Executive Summary

Investors have the opportunity to invest at an early stage in The Lake Home, a premium residential complex, by financing the construction of this project through a senior construction loan. The beneficiary of the project is requesting a loan with a total value of 100,000 EUR for a period of 24 months, with an annual interest rate of 13.00%. Interests are paid every 6 months and the principal reimbursed at the end. These funds will be used to finance the construction of the buildings.

The Project

The Lake Home is a premium residential complex that spans over a vast area of 53,000 square meters, located in Sibiu, Romania, right next to Binder's Lake. The architectural design is consistent throughout the complex, boasting a New York-style aesthetic that is sure to captivate its residents. The design exudes elegance with its visible mineral brickwork, metal-framed balconies, and concrete slabs.

The shareholders of Novarion, the developer of this residential complex, have shown their confidence in the project by planning to move into the neighborhood themselves. This is a testament to the quality and promise of what is being built in "The Lake Home". The members of this new community will feel respected and secure, benefiting from security, cleanliness, and importantly, an internal order regulation - known as the "good manners regulation".

What sets this housing neighborhood apart from other similar projects in Sibiu is that it will be managed by the developer even after the completion of the construction, for a period of 25 years. Essentially, the buyer is not just purchasing a home, but a lifestyle based on comfort, a way of living, and a unique neighborhood experience. In other words, we offer safety, trust, and exceptional neighbors as part of the package.

The project is comprised of three development stages and consists of over 10 residential buildings with a total of 494 apartments, an aparthotel, commercial spaces (cafes, shops, medical offices) on Tractorului Street, a spa with a swimming pool and gym, three restaurants, and recreational areas around the lake, along with 29 luxury villas. The first building is already finalized, fully sold, and currently inhabited, which has brought us great joy, following the positive feedback from our small community.

This ensemble offers quick access to the A1 highway, the airport, and the city center.

Location

The western area of Sibiu, a city steeped in history and nestled in the heart of Transylvania, Romania, is undergoing a transformative residential project. This project, aptly named "The Lake Home," is situated on the shores of Lake Binder, the city's only lake, which has recently been redeveloped by the Sibiu City Hall. The area is set to welcome Sibiu's first artificial beach, adding to its appeal.

The Lake Home is strategically located, offering residents quick access to the future regional Sibiu County hospital, a state-of-the-art facility with an estimated investment of over EUR 500 million. The hospital, which will be fully digitalized, is part of the area's robust infrastructure, which includes the A1 highway, connecting Sibiu with Bucharest, Transylvania, Banat, and Crisana historical regions, and the rest of Europe.

Residents will also enjoy proximity to leisure facilities such as the Prima Shopping Center and Promenada Mall, and fast connections to Sibiu International Airport and the West Industrial Area. The economic and historic center is just 1.5 km away, making it an ideal location for those seeking a balance of modern convenience and historical charm.

Sibiu, also known as Hermannstadt, is home to approximately 170,000 residents within the city council and about 450,000 in the county. The city is renowned for its Germanic architecture, a legacy of the 12th-century Saxon settlers, and its medieval walls and towers that surround the city. The Brukenthal National Museum, housed in the Brukenthal Palace, showcases European paintings and is a testament to the city's rich cultural heritage.

Known as "The City with Eyes" due to its iconic houses with eye-like windows, Sibiu is a popular tourist destination. Its culture, history, gastronomy, and diverse architecture have attracted significant attention since the beginning of the 21st century. The city's historical center is in the process of becoming a UNESCO World Heritage site, and Sibiu was designated the European Capital of Culture in 2007. Its famous Christmas market is another draw, making Sibiu a city that truly offers something for everyone.

The Market

Over the past year, Romania's residential market has seen a significant increase in supply across all major cities, with growth margins often reaching double digits.

However, the defensive measures applied by the National Bank of Romania to keep the inflation rate under control are expected to temper the Romanian real estate market by the end of 2022. This is expected to bring a certain moderation of activity in the residential real estate segment. In fact, investment activity in this sector has slowed starting February 2022.

The number of residential projects developed has decreased in recent months, but real estate developers have focused primarily on niche segments, such as premium properties or residential projects located in easily accessible areas with high demand for residential real estate.

As of 2023, the Romanian real estate market has shown resilience, with the total investment volume exceeding the historical milestone of EUR 1.0 billion by more than 25% in 2022. The first quarter of 2023 ended with a total value of investment transactions worth EUR 120 million in Romania, almost double year-on-year, with industrial and logistics sectors leading the growth.

However, the outlook for the rest of 2023 is less optimistic as tighter financial and credit conditions may weigh on activity. The Romanian economy is projected to increase by 2.9% in 2023, which should support continued foreign investment. Despite the slowdown, the real estate market in Romania still has enough resources to continue developing in 2023, thanks to a 3-4% expansion rate for the local economy, which is achievable even in the current context.

Competition

Over the past year, the average price per square meter in Romania has seen an increase. Generally, the average transaction prices for apartments in Sibiu range from EUR 1,300 to EUR 1,500 per square meter. Specifically, the average prices for units that share similar characteristics with the analyzed project, in the respective area, range from EUR 1,800 per square meter up to EUR 2,000 per square meter.

In 2023, the real estate market in Sibiu has become increasingly competitive, with numerous residential projects making their way into the market. However, the project "The Lake Home" stands out due to its superior quality finishes, excellent location, and attention to detail. Compared to other residential projects in the area, "The Lake Home" offers a perfect balance between price and quality, positioning itself as an attractive option for potential buyers.

Despite the increase in prices per square meter, the demand for residential properties in Sibiu remains strong, indicating that the market is still healthy and dynamic. With a wide range of options available for buyers, from apartments to houses and villas, Sibiu continues to be an attractive destination for real estate investments. In this context, "The Lake Home" stands out as a premium option, offering a quality lifestyle in a unique location.

Developer

Novarion, under the leadership of Mr. Raul Tarnaru, is a renowned construction company with nearly two decades of experience in the real estate industry. The company specializes in building and restoring a variety of properties, including residential, commercial, and industrial hall developments. One of their notable projects is "The Lake Home," of which the first phase has already been completed.

In addition to their current projects, Novarion has plans for future developments. They own several land plots in residential areas of Sibiu, where they intend to construct another neighborhood following the completion of "The Lake Home."

Novarion's portfolio also includes the successful development of "The River Chalet Hotel", a boutique hotel in Sibiu, and two industrial halls in Talmaciu, near Sibiu, which are used for rental services.

The project owner declares that, to the best of their knowledge, no information has been omitted or is materially misleading or inaccurate. The project owner is responsible for the preparation of the key investment information sheet (see Documents).