Neinor Homes (Neinor) and Orion Capital Managers via its sponsored Orion European Real Estate Fund V (Orion), and Neinor’s largest shareholder with a 27% stake, have agreed to acquire the first two land plots for its Spanish build-to-sell (BTS) joint venture (JV) where Orion holds a 90% stake on this vehicle while Neinor owns the remaining 10%.
Neinor and Orion acquired two fully permitted land plots located in highly consolidated areas of the provinces of Barcelona and Alicante to build 153 new homes for sale. These developments are scheduled to be launched immediately and delivery is expected to take place between the years 2026 and 2027. As part of the agreement, Neinor will act as delivery partner manager overseeing the project design, licensing, commercialization, and construction.
Altogether these acquisitions represent 30% of the target investment committed (€50m) and both parties are currently analysing additional opportunities that we expect to close in the coming months.
The co-investment strategy plays a key role within the business plan announced in March 2023 as Neinor puts a greater emphasis on its balance sheet optimization while pursuing equity-efficient growth. Between 2023 and 2027, Neinor expects to deploy c. €1b in new land acquisitions of which half are expected to come from new equity partners.
Borja Garcia-Egotxeaga, CEO of Neinor Homes, has commented “The Spanish residential market is currently positioned as one of the residential markets worldwide with the lowest ‘beta’ as it has a significant imbalance between demand and supply while leverage is extremely reduced for households, banks and developers. Neinor recently launched its co-investment business and is very well positioned to take advantage from the growth opportunities we envisage for the Spanish market in a capital-efficient manner."
Jordi Argemi, Deputy CEO and CFO has pointed out that "As we explained in our business update, equity efficient growth is a key pillar of our strategy. In a short period of time, Neinor was able to set up two JV’s with Tier 1 investors for a total consideration of €150m that will help us to deliver on our commitment to improve ROE towards 15%.”
Aref Lahham, Orion’s Founding Partner said: “We have always believed in the potential of Spain's residential landscape, and this joint venture allows us to capitalize on the profound growth opportunities it presents. Our shared vision for excellence, combined with Neinor's impeccable track record as a delivery partner, assures us that these developments will stand as landmarks in their respective communities. We are keenly looking forward to identifying more strategic opportunities and strengthening our collaboration with Neinor.”