Azora, CBRE GIP & Madison Create a Fund with €750M & 6,500 Homes

10 September 2018 – Expansión

The real estate companies Azora, CBRE GIP and Madison have constituted a joint venture for residential rental properties in Spain. They have created it with 6,458 homes and €750 million in own funds in order to expand the portfolio to 10,000 homes over the next two or three years.

In a statement, the three companies have announced the joint venture agreement, with an initial asset value of €870 million. The fund’s 6,458 homes are located in 65 buildings and 70% of them are located in the metropolitan area of Madrid.

Azora’s new subsidiary for residential rental has emerged from the recapitalisation of another previous one, Lazora. The investment and integral management of the new fund will be borne by Azora, which has also acquired a minority stake in the entity.

The Director for Continental Europe at CBRE Global Investment Partners, Alexander van Riel, said that “the residential market in Spain is very fragmented, and so this portfolio and its size are unique in that it acts as an important consolidator in the sector”.

“This investment increases CBRE GIP’s exposure to the residential sector in Europe to more than €2.5 billion and is in line with our key strategy: to follow demographic and real estate development trends in markets with a scarcity of products”, added Van Riel.

Meanwhile, the co-head of the securities portfolio at Madison International Realty, Derek Jacobson, said that the investment “represents a unique opportunity to acquire a large-scale and high-quality residential portfolio located primarily in the Spanish capital”.

The head of the residential area at Azora, Javier Rodríguez-Heredia, said that the intention is to hold onto the 6,458-rental unit portfolio for 15 years.

“Rather than opting for the liquidation and sale of these units, through this strategic association with CBRE GIP and Madison, we have not only found a way of ensuring that these homes remain available for families, we are also going to increase the investment in the rental products to build a new supply over the long term”, added Rodríguez-Heredia.

CBRE GIP and Madison have been advised by Jones Day, Pérez-Llorca, PwC, Howden, CBRE, Arcadis and Knight Frank, whilst Kempen, Freshfields and Deloitte have advised Lazora.

Last May, Azora postponed its planned debut on the stock market and, in August, its management contract with the real estate firm Hispania was terminated, as a result of which it agreed to receive €224.5 million from Blackstone, which had acquired 74% of Hispania through a takeover.

Original story: Expansión 

Translation: Carmel Drake

385