Neinor Homes (Neinor) and Orion Capital Managers via its sponsored Orion European Real Estate Fund V (Orion), have acquired one land plot in Malaga as part of its Spanish build-to-sell (BTS) joint venture (JV) to develop 429 new homes for sale.
The land plot is located in the Cortijo Merino neighbourhood, an expansion area close to Teatinos, where Neinor has delivered more than 300 housing units for sale and 146 for rent. This district is highly consolidated and has a wide array of professional services available namely the University Campus of Malaga, Virgen de la Victoria University Hospital, the Campus of Justice and an excellent metro connection with the city centre of Malaga at just 15-min distance.
With this investment, Neinor and Orion have been able to reach their investment target commitment of €50m by acquiring three land plots located in the communities of Barcelona, Valencia and Malaga to develop 582 new homes for sale until 2028 with a potential GDV of c. €250m. Orion holds a 90% stake on this vehicle while Neinor owns the remaining 10% and is acting as a delivery partner overseeing the project design, licensing, commercialization and construction.
Overall, since the announcement of its JV business in March 2023, Neinor has been able to successfully raise €300m from a diversified pool of investors with complementary profiles in terms of product, target client, geographical exposure and expected returns. The 5-year objective is to raise a total of €500m between 2023 and 2027. In just 9- months Neinor has been able to fulfil 60% of the objective, showing a greater than anticipated interest in investors to invest in the buoyant Spanish residential.
This 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 optimisation while pursuing equity-efficient growth. Until 2027, Neinor expects to deploy c. €1b in new land acquisitions, of which half is expected to come from new equity partners.
Mario Lapiedra, CIO of Neinor Homes, has commented, “We are very proud of this acquisition and the fact that we have been able to fully invest the €50m target equity of the BTS vehicle with Orion. Combined with the €100m investment with AXA some months ago, it demonstrated our ability not only to raise the capital but to execute the investments. In the prevailing high-interest rates environment, we envisage an attractive land market in Spain to keep making acquisitions targeting 15-20% IRR in a country where fundamentals are still in place offering good risk-adjusted returns.”
Gauthier Renaud, Partner at Orion Capital Managers, said “We are delighted to have invested our initial JV investment commitment alongside Neinor Homes in key cities in Spain. Strong underlying fundamentals, including an ongoing supply and demand imbalance, drive the need for increased construction. However, the present challenging market conditions mean that only highly efficient and experienced organizations can meet this demand. Neinor Homes continues to stand out and display excellence in this regard.”
Image provided by LLYC.
