Spain’s Neinor Homes has discovered greater interest in co-investment opportunities from international partners than it initially thought existed.
The company has previously announced raising €300m from three different partners, including from Orion Capital Management.
It is one year into a five-year growth plan combing a €600 mln shareholder remuneration idea and €1bn investment push in new land acquisitions, half of which are expected to be undertaken by strategic partners.
In a trading update this week, CIO Mario Lapiedra, said: ‘On the co-investment front, we have found a higher than anticipated interest from investors to create the Spanish leading living investment platform and we are extremely pleased to have raised €300 mln from renowned partners.’
‘In the prevailing market environment, we envisage an attractive land market in Spain to keep making acquisitions targeting 15-20% IRR in a country where fundamentals are still in place offering good risk adjusted returns.’
Neinor Homes is a leading residential platform in Spain, with a land bank to develop close to 14,600 homes, and a Gross Asset Value to June 2023 of €1.7 bn bn. The impressive land bank is located in dynamic regions of Madrid, Western and Eastern Andalusia, Levante, Basque Country and Catalonia.
The company develops assets, rents properties, and has a services division that has extensive experience in urban management, delegated development and construction.
Operating targets
It also announced hitting its 2023 operating targets with the delivery of 2,500 homes, of which more than 1,800 have been delivered in the second half of the year, as foreseen in its new 2023-27 strategic plan.
In addition, the company announces the achievement of its financial objectives in line with its EBITDA and Net Profit targets of €140 mln and €90 mln respectively. These are aligned with the market consensus of €138mn EBITDA and €91mn net profit.
The residential developer will present its 2023 results on 21 February after market close.
It revealed that hitting its targets has led to a decision to approve the distribution of the second part of the dividend, approved at the last extraordinary shareholders' meeting, of a gross amount of approximately €40 mln at a yield of 5%. As in other occasions, this payment will be structured as a capital reduction to optimise tax treatment and maximise the return to shareholders.
The company expects the payment to take place in mid-February 2024.
Furthermore, the developer notes that, despite the challenges witnessed in 2023, due to the upward cycle of interest rates that registered the highest levels of recent years, its commercial activity remained resilient with more than 1,900 new homes sold in the year.
In the last five years, Neinor delivered more than 11,000 homes, 7% above its targets.
Under its shareholder remuneration scheme, the company will have completed in February the distribution of €125 million, 21% of the total planned for the period. It said: ‘Moreover, because of the resilient operational and commercial activity throughout 2023, the company has excellent visibility for the next payments in 2024 and 2025 of €325 mln representing a return of 41%.’
‘On the capital efficient growth side, Neinor was able to sign agreements with three strategic partners to co-invest €300mn, which represents a 60% fulfilment of the five year target. Up to year-end, Neinor co-invested €100mn in asset purchases with its partners.’
