Amenabar Joins Forces with Ares to Invest €110M in Construction of 400 Build-to-Rent Homes

17 January 2020 – El Confidencial

Amenabar Promociones has signed the largest build-to-rent operation to date in Spain with the fund Ares. Together, they are going to invest more than €110 million in the construction of more than 400 rental homes in Valdebebas, Madrid.

The homes are going to be built on a plot that Amenabar acquired at the end of 2019 from Ferrovial for €56 million. The Basque, family-owned, property developer made its debut in Madrid’s residential market five years ago and handed over more than 1,000 new homes last year. In 2020, it plans to increase that figure to almost 1,600, a volume that it hopes to maintain for the next couple of years, which will see it outperform many of its listed competitors.

With this operation, Amenabar is following in the footsteps of companies such as Aedas, Metrovacesa, Quabit, Momentum and Urbas, which have all committed to projects in the build to rent sector in recent months.

Meanwhile, Ares has become one of the most active funds in this segment of the market. For example, Aedas is going to build 500 rental homes for Ares (€70 million); and Metrovacesa is going to construct another 121 homes for the fund (€29 million).

The appeal of the segment lies in the attractive returns that rental homes are currently generating. In Q2 2019, the average gross yield on rental homes across Spain amounted to 3.9%, according to official data from the Bank of Spain, which is much higher than the return on bonds and other prime real estate assets, such as offices and high street premises. Moreover, various cities and neighbourhoods offer even higher returns e.g. Madrid Capital (5.06%) and the Villaverde neighbourhood (8.43%).

Original story: El Confidencial (by E. Sanz)

Translation/Summary: Carmel Drake

Investments in the Build-to-Rent Sector Skyrocket in 2019

21 November 2019 – Investment funds and socimis active in the Spanish real estate market are increasingly investing in the residential build-to-rent sector. The constrained supply of rental housing and growing prices have led to funds and socimis like Ares, Vivenio, Azora and others to pile into the growing market.

Direct investment in the year to September reached €1.8 billion and are forecast to total €2.5 billion by the end of the year. In 2018, investment for the year as a whole reached just 900 million euros.

Funds and Socimis Invest in New Developments

The of the larger operations this year include a partnership between Aedas and Ares to sell four turn-key developments, with a total of 500 homes, in Torrejón de Ardoz, Alcalá de Henares and El Cañaveral (Madrid). Ares also recently acquired a portfolio of 400 homes to the east of Madrid. Stoneweg, for its part, will transfer a 300-flat development in Tetuán, Madrid, to M&G, while Vivenio is investing in a 340-home project in the growing area of Mahou-Calderón.

At the same time, Vivenio and Azora have joined forces with Áurea to develop projects in Móstoles and Cañaveral. Acciona, meanwhile, has finalised a deal to build 135 homes with Axa in Méndez Álvaro. Lastly, TPG is investing in a 391-home development called the Sardes project.

Financing for the developments usually takes the form of either forward funding or forward purchases. The former, which is used by investors looking for higher returns, and risk, usually involves an investor acquiring land from a developer subject to a pre-let but where the development has not been carried out. The developer will construct development paid for by the fund with an additional, profit-related, payment to the developer at completion. Forward purchases, which are considered more conservative, have the developer assume all costs until delivery.

Original Story: Expansión – Rebeca Arroyo

Adaptation/Translation: Richard D. K. Turner

Ares Acquires a Portfolio of Rental Homes to the East of Madrid

21 November 2019 – Ares has finalised the acquisition of a portfolio of 401 rental homes in the vicinity of Alcalá de Henares. The homes are in a new residential area that has easy access to Spain’s capital, Madrid, via the A-2 motorway and public transport.  

The acquisition is set to significantly increase the supply of rental homes in the area. Colliers advised Ares on the transaction, details of which were not disclosed.

