Nuveen Real Estate is joining forces with Iberian developer-investor Kronos to launch a joint venture targeting the development of €1 bn of build-to-rent assets in Spain.
The JV, operated under the Stay brand, has been seeded with a portfolio of approximately 1,400 units, which will be spread across five developments over the next three years. The developments will be located in Madrid, Valencia, Tarragona and Cordoba, with properties ranging between 120 and 500+ units in size and representing more than €250 mln in investment. In total, the platform aims to develop 5,000 homes in the country.
It already has four additional projects in the pipeline, which will raise the investment by another €325 mln representing an additional 1,600 units or so.
Nuveen Real Estate has formed the partnership on behalf of the TIAA General Account, for whom it manages its $37 bn global real estate portfolio.
‘The Build-to-Rent sector in Spain is critically undersupplied and lacking in good quality stock,’ said Marta Cladera de Codina, head of Iberia for Nuveen Real Estate. ‘Coupling this with current constraints on mortgages, changing demographics and a growing consumer preference for flexibility, location and prime modern rental offerings means the development of these new units is crucial for the Spanish residential market at present.’
De Codina said that the housing market is still emerging in Spain, so by committing to this pipeline now Nuveen can be one of the first institutional investors to build a platform of scale in this area.
Kronos will act as the development and property manager via its subsidiary, Stay, one of Spain’s first operating platforms exclusively dedicated to BTR, providing ad-hoc design for the rental market, targeting mid-market demand and offering premium in-house services to tenants.
Nuveen Real Estate was advised by Linklaters and Deloitte. Kronos was advised by Eastdil Secured and Cuatrecasas.
It is the second joint venture strategy launched by Nuveen over the past few weeks. Earlier this month the investment manager expanded its European logistics platform with the launch of a new investment strategy targeting €700-800 mln of assets with a long-term hold outlook.
