Goldman Sachs and Spanish investment firm Azora have bought a portfolio of apartments in Madrid from the regional government for €201 mln.

Goldman Sachs and Spanish investment firm Azora have bought a portfolio of apartments in Madrid from the regional government for €201 mln.

The transaction covers 3,000 apartments, located mainly in Madrid city but also in other parts of the region.

The Madrid regional government, which has one of the largest budget deficits out of Spain’s 17 so-called autonomous communities, said it would use the proceeds from the sale for public spending in the region.

The transaction underscores the growing foreign interest in Spanish real estate in recent months as investors seek to capitalise on the market's anticipated recovery. International investors including Meyer Bergman, Union Investment and Deka Immobilien made a timid comeback in Spain over the summer, while AXA Real Estate pulled off a €172 mln acquisition with local authority Generalitat de Catalunya in June.

US private equity firm Blackstone also bought a package of 1,860 residential properties from the Madrid city government for €125.5 mln at end-July, while Spanish bad bank Sareb disposed of a package of assets valued at €100 mln to HIG Capital.

Further deals are said to be hanging over the market in Spain as the regional governments of Catalonia and Valencia continue to sell off public buildings, and Sareb pushes ahead with a plan to offload 42,500 housing units in the next five years.