Los Pandos Site Visit
Los Pandos ('the Spring') is a 2,000-acre plot on the Costa Blanca, about 50 miles inland from Alicante.
Currently at Los Pandos there is an established, working vineyard and some of the land is still being farmed. There are hundreds of sheep grazing and the smell of the olive and almond trees that permeate the green fields and vines, fill the air at most stops on our tour around the comprehensive site.
Standing at the highest point of the estate, we could look out over the land where Martin & Clews plan to develop a new vineyard and the new wineries. You can see down the valley to where the three hotels will be located and where the natural flow of the estate will give way for the two proposed golf courses, three 'eco-villages' with a total of 600 houses, leisure facilities and a commercial estate.
The whole development will work on 'green' principles: commercial and residential buildings will be topped with green roofs and much of the energy needed will be generated on site. The name of the site reflects the fact that there is a plentiful supply of underground water reserves which will be exploited judiciously.
Los Pandos fits naturally into the current structure plan for its region, Castilla la Mancha, and it's expected that the next stage of planning will be completed before the municipal elections in May 2011.
Also significant to the success is the new high-speed railway which is currently being built, which will link Valencia and Madrid to the rest of Europe. This train line passes through Los Pandos and the commercial section of the development includes a goods and services terminal. With the coast half an hour away and busy cities like Madrid less than 2 hours from the site, the location of the Logistics Platform couldn't be better and gives the site a great draw for many business sectors.
Taken around by two of the senior figures in Martin & Clews, they told me that they do not want one bank to have exclusivity in this development - as they put it - they didn't want their horse to be redesigned as a camel. Hence, the opportunities for small investors like me to get involved with a project of this scale, alongside some bigger investors.
These big investors include the architects, Fundacion Metropoli, who have taken a 15% share in Los Pandos, such is their belief in the site. Martin & Clews aim to raise capital for the infrastructure of the development, up to a maximum of 180 million euros.
Construction companies Dragados and FCC will invest in the buildings, alongside mortgage finance raised for individual purchasers of houses in the three eco villages.
There's not much to see on the ground at the moment but Eduardo & Mike and their able team are clearly committed to making this work.
If it all goes pear-shaped, the total investment is more than covered by the value of the land, and lenders will receive parcels of the land which they can sell to recover their investment.
How does this work - should the company default in respect of repaying back my investment, it is the Notary in Spain, with whom the debt is officially registered, who is responsible for selling the land for just the amount required to repay the debt (which is no more than 30% of the current land value) rather than the open market value. The investor is not faced with the onerous task of having to prove his claim through the Spanish courts - he merely presents the Power Deed which proves his entitlement.
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