Neinor Homes (Neinor) reaches an agreement with Merak IMS, S.L. (Merak), a holding company controlled by funds managed by Bain Capital, to acquire a 10% stake in Promociones Habitat, S.A. (Habitat) and enters into an agreement where Neinor will provide development and management services to Habitat’s ongoing developments and land bank.
Habitat's land bank has the capacity to develop around 8,000 residential housing units. Nearly 50% of the land bank, approximately 4,000 housing units, has been launched, with about 2,200 units currently under construction or completed and 2,000 units already sold.
As part of the deal, Neinor will provide services to a high-quality land bank that complements its own. Madrid represents c. 3,500 housing units or 44% of the total land bank, located in key areas such as the new southern-west developments of Berrocales, Ahijones and Valdecarros, but also located in high growth areas located to the east of the city, such as Retamar de la Huerta and Brunete.
With this agreement, Neinor will operate the largest residential portfolio in Spain (either on its own behalf or providing services to Habitat), with more than 10,500 units active, of which more than 6,000 are under construction or already completed.
Neinor's co-investment strategy plays a key role in its Strategic Plan announced in March 2023, aiming to raise €500m from new strategic partners through 2027. With the sixth partnership announced, Neinor will more than double its 5-year target by achieving €1.2b in assets under management in the last 18 months. Since March 2023, Neinor has signed four partnership agreements with investors to invest over €300m in build-to-sell projects, acquiring five land plots with nearly 1,700 housing units for a total investment of around €130m.
Borja García-Egotxeaga, Neinor Homes’ CEO commented: “This deal is bound to transform the growth paradigm in the Spanish residential sector, where in recent years existing platforms haven’t been able to scale meaningfully. Today, thanks to our dealmaking and execution capacity we are strategically positioned to seize growth opportunities in ways that are highly accretive to both shareholders and co-investors. Additionally, the expected strength of the Spanish macro in the next three years is set to act as a tailwind clearly playing to our advantage. Over this period, Neinor’s equity story will transition quickly from being the highest dividend yield in the EuroStoxx600 with c.30% expected return in the coming 18 months towards a double-digit earnings growth.”
Ali Haroon, a Partner at Bain Capital said: “Our residential housing strategy is closely aligned with our firmwide thematic investment approach to create lasting value. With the demand for housing growing across Spain, we believe there is a significant opportunity to develop high-quality housing for the high concentration of households seeking the dream of homeownership. Bain Capital is a global player in the real estate business with significant investments and a clear investment strategy in the Spanish market. We have a solid track record in focusing on value-added real estate assets, enabling us to successfully deliver for investors.”
Jordi Argemi, Neinor Homes’ Deputy CEO and CFO said: “This transaction marks a breakthrough in the execution of Neinor’s Strategic Plan as it accelerates both the timing and scale of our JV business, whose value is yet to be priced by the market. So far with the €1.2b AUMs, Neinor has far exceeded its initial expectations and deployed c. €50m targeting +25% IRR. Moreover, we are extremely pleased that with an innovative structure, we've been able to earn Bain Capital's trust as its main partner in Spain, reinforcing our ability to manage their platform and maximise returns.”
Nikolay Golubev, a Partner at Bain Capital commented: “We look forward to building upon this partnership with Neinor and leveraging our deep industry expertise to deliver quality housing in Spain. Since our acquisition of Habitat, we have created around 5,500 units in a market facing a real shortage of residential housing, a strategy making a big impact across the homebuilding sector.”
Image source - Pexels.
Written by Leon Goldwater for Europe Real Estate.
Europe Real Estate — an overview of real estate developments in European countries.
