayed.
Output: Funding need and critical-path map
STEP 02
Reconcile the evidence
Match the financial model to title, permits, valuation, contracts, paid invoices, debt, sales and the sponsor's proof of equity.
Output: A consistent lender information pack
STEP 03
Design the structure
Size usable proceeds, drawdowns, maturity, repayment, security, covenants and contingency against a base case and a downside case.
Output: A financeable structure
STEP 04
Run a selective market process
Approach only lenders or investors whose mandate fits the location, asset, stage, amount and timetable, using the same information for each.
Output: Comparable proposals
STEP 05
Complete diligence and documents
Coordinate valuation, technical, legal, tax and KYC work, track conditions and confirm that the signed mechanics deliver the expected cash.
Output: A controlled path to closing and drawdown

Illustrative example · not an offer

Why a €12 million facility may provide only €6 million for the project

Illustrative refinancing and construction example. It is not a financing offer or evidence of market terms.

Committed principal

€12.0m

The headline facility limit.

Existing debt redemption

−€4.6m

Principal, accrued interest, fees and discharge costs at closing.

Interest and fee reserve

−€1.1m

Funded amounts that are not available for construction.

Closing and adviser costs

−€0.3m

Valuation, due diligence, notary, registry and documentation costs.

Cash available for the project

€6.0m

Before testing when each construction draw can actually be made.

Compare the €6.0 million of usable proceeds, its drawdown timing and the sponsor cash that must come first. The €12.0 million headline does not answer any of those questions.

Working tool

Documents for a useful first financing assessment

An international sponsor does not need a perfect data room on day one, but the following information should be current and internally consistent.

Property and permissions

Land registry extract (nota simple) and cadastral reference
Planning status and building permit
Design, areas and unit schedule
Available valuation and relevant comparables

Project economics

Total and paid cost by line item
Monthly works and payment programme
Sales, reservations, deposits and cancellation terms
Base case with timing, cost and value sensitivities

Sponsor and borrower

Spanish borrower and group ownership chart
Beneficial owners, KYC and source of funds
Relevant development track record
Invested equity, existing debt, security and litigation

Before signing

Red flags

They do not automatically make a transaction unfinanceable. They show where information must be reconciled, more headroom is required or the structure needs to change.

01
The request is based on a percentage of completed value rather than complete sources and uses.
02
The permit, completion, sale or refinance is scheduled immediately before maturity.
03
The budget excludes taxes, finance costs, contingency or already committed costs.
04
Areas, dates, revenues or costs differ between the model, valuation, contracts and presentation.
05
No party is clearly responsible for an overrun and the sponsor has no evidenced liquidity reserve.
06
The exit relies on a bank refinance whose own conditions would still not be met.

Method and sources

Prepared from Jubarta's transaction review process and checked against public Spanish and European guidance. Leverage, pricing and conditions remain transaction- and lender-specific.

Public source

Banco de España · Property development loans

Official explanation of staged drawdowns, certified construction progress and interest-only periods in Spanish development lending.

Public source

European Banking Authority · Loan origination and monitoring

European guidance on feasibility, contingencies, projected sales, project timetables and monitoring of real estate lending.

Apply it to your transaction

A useful first answer starts with specific numbers and dates.

Share the location, stage, total cost, existing debt, invested equity, financing need and expected exit. We will assess fit before opening a process.

Frequently asked questions

Clear answers before you start

What is Jubarta's minimum financing amount?

We advise on financing requirements from €3 million. The final fit depends on the asset, location, project stage, sponsor and repayment plan.

Does alternative finance always replace a bank?

No. It can bridge a phase that a bank cannot yet fund, complement senior debt or provide the full facility. A later bank refinance may form part of the exit, but it must be tested against realistic conditions and timing.

Can an overseas sponsor borrow for a project in Spain?

Potentially, yes. Lenders will still need a clear Spanish ownership and borrower structure, local legal and tax advice, evidence of source of funds, relevant delivery experience and an enforceable security package.

Will the transaction be sent to every lender?

No. A selective process protects confidentiality and focuses effort on lenders whose mandate matches the asset, amount, stage and timetable.

What local advisers does an international sponsor need?

The exact team depends on the transaction, but Spanish legal, tax, valuation and technical input is commonly required. Appointing the right advisers early reduces duplicated work.

What information is enough for an initial no-go decision?

Use of funds, location, stage, total cost, current value, existing debt, invested equity and proposed exit usually reveal the main obstacles. An early negative answer can save weeks of work.

Do Spanish lenders accept an English data room?

Many investment teams work in English, but title, permits, security and key contracts will be Spanish documents. Agree early which summaries or translations are needed for credit and legal review.

Is €3 million the minimum project cost or the minimum finance requirement?

Jubarta's minimum is a financing requirement of €3 million, rather than the total development cost.