Barings is investing over €56m in a turnkey affordable rental housing project in Spain being developed by Grupo Ferrocarril.

The investment manager has agreed a forward commitment for the development of 188 build-to-rent housing units in Valdebebas, Madrid.

Barings said Grupo Ferrocarril will manage the complete development of the project, covering architectural design, technical management, urban planning and construction. Work is scheduled to begin in the first quarter of 2027, with completion targeted for 2029.

Upon completion, Barings will acquire the asset for its European living portfolio, which has already secured €512m in signed or exclusive deals in 2026, following the deployment of €580m in 2025.

The latest deal expands Barings’ recent living sector activity in Barcelona and Madrid, which includes a forward commitment to deliver 305 affordable build-to-rent homes in Los Cerros, Madrid, in partnership with Aurora Homes.

José Carlos Torres, managing director, country head Iberia at Barings Real Estate, said: “Following a record year for Barings Real Estate in Iberia, with strong transaction volumes across our core sectors, this investment in Valdebebas demonstrates our ability to continue sourcing and executing high-quality opportunities in a challenging market environment.

“We remain committed to disciplined capital deployment as we grow our residential exposure and deliver attractive long-term returns.”

Gunther Deutsch, managing director, head of European real estate transactions at Barings, said: “Spain, the Nordics, Italy, and Germany continue to offer compelling opportunities this year within the build-to-rent and build-to-sell living sector, supported by strong fundamentals and a pronounced structural undersupply of quality rental housing.

“We would like to expand our pipeline with further transactions across the risk spectrum from core-to-value-add, as well as through forward transactions or developer joint ventures.”

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