Neinor Homes steps into flex living with Banco Santander and will co-invest €60mn in a project located in Madrid
Neinor Homes and Banco Santander have reached an agreement to invest more than €60mn to develop 160 'flex living' apartments in the city of Madrid
With this agreement Neinor Homes enters a new product vertical within the thriving Spanish living sector further diversifying its housing offering
This agreement represents the 8th JV signed by Neinor Homes since 2023, having raised +€1.2bn, more than doubling the initial expectation set on its Strategic Plan (2023-27) of €500mn
Going forward, both entities will continue to explore additional investment opportunities in the Spanish 'flex living'
MADRID, 10 February 2025 – Neinor Homes ('Neinor"; 'HOME SM'), a Spanish leading listed residential property developer, and Santander Alternative Investments, the alternative asset management platform from Santander bank, alternative investment arm of Banco Santander ('Santander') have reached an agreement to create a joint venture (JV) to develop 160 'flex living' apartments with a total investment expected of more than €60mn. Neinor will hold a 10% stake in the JV by contributing the land plot to be developed, while Santander will hold the remaining 90% stake. Savills and Colliers have acted as investment and commercial advisors to Neinor and Santander in the deal, while Perez Llorca and CMS Albiñana acted as legal advisors.
The asset is located in the municipality of Madrid close to the A-2 highway in the Las Mercedes neighbourhood at just 10 minutes from the Barajas International Airport and 15 minutes from the city centre of Madrid. It will comprise 160 one-bedroom apartments with a total GLA of 9,500 sqm. The development is scheduled to be delivered in 2028.
'Flex living' is one of the fastest growing segments within the Spanish living sector
'Flex living' is the most comprehensive rental product on the market providing a broader array of services than traditional accommodation from amenities (e.g. coworking, gym, swimming pool or event rooms) to advanced services (e.g. high-speed Wi-Fi, utilities, cleaning and maintenance). It includes hospitality-type contracts that are more short-term and a community mindset with curated events, on-boarding process and marketing events for tenants.
As mentioned, this wide array of services is significantly better when compared to the traditional multifamily product that is not professionally managed, including purposely Built-to-Rent (BtR) product. According to CBRE, the average age for tenants is 31 years old, 30% are students, 73% are single and 61% are foreigners.
Furthermore, this product barely exists in the Spanish rental market, where there are approximately 2 million households. In the last five years 'flex living' supply has increased five-fold to roughly 10,000 apartments, of which 90% are concentrated in the cities of Madrid, Barcelona, Málaga and Valencia.
According to CBRE, 'flex living' supply is expected to triple up to 30,000 apartments until 2027. Accordingly, investment volumes in flex living have surged in recent years to €974mn in the first nine months of 2024 (compared to €535mn euros in the same period of 2023).
Since 2023, Neinor raised +€1.2bn equity for its joint-venture business, more than doubling its €500mn target until 2027
Neinor's co-investment strategy plays a key role within the Strategic Plan announced in March 2023 as the Group puts a greater emphasis on optimising its balance sheet while pursuing equity-efficient growth. Neinor had a target to raise €500mn from new strategic partners through to 2027 and, with the eight partnerships announced to date, the company has more than doubled its 5-year target by raising +€1.2bn in assets under management in the first two years of the business plan, of which more than €800mn have been deployed and Neinor has committed more than €50mn.
Since March 2023, for its core Build-to-Sell (BTS) business, Neinor has signed six partnership agreements with renowned investors (AXA IM Alts, Orion Capital, Urbanitae, Avenue Capital, Bain Capital and more recently Ameris Capital). Through these, Neinor is now managing a portfolio of nearly 7,000# to be delivered in the upcoming years.
With regards to Build-to-Rent (BTR), in July 2024, Neinor announced an agreement with Octopus Real Estate to invest €200mn in the Spanish independent senior living sector. Now, through this JV with Santander, Neinor further complements its housing offer and enters the flex living segment.
Borja García-Egotxeaga, Neinor Homes CEO, commented: 'We are extremely proud that one of the largest financial institutions worldwide has trusted Neinor Homes as industrial partner to develop much needed housing supply in the Spanish market. Furthermore, I would like to add that we will continue to work alongside Santander to grow this partnership in the coming years.'
Jordi Argemí, Neinor Homes' Deputy CEO and Chief Financial Officer, commented that:
'The emerging living asset classes represent a huge opportunity for Neinor Homes to continue to grow our platform in the coming years. Thanks to Neinor's joint venture model, where we take minority stakes and act as development partner, we can approach these opportunities in an asset-light manner and generate attractive returns to both our shareholders and co-investors.'
LLYC
91 563 77 22
Neinor Homes
Investor Relations Department
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