AXA IM Buys 919 Rental Homes in Madrid from Tectum for €150 Million

Axa’s real estate manager has starred in the largest turnkey operation involving rental homes in Spain to date.

The manager AXA IM-Real Assets, the real estate arm of the insurance company Axa, has given a clue as to where the Spanish real estate market may go in the short and medium term: it has purchased a portfolio of 919 social housing properties, located in the Community of Madrid, and intended for rent (known as build to rent) from Tectum for €150 million.

The vendor, Tectum Real Estate, is a company specialising in the development of properties for rent, together with its developer partner, Locare Real Estate, which has been advised by the boutique consultant TC Gabinete Inmobiliario. The consulting firm Colliers has advised Axa on the technical and environmental due diligences, and will be in charge of the Project Monitoring for the construction work.

Barcelona City Council Reactivates the Construction of 650 Social Housing Units

Barcelona City Council has assured that by the end of 2020 there will be 2,400 officially protected flats under construction, of which 83% will be for rent.

Over the next few days, Barcelona City Council will reactivate the construction of 15 affordable housing properties, comprising 650 flats, according to an announcement made on Wednesday by the Councillor for Housing, Lucía Martín.

She also revealed that the City Council will tender a package of 16 more projects comprising 1,500 flats in total between now and the end of the year. As such, by 31 December 2020, there will be 2,400 public flats under construction in Barcelona, of which 83% will be for rent. The rest will be used either for urban development or will form part of a surface area entitlement, whereby the city grants public land for use by the residents for 75 years.

Spain Needs 2 Million Rental Homes

The rental home market is booming, forced by the ever-tougher climate in the purchase market and, now, the crisis generated by Covid-19, which is also pushing property developers to offer properties via the build to rent route.

In Spain, there is a growing imbalance between rental needs and the available supply, with 23% of the population now living in rental properties compared to the EU average of 34%. That translates into the need to build around 2 million homes for rent in the country.

House purchases have basically been supported by the repositioning market in recent years, whilst demand from young people has continued to shrink due to the tightening of access conditions and job insecurity. During the post-coronavirus crisis, this situation is expected to get even tougher.

Catella Acquires a Block of Rental Homes from Domo for €25 Million

The property has a surface area of more than 15,182 square metres, distributed over 80 homes, six commercial premises, 106 parking spaces and common areas.

The fund manager Catella, through Catella Residential Investment Management and Catella Real Estate AG, has confirmed the purchase of a block of rental homes in the Madrilenian neighbourhood of Vallecas from the Socimi Domo Activos for €25.5 million, as revealed by Brainsre.news.

The Socimi announced the sale of a residential building located in the Vallecas neighbourhood of Madrid, through a statement to the MAB. The property, located on Calle Arte Figurativo, has a surface area of more than 15,182 square metres, distributed across 80 homes, six commercial premises, 106 parking spaces and common areas.

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

Blackstone Creates ‘Testa Home’ to Manage 20,000 of its Rental Homes

10 January 2020 – El Economista

Blackstone has created a new company, Testa Home, to manage 20,000 of the rental flats owned by its Socimis and other subsidiaries.

The entity will be led by Fidere’s current president, Juan Pablo Vera, and will owned by Testa (58.12%) and Fidere (41.88%).

The aim is to make the management of the portfolio more efficient, optimise operating costs and returns, and render an improved service to tenants.

Of the 20,000 flats, 11,000 are owned by Testa, 6,500 by Fidere, 2,000 by Aliseda and 500 by Hispania.

Original story: El Economista (by Alba Brualla)

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

Advero Properties Receives Green Light for Stock Market Listing on Spain’s MAB

8 November 2019 – Advero Properties has been approved for its stock market debut by the Alternative Stock Market (MAB). The firm’s board of directors set an initial share price of 6.5 euros, valuing Advero at 10.6 million euros.

The firm will trade under ‘YADV’. Solventis is the registered advisor of the company and will also act as a liquidity provider.

Original Story: La Vanguardia

Adaptation/Translation: Richard D. K. Turner

ASG Homes Negotiates the Sale of 1,000 Rental Homes to Institutional Investors

19 June 2019 – Expansión

ASG Homes, the property development arm of the European manager ASG, is following in the footsteps of many of the major property developers in Spain by putting up for sale 1,000 rental homes.

The announcement comes in response to interest from institutional investors in acquiring and managing portfolios of rental homes, given the booming demand in the rental market.

Specifically, ASG Homes is negotiating the sale of 3 of its developments in San Sebastián, Madrid and Sevilla, which will be worth €200 million once finished, with investment funds, Socimis and family offices.

ASG Homes had planned to hold onto the properties and manage them itself but the strong interest from investors has resulted in a change of tack. In this way, the company is emulating the strategies of several listed property developers, such as Metrovacesa and Aedas Homes.

In total, ASG Homes has a landbank spanning 500,000 m2 with the capacity to build 5,000 homes distributed across Madrid, Alicante, Estepona, Marbella, Salamanca, Barcelona, Sevilla and Valencia. It launched its business in Spain in 2013 and invests not only in the residential sector, but also in the hotel, shopping centre and office segments.

Original story: Expansión (by Rebeca Arroyo)

Translation/Summary: Carmel Drake

Quid Pro Quo Launches a €3.5M Capital Increase to Grow its Portfolio

18 June 2019 – Eje Prime

Quid Pro Quo has launched a €3.5 million capital increase to continue investing. The increase will be carried out through the issue and launch into circulation of almost 3.5 million shares with a nominal value of €1 each, according to the Official Gazette of the Mercantile Registry (Borme).

The Socimi owned by Alquiler Seguro will use the funds to continue growing its portfolio. Historically, the company has invested in rental homes costing less than €100,000, mostly in Madrid, but also in Barcelona, Valencia, Alicante, Málaga and Álava.

If the capital increase goes ahead, its total share capital will amount to €12.5 million.

Original story: Eje Prime (by M. C. P.)

Translation/Summary: Carmel Drake