Neinor has structured an investment deal and ongoing programmatic commitnent with Orion Capital Partners as it is continues its quest to attract third party capital to fund new projects via JVs.
Orion is already the largest investor in Neinor on the corporate level. But on Wednesday, the Spanish residential property company said Orion European Real Estate Fund V, which owns a 27% stake, is funding a JV for its build-to-sell segment.
Orion will hold a 90% stake in the JV with Neinor holding the remaining 10% and acting as delivery partner manager overseeing the project design, licensing, commercialization, and construction. As part of the agreement Neinor and Orion have already agreed to acquire two land plots for €20 mln to build more than 150 new homes.
Orion and Neinor will continue to explore additional opportunities for investment and development in the Spanish residential market in the coming months, and could invest €50 mln. Alantra acted as sole financial adviser to Neinor. Nenior is pursuing a coinvestment strategy announced in March. Between 2023 and 2027, the company expects to invest around €1 bn in new land acquisitions of which half are expected to come from new equity partners.
Jordi Argemi, Neinor’s deputy CEO and CFO, said, 'Listed companies are meant to grow as they have a quicker, more agile and diversified access to debt and equity capital markets. However, in today’s market conditions, where debt became significantly more expensive and real estate trades at significant discounts to NAV, this has become a challenging exercise hindering growth opportunities. So as part of our strategic update we decided to find a new way to structure land investment so that we can pursue growth opportunities in a way that is efficient for shareholders.’
Aref Lahham, Orion’s founding partner, said ‘The robust Spanish residential market, coupled with the efficiency and proven competence of Neinor's operating platform, presents an appealing investment opportunity. This partnership is a testament to our confidence in the residential market and the future prospects of the sector. Our investment is a vote of trust in Neinor's ability to continue providing outstanding shareholder value.’
Borja García-Egotxeaga, Neinor Homes’ CEO, said: ‘When we announced Neinor’s coinvestment business we told investors that we were opening up a new channel to invest alongside Neinor as a way to diversify our sources of capital and to improve shareholders’ returns. Today, we are extremely proud as Neinor’s largest shareholder, Orion, for it’s Fund V has decided to become also a co-investor signalling the strength and trust of the platform we have built as well as our commitment to deliver exceptional returns to both co-investors and shareholders.”
