Listed Spanish residential property developer Neinor Homes is investing €31m for a stake in Promociones Habitat, a housebuilder controlled by Bain Capital, and has agreed to manage its land bank.
The deal involves Neinor entering into a partnership with Bain-backed Merak IMS to acquire a 10% stake in Habitat and provide development and management services for Habitat’s existing and future projects.
Habitat has a land bank with a significant presence in Madrid, accounting for 44% of its total holdings. As of June, the land bank had the potential to deliver approximately 8,000 residential units.
Borja García-Egotxeaga, CEO of Neinor Homes, said: “This deal is bound to transform the growth paradigm in the Spanish residential sector, where in recent years existing platforms haven’t been able to scale meaningfully.
“Today, thanks to our deal-making and execution capacity we are strategically positioned to seize growth opportunities in ways that are highly accretive to both shareholders and co-investors.”
Ali Haroon, partner at Bain Capital, said: “Our residential housing strategy is closely aligned with our firm-wide thematic investment approach to create lasting value. With demand for housing growing across Spain, we believe there is a significant opportunity to develop high quality housing for the high concentration of households seeking the dream of home-ownership.
“Bain Capital is a global player in the real estate business with significant investments and a clear investment strategy in the Spanish market. We have a solid track record in focusing on value-add real estate assets, enabling us to successfully deliver for investors.”
Jordi Argemi, deputy CEO and CFO of Neinor Homes, said: “This transaction marks a breakthrough in the execution of Neinor’s strategic plan as it accelerates both the timing and scale of our JV business, whose value is yet to be priced by the market.”
Argemi added that so far with the €1.2bn assets under management, Neinor has far exceeded its initial expectations and deployed €50m targeting 25%-plus internal rate of return.
“Moreover, we are extremely pleased that with an innovative structure, we’ve been able to earn Bain Capital’s trust as its main partner in Spain, reinforcing our ability to manage their platform and maximise returns.”
Nikolay Golubev, partner at Bain Capital, said: “We look forward to building upon this partnership with Neinor and leveraging our deep industry expertise to deliver quality housing in Spain.
“Since our acquisition of Habitat, we have created around 5,500 units in a market facing a real shortage of residential housing, a strategy making a big impact across the homebuilding sector.”
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