Spanish residential property company, Neinor, has exited its new 213 build to rent project in Valencia, which the company said was a ‘clear signal’ to capital markets’ for potential to unlock value from the rest of the BTR platform.
Buyer, Savills Investment Management, has completed the transaction for €66 mln. The developer said that the price achieved was in line with the gross asset value of December 2022.
Savills Capital Markets Living Team acted as an advisor to the seller.
As part of the agreement, Neinor will continue to manage the asset through its asset management subsidiary, Renta Garantizada.
In total, the development has 209 apartments and 4 retail units. It was completed in November 2022 and forms part of a larger scheme where the same company has sold more than 200 units in its core build-to-sell business.
The asset has been awarded a BREEAM “Good” Certificate, with plans to upgrade this to an ‘Excellent’ rating in the future.
Since the beginning of the year, Neinor has sold 3 build to rent developments for more than €100 mln to both institutional investors and family offices. Those are Hacienda Homes, Lyra, and now Sky Homes. Together the developments represent about 20% of Neinor’s total BTR portfolio.
The company said that ‘unlocking and crystallizing this value to shareholders’ was a centrepiece of the €600 mln shareholder remuneration programme communicated to capital markets back in March 2023.
With this sale the company has already surpassed its targets for the full year while it continues in advanced negotiations for the sale of other BTR buildings.
Borja García-Egotxeaga, CEO, said: ‘The rental market is an emerging asset class in Spain and its strong growth prospects offer a very compelling investment opportunity for both developers and investment managers.’
‘Between 2021 and 2026 the number of rental households is expected to increase by 700,000 while the current pipeline for new buildings stands at only 25-30,000 units. Neinor will be responsible for approximately 10% of the total new supply and is ready to assume a leading role in the Spanish BTR sector.’
Jordi Argemí, deputy CEO and CFO, added: ‘This sale is a key milestone in the execution of Neinor’s strategic plan, 2023-27, announced just a few months ago.'
He said it offered a ‘clear signal to capital markets’ over the capacity to unlock and crystallize the value behind Neinor’s BTR platform'.
Fernando Ramírez de Haro, MD at Savills Investment Management for Spain and Portugal, explained: ‘The addition of these assets to our portfolio will strengthen our position in the Build to Rent segment, which offers very compelling growth opportunities thanks to the gap between supply and demand in the market.’
‘The Valencian market in particular has registered a substantial increase in demand for rentals in recent years, consolidating the position of these types of assets. In the Spanish market, which offers robust fundamentals, we invest in opportunities that allow us to generate sustainable, long-term value for our investors.'
