UK investment manager Octopus Investments announced on Wednesday that it has extended its tentacles into Europe for the first time in its 24-year history.
The group has opened a new Spanish office, located on Paseo de la Castellana in Madrid’s financial district. The office represents the first permanent location for Octopus in mainland Europe, as it looks to build a more global footprint and expand the firm’s existing investment capabilities.
Octopus is principally focussed on the living and healthcare real estate sectors and is aiming to expand all of its existing strategies into Spain, and across Europe, over the next two to three years, including elderly and specialist care homes, retirement living, affordable housing and real estate debt.
Octopus’ first strategy to include deployment in Spain is a new European value-add retirement living strategy, focusing on the development of later living schemes exclusively for rent for those aged 75+.
As part of the strategy, Octopus has agreed to develop a joint venture (JV) with Neinor, a major residential property developer in Spain. Neinor has a multi-sector strategy in Spain, with significant experience in build-to-rent strategies. The JV aims to invest an initial €200 mln in developing retirement rental schemes across Spain and will also run the day-to-day operations.
Ed Clough, managing director of Octopus Real Estate, has relocated to Madrid temporarily to support the office’s early growth. 'In growing our real estate business, we have looked carefully for regions where we feel our expertise will resonate, the fundamentals are supportive, and where we believe we can grow a long-term business. Spain with its strong economy, ageing population, growing housing need across all age groups, and high-quality healthcare system fits that approach,' he said.
Lieven Debruyne, executive vice chair of Octopus Investments, said:'We’ve seen how investors globally are increasingly adopting a thematic approach to investing, targeting strategies where underlying demand is driven by demographic trends. We’ve also seen an increasing allocation within real estate to the living sectors, as more investors seek out alternative investment opportunities. So, while we are beginning our European expansion efforts in Spain and later living, we see a big opportunity in expanding our existing specialist strategies and exploring new geographies in the years to come.'
