Full commercial building, 270 m² on 313 m² of central urban land

A full commercial building on 313 m² of urban-classified land in the centre of Torrevieja — two storeys above grade, 270 m² built, single-owner title, no horizontal division. The kind of asset that rarely changes hands in this part of town, which is most of the reason it is on this shortlist.

The building dates to 1949 and currently presents as a ground-floor retail unit with a serviceable upper level. The asking price reflects the asset as it stands today; the investment thesis is the upside that the urban-land status and central footprint unlock. Below — three repositioning paths, each underwritten separately.

Scenario 1 — Retail ground floor + upper-level conversion

Keep the ground-floor frontage in retail use and convert the upper level into offices, professional services or small-format storage. This is the lowest-capex path and the fastest to income. On current Torrevieja-centre commercial rents:

• Combined monthly rent: €6,000 – €9,000 depending on tenant mix and upper-floor finish level.
• Annual rent: €72,000 – €108,000.
• Gross yield on the €1.55 M asking: 4.5 % – 7 %.
• Operating costs (IBI ~€3,000 on commercial cadastral, building insurance, 6 % asset management, 5 % vacancy reserve, 0.5 % maintenance reserve): ≈ €18,000 – €26,000 / year.
• Net rental (pre-tax) ≈ €54,000 – €82,000 / year → ≈ 3.5 % – 5.3 % net yield. After 25 % corporate tax (held via Spanish SL) or marginal IRPF (personal name), expect roughly 2.6 % – 4.0 % post-tax, depending on structure.

We model the renovation budget and the structuring choice (personal vs. SL) inside the full memo, since both depend on the tenant covenants you intend to underwrite. Indicative fit-out for a ground-floor retail refresh + upper-floor office conversion: €80,000 – €140,000, recovered in 18–24 months of stabilised rent.

Scenario 2 — Full repositioning under the Torrevieja PGOU

The 313 m² plot sits inside the centre of town, where Torrevieja's master plan (PGOU) permits a denser footprint than the current 1949 building uses. Two possibilities we have looked at:

• Boutique residential — small-format units oriented to the short-stay and long-stay rental market that drives the rest of our investment book.
• Mixed commercial-residential promotion — retail on the ground floor, two or three residential floors above, capital-appreciation play on the developed surface.

The repositioning case sits in a different return bucket from Scenario 1 — IRR-driven rather than yield-driven, and dependent on a PGOU-compliant project that we would commission alongside you. It is not a path we recommend on a 12-month horizon; on a 3- to 5-year horizon it is the path that monetises the urban land most fully.

A first-pass underwriting on the boutique-residential route, assuming ~800 m² of saleable build under the parcel’s permitted ratio:

• All-in cost basis (acquisition + ITP + demolition + construction at €1,200 / m² + soft costs): ≈ €2.8 – €2.95 M.
• Exit at €3,500 / m² → ≈ €2.8 M gross (breakeven). At €4,000 / m² → ≈ €3.2 M (~€350 k gain). At €4,500 / m² (the top of the central-Torrevieja new-build band) → ≈ €3.6 M (~€750 k gain).
• Projected IRR ≈ 8 % – 15 % over a 3-4 year cycle — exit-dependent, leverage-sensitive. We stress-test against a 10 % construction-cost overrun and a flat-exit scenario in the full memo.

Scenario 3 — Long-term central-core hold

The simplest version of the thesis. Central-Torrevieja full-building lots of this scale are structurally scarce — older owners, generational holds, very limited turnover. Buying the asset and waiting is a real strategy on this kind of stock, and the carry cost is the property tax plus minimal upkeep on the existing structure.

On Scenario 3 we treat the rental income as optional — conservative underwriting holds it at €0 and rests the case on land appreciation. Most institutional buyers do exactly this.

The land-banking case rests on observable history: central- Torrevieja urban land has compounded at roughly 3 % – 5 % per year across the last two cycles, with the upper end reached during periods of strong northern-European demand. Annual carry (IBI ~€3,000, insurance, minimal upkeep) is ≈ €6,000 / year — call it 40 basis points against the asset value. Over a five-year hold, conservatively underwritten:

• Asset value at 3 % p.a. compounded → ≈ €1.79 M (≈ €240 k gross gain).
• Asset value at 5 % p.a. compounded → ≈ €1.98 M (≈ €430 k gross gain).
• Annualised return after carry, before exit costs: ≈ 2.6 % – 4.6 %.

What is and is not in the price

The €1.55 M is for the asset as it stands today, vacant. The purchase carries the standard Spanish closing costs (ITP 10 % in the Valencian Community, notary, registry, due diligence, fiscal structuring) — call it roughly €170,000 on top of the asking on this size of file. The investment scenarios above are underwritten net of these acquisition costs in the full memo.

What is not in the price is the development architect's project, the construction budget for Scenarios 1 or 2, or any fit-out for the eventual tenants. Each of these becomes a line in the underwriting once you tell us which scenario you are pursuing.

How we run a file of this size

A €1.55 M acquisition is large enough that the discovery call is followed by a written engagement letter before we open any confidential documentation. Under that engagement we run the cadastral and registry audit, pull the PGOU file from the town hall for the parcel, model the three scenarios with current rents and capex numbers, and produce the buy/no-buy memo. The memo is yours regardless of whether you proceed.

The same workflow then handles the legal and fiscal side of the acquisition — Sarah Katerina on the structure, VITA Host on the eventual leasing once the asset is operating. One coordinated file from term sheet to first invoice.