Neinor Homes and Orion Capital Managers have agreed to create a joint venture to invest in the Spanish build-to-sell (BTS) segment.
Orion will hold a 90% stake in the JV with Neinor holding the remaining 10% and acting as delivery partner manager overseeing the project design, licensing, commercialization, and construction. As part of the agreement, Neinor and Orion have already agreed to acquire two land plots for €20m to build more than 150 new homes.
Orion and Neinor will continue to explore additional opportunities for investment and development in the Spanish residential market in the coming months. Alantra acted as the sole financial adviser to Neinor.
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 acquisitions. Between 2023 and 2027, Neinor expects to invest c. €1b in new land acquisitions of which half are expected to come from new equity partners.
Borja García-Egotxeaga, Neinor Homes’ CEO commented: “When we announced Neinor’s co-investment business we told investors that we were opening up a new channel to invest alongside Neinor as a way to diversify our sources of capital and to improve shareholders’ returns. Today, we are extremely proud as Neinor’s largest shareholder, Orion, for its Fund V has decided to become also a co-investor signalling the strength and trust of the platform we have built as well as our commitment to deliver exceptional returns to both co-investors and shareholders.”
Jordi Argemi, Neinor’s Deputy CEO and CFO says: “Listed companies are meant to grow as they have a quicker, more agile and diversified access to debt and equity capital markets. However, in today’s market conditions, where debt became significantly more expensive and real estate trades at significant discounts to NAV, this has become a challenging exercise hindering growth opportunities. So as part of our strategic update, we decided to find a new way to structure land investment so that we can pursue growth opportunities in a way that is efficient for shareholders.”
Aref Lahham, Orion’s Founding Partner says: "The robust Spanish residential market, coupled with the efficiency and proven competence of Neinor's operating platform, presents an appealing investment opportunity. This partnership is a testament to our confidence in the residential market and the future prospects of the sector. Our investment is a vote of trust in Neinor's ability to continue providing outstanding shareholder value."
