Neinor Homes and Urbanitae have agreed to create a JV to invest up to €150mn in BTS over the next 18 months.
Since 2017, Urbanitae has raised €200mn in equity and debt to finance 141 developments in the most sought-after locations in the Spanish market. Of these, it has delivered a total of 28 projects achieving an average annual return of 16.6% for its investors. Urbanitae's platform is fully regulated by the CNMV and its investor base is made up of local investors in the Family Office and Retail segments.
Urbanitae will hold an 80% stake in the JV, while Neinor will hold the remaining 20% and will act as managing partner overseeing project design, licensing, marketing and construction. As part of the agreement, both parties are already exploring investment opportunities.
The co-investment strategy plays a key role in the business plan announced in March 2023, in which Neinor places greater emphasis on optimising its balance sheet while pursuing capital-efficient acquisitions. Between 2023 and 2027, Neinor plans to invest around €1,000mn in new land acquisitions, of which €500mn will come from new partners.
The JV signed with Urbanitae is the third vehicle closed by Neinor in a period of only seven months. Thanks to this deal, Neinor has already met 60% of the €500mn target set out in its 5-year Strategic Plan. This demonstrates the strong investment appetite for Spain in the current environment, as well as the scalability of the new business line created by Neinor and its aim to become the new investment manager of the Spanish living sector.
Sustainable and capital efficient growth is a perfect complement to Neinor's value proposition, which has one of the most attractive dividend yields in Europe. The company plans to approve dividends of €365mn over the next c.2 years, representing c.50% of the company's market capitalisation as of today, while maintaining a very conservative balance sheet and prudent debt ratios.
Borja García-Egotxeaga, CEO of Neinor, said: "Neinor is proud of the agreement reached with Urbanitae and we are confident that it will be fruitful and beneficial for both companies. In a short period of time we have been able to raise €300mn for the new co-investment line we announced this year, which gives Neinor a significant boost to continue to roll out its business in the coming quarters. In addition, Spain has continued to show its strength and resilience to the current macroeconomic environment and continues to consolidate its position as one of the safest residential markets worldwide".
Jordi Argemi, Neinor's Deputy CEO and CFO, said, "As we have explained in detail during this year's first half results, in a short period of time, we have shown solid execution on the three main value drivers of our business plan, which are the crystallisation of Neinor's BTR portfolio, efficient capital growth through co-investments and increased visibility on upcoming dividend payments. This solid execution demonstrates the credibility and rigour of the strategic plan announced earlier this year, in line with what this management team has achieved over the last 5 years."
Diego Bestard, CEO and founder of Urbanitae, says: "We are delighted to walk this path with Neinor. Since its inception, Urbanitae has aimed to become a serious player in the alternative investment and financing space for real estate developers and, at the same time, provide access to institutional level investments to small and medium sized investors. With over €200mn financed and over 100 developments in the pipeline, we can confidently state that we have achieved our objective. This JV with the leading developer in the Spanish market is proof that Urbanitae is a viable investment and financing solution for all types of developers".