CBRE Global Investment Partners (CBRE GIP) and Madison International Realty have joined forces to buy a portfolio of Spanish residential properties worth €870m.

The newly formed joint venture bought the 6,458-unit portfolio as part of the recapitalisation of a fund managed by Azora, which had come to the end of its life. Azora will continue to manage the assets and has a minority stake in the venture.

The portfolio comprises 65 primarily mid-market apartment block buildings of which around 70% are located in and around Madrid.

CBRE GIP and Madison said they intend to grow the venture and seek further opportunities to invest in the Spanish multi-family housing market.

Alexander van Riel, the head of continental Europe at CBRE Global Investment Partners, said: “The residential rental market in Spain is very fragmented making this portfolio and its critical size unique to act as a major consolidator in the sector.

“This investment is in line with our key strategy – to focus on urbanization and demographic trends in supply constrained markets – and increases the CBRE GIP residential sector exposure in Europe.”

Derek Jacobson, the co-chief investment officer at Madison International Realty, said: “This investment represents a rare opportunity to acquire a large scale, high-quality residential portfolio located largely in the Spanish capital. We have a track record of residential investment and management in the US from which to draw on as we look to grow this joint venture.

“This is our first JV with both CBRE GIP and Azora and is typical of the strong focus we place on building strong relationships with specialist partner firms where we can combine their expertise and local market access with our own real estate discipline and approach.”

Javier Rodriguez-Heredia, a partner of Azora and head of residential, said: “We have kept this 6,458-unit portfolio under rental for 15 years, providing living solutions to thousands of families.

“Instead of liquidating and selling these units, with this strategic partnership, we have not only found a way to keep the units available for the families, but we will also increase the supply by continuing to invest in new rental product.”