This is a new vehicle managed by BMB Investment Management which has raised 54 million euros from institutional investors and private banking, both national and international, with special mention of Blue Mountain.
Optimum III will invest exclusively in residential properties in Barcelona and Madrid, located in the city centres. They will be older properties which have some kind of problem (inheritance, lack of money for reforms, tenants wit poor rent history etc.), allowing them to be acquired at considerable discounts to then complete their remodelling in three years, and sell each floor as a unit.
Spokespersons for Optimum III are of the opinion that the SOCIMI is taking full advantage of a good phase in the market, where there is still a supply of these assets at these asking prices and in a context of price and demand growth in the real estate sector Barcelona and Madrid.
Optimum III is BMB’s eighth vehicle, and the second SOCIMI to be launched on the MAB. “We believe that it is a unique investment opportunity at the moment for several reasons: the SOCIMI has capital and limited downside protection due to the quality and location of the assets in which they are investing; this is a niche strategy, which could not be repeated by a larger SOCIMI; its size is limited; and there still exists in today’s market – thus seizing the moment – a supply of undervalued assets in privileged places in both cities,” commented Joseph Borrell, founder of BMB with Ignacio Pigrau.
“At the moment we can se solid bases which reflect the investment plan at Optimum III. Similarly, the recovery of the real estate sector is still in its early stages with discounts of between 30% and 40% compared to 2007; prices in Barcelona and Madrid, which slid downwards during the property crisis, now show signs of recovery better than other Spanish cities; and the macro bases show an increase in confidence, employment, demand, and mortgage financing in Spain,” maintained Ignacio de la Torre, Member and Chief Economist at Arcano.
“The colocation process has prioritised the entry of an anchor investor, which has used most of the capital, validating with the investment the business model and the confidence in the management team who will implement it. This support from a more sophisticated and international investor will attract greater interest among minority investors, especially private banks and investment funds, who have just taken more than 15% of the capital expansion,” Gonzalo Roca, Director de Arcano, in charge of transactions, sums up.