Aviva Investors and Layetana Living have created a build-to-rent (BTR) partnership in Spain.

Aviva and Spanish developer Layetana said they have partnered to develop a residential portfolio of over €500m, adding that the partnership has already secured its first development project.

The partnership, under the advice of global property consultancy Knight Frank, has acquired a 71-unit residential development in the Sants district of Barcelona expected to be delivered at the end of 2023.

The newly created partnership is expected to target both ”development and forward acquisition projects across major cities in Spain, with a core base in Madrid and Barcelona”.

Aviva and Layetana said they will establish a new operating brand under which assets will be managed, with operating services provided by Layetana.

The latest deal is Aviva’s second BTR venture and its first in continental Europe. In November last year, Aviva partnered with UK residential real estate developer Packaged Living to create an affordable single-family rental platform.

George Fraser-Harding, the head of European funds at Aviva Investors, said: “We are pleased to be partnering with Layetana in the dynamic and evolving Spanish residential market, likewise to be extending our build-to-rent investment programme into continental Europe.

“It is exciting to have already secured our first project in the Catalonia region, where supply constraints and unaffordable prices are increasing rental demand. The Spanish market is one which complements our growing European portfolio well and our focus on delivering an active equity investment to clients.”

Santi Mercadé, CEO at Layetana, said: “The lack of rental supply across most markets in Spain is dramatic and there is huge pent-up demand seeking a quality, affordable product.

”Our partnership with Aviva Investors creates a platform which will seek to address this imbalance and deliver a portfolio of high-quality apartments priced at economical rents under a single brand which will come to be recognised for its high construction standards, affordable prices and extensive amenity space with a focus on outdoor provision.”

Stuart Osborn, the head of European residential investment transactions at Knight Frank, said: “We are seeing real momentum in the BTR market in Spain, with investment volumes in the space set to double for 2022.

”This partnership not only demonstrates the long-term appetite for growth in BTR, but also confidence in the fundamentals which underpin the residential investment market in Spain by committing to deliver market-leading professionally managed, institutional product.”

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