AEW has agreed to forward purchase two build-to-rent residential developments, Sol de Llevant and Terrasses de Llevant, in Palma, the capital of the Spanish island of Mallorca on behalf of a separate account mandate backed by a German pension fund. The schemes, which are being delivered by renowned developer Metrovacesa, will provide a total of 203 residential units at mid-market pricing levels, with a mix of one to four-bedroom apartments. The properties, which comprise a total of 23,200m², are expected to be completed by 2023. The purchase price was not disclosed.
A range of high-quality amenities will be available to residents including terraces, private and communal garden areas, swimming facilities and car parking. The buildings will also have sustainability features such as solar panels to support electricity supply and LED lighting and are targeting an ‘A’ EPC rating for energy consumption. Situated in the Nou Llevant district, the developments form part of one of the most important urban regeneration projects in Palma de Mallorca, which will see the creation of 400,000m² of the new office, retail, leisure and residential space. The area is well connected to the city centre via public transport and by foot and is in close proximity to the seafront, as well as being a five-minute drive to Palma Airport.
Lars-Henning Pylla, Fund Manager at AEW, commented: “Despite the popularity and growth of Palma de Mallorca, the city, which boasts its own dynamic local economy, is experiencing a lack of high quality, affordable rental accommodation targeted at the local community. This is being especially felt within the Ma-20 ring road where both developments are situated. For these reasons, we are confident that these high-quality apartments with a range of amenities, which are expected for delivery in 2023, are well placed to meet the demand for housing in this area.”
Carsten Czarnetzki, Country Head Spain at AEW, commented: “We remain positive towards investment in the residential asset class in Spain, which continues to attract interest from institutions due to its countercyclical and secure characteristics, whilst also delivering much-needed housing in an underdeveloped market. This is our second such operation in Spain within a year which demonstrates our conviction and growing appetite for this asset class going forward.”