Original Story: El Economista – Alba Brualla

Adaptation/Translation: Richard D. K. Turner

Ares European Real Estate Fund V Closes After Raising €1.78 billion

21 August 2019

The Ares Management Corporation announced that it would close subscriptions to its Ares European Real Estate Fund V (REFV) after reaching €1.78 billion in funds. The fund, Ares largest, had originally looked to raise €1.25 billion.

The REFV was created to “acquire undermanaged or underfunded assets out of distressed ownership structures or complex situations, and actively managing them through to exit into the institutional market.” Ares’ latest fund will invest in an array of sectors, including residential, office, industrial and mixed-use assets, mostly in high-liquid European markets such as Germany, France, the U.K. and Spain.

Original Story: Business Wire

Adaptation/Translation: Richard D. K. Turner

Redevco on the Hunt for Mixed-Use Buildings to Join the Rental Housing Bandwagon

3 June 2019 – El Confidencial

A few months ago, Redevco, one of the largest players in the commercial real estate sector in Europe, announced the launch of a €500 million fund aimed at creating a pan-European portfolio of 2,500 rental homes. The aim is to focus primarily on the Netherlands and Germany, but with Spain and the UK accounting for a significant share.

In Spain, the company is now analysing various operations with the aim of closing one or more during the second half of this year. The shopping centre specialist is considering all kinds of strategies, from acquiring properties already for rent to teaming up with property developers and buying assets to renovate.

It is mainly focusing on mixed-used properties in Madrid, Barcelona, Valencia and Bilbao, with an average investment volume of around €20 million per asset. Its aim is to acquire entire properties, rather than small or dispersed assets and it is looking for two-bedroom homes with an average monthly rent of €1,000.

In Spain, Redevco’s commercial portfolio comprises 32 properties worth €800 million. It also operates a joint venture with Ares to invest €500 million in shopping centres, which currently owns the Mercado de San Miguel and Parque Corredor, both in Madrid.

Original story: El Confidencial (by R. Ugalde)

Translation/Summary: Carmel Drake

Operación Calderón: Azora Set to Buy 2 of Atlético’s Plots for Rental Homes

23 May 2019 – El Confidencial

Azora, one of the largest rental home managers in the country, has made a surprise appearance in the home stretch of the process to sell the plots of land owned by Atlético de Madrid.

The company owned by Concha Osácar and Fernando Gumuzio has submitted a binding offer to the football club to buy two of the three plots that form part of Operación Calderón and, according to sources in the know, the bid fulfils all of the requirements of the team. As such, Azora looks set to take over the bulk of the land that the reds and whites are selling by the river.

The rental home specialist has declined to comment on the reports, but all indications are that it plans to build rental homes on the two plots, to boost the growing rental market in the Spanish capital. It would thereby follow in the footsteps on the fund Ares, which has just signed an agreement with Stoneweg to build a block of rental homes on a plot on Paseo de la Dirección, in the north of Madrid.

Indeed, the Spanish-Swiss firm is one of the favourites to acquire the third plot of land in Operación Calderón, which Azora did not bid for. The cooperative manager Concovi is also in the running for that site.

Atlético de Madrid expects to raise around €180 million from the sale of the three plots and 11% of the residential space will be dedicated to social housing properties.

Original story: El Confidencial (by Ruth Ugalde)

Translation/Summary: Carmel Drake

Stoneweg Finalises the Sale of a Tower Containing 300 Rental Homes for €130M

20 May 2019 – Eje Prime

Stoneweg is joining the rental home development market. The fund is going to build a 300-home tower block on the land that it purchased from Dragados, the subsidiary of ACS, on Paseo de la Dirección in Madrid. The operation will amount to €130 million.

The company is holding advanced negotiations with the manager Ares and the US group Greystar, which specialises in student halls, regarding the development. Ares had been the favourite to acquire the tower but now Greystar is gaining ground.

Ares is on a mission to buy up rental homes. In the last few months, the company has agreed to buy 500 rental homes from Aedas Homes, 121 homes from Metrovacesa and 223 homes from Momentum.

Stoneweg purchased the plots from Dragados with the aim of building two residential blocks containing 600 homes in total. The first block will be handed over as a turnkey operation containing rental homes, whilst the second will contain homes with asking prices of €4,500/m2.

Original story: Eje Prime 

Translation/Summary: Carmel Drake

Aedas Revolutionises the Property Development Sector by Building 500 Turnkey Homes for Ares

12 April 2019 – El Confidencial

Aedas Homes has decided to launch a new line of business by building complete housing developments for other companies. In this way, the listed property developer hopes to generate value from its production over-capacity; it anticipates recording revenues of around €70 million from the initiative.

In this vein, the company led by David Martínez has reached an agreement with the fund Ares to build 500 homes in its name in three different locations: Torrejón de Ardoz, Alcalá de Henares and El Cañaveral (all in Madrid).

This is the largest turnkey project in the sector since the outbreak of the real estate crisis, a decade ago and as such, represents a real milestone.

The three largest listed property developers in Spain, Neinor, Aedas and Metrovacesa, are all living by the famous mantra “reinvent yourself or die”. As such, they are expanding their operations as they seek to actually generate the high turnover figures that they promised when they made their stock market debuts.

With this latest announcement, Aedas is sending a clear message to its competitors. It has over-capacity in its production model, which means that it can handle turnkey projects on a large scale, as well as deliver the roadmap that it is already committed to.

With the additional 500 homes from this project, Aedas Homes could end the year with more than 3,000 units launched, compared with the 2,580 initially planned for the year.

Meanwhile, Ares Capital is immersed in its commitment to the Spanish real estate market, with a particular focus on the residential segment, with homes both for sale and for rent.

Original story: El Confidencial (by Ruth Ugalde)

Translation/Summary: Carmel Drake

Sareb’s Sale of Témpore Enters Final Phase with TPG as the Favourite

28 March 2019 – Cinco Días

Sareb’s sale of its rental home Socimi Témpore Properties is entering the home stretch. The bad bank has selected three candidates to pass through to the final round, all of which are US funds, namely, TPG (Texas Pacific Group), Ares and Round Hill, with the former currently the favourite.

Témpore, which is listed on the MAB, has a market capitalisation of €305 million and, according to the most recent assessment performed by Savills Aguirre Newman, an asset portfolio worth €338 million.

In just over a month, Sareb will announce the name of the winning investor, which will take ownership of the Socimi and its 2,249 residential properties.

Original story: Cinco Días (by A. Simón & P.M. Simón)

Translation/Summary: Carmel Drake

TPG, Round Capital & Ares Enter Final Round of Bidding for Témpore

12 March 2019 – El Independiente

Sareb has reactivated the sale of its Socimi Témpore Properties and the funds TPG, Round Capital and Ares are some of the candidates in the final round of bidding.

The bad bank was close to signing the transaction last year but called it off due to a lack of transparency. Then, it was the US investment fund TPG, shareholder of companies such as Spotify, Airbnb and Burger King, who was the likely buyer of Témpore, which manages 2,249 residential homes worth €338 million.

Now, TPG is back in the final round of the new process, this time against two opponents. The real estate fund Round Hill already has a presence in Spain – just a few weeks ago it launched a joint venture with the fund KKR and the logistics firm Pulsar Properties to buy logistics platforms. Meanwhile, the US fund Ares has also starred in several transactions in Spain, particularly in conjunction with the Dutch real estate firm Redevco.

Témpore closed 2018 with a loss of €384,394, but is forecast to generate profits from 2020. Its portfolio of residential assets, which is managed by Azora, generated rental income of €7.3 million last year. Moreover, 80% of its assets are located in the metropolitan areas of major capitals and the rest are in areas with significant rental demand, such as Valencia, Sevilla, Zaragoza, Málaga and Almería.

Original story: El Independiente (by Ana Antón)

Translation: Carmel Drake