Public-private collaboration is bearing fruit in Madrid's residential rental market. The need for affordable housing in the capital is attracting the interest of real estate players, who are identifying an opportunity to invest in projects that facilitate access to housing at more affordable prices. On this occasion, the Unión Temporary Joint Venture (UTE), made up of Avintia Inmobiliaria and Pecsa Real Estate, has formalized a strategic alliance with Palatino Residencial. This alternative investment initiative, promoted by Bankinter Investment and Vía Agora, will enable Palatino to manage a lot of affordable housing owned by the Madrid City Council after the completion of the works currently under development by the UTE. This lot, previously awarded to Grupo Avintia and Pecsa, includes five developments in the capital, totaling 452 homes with one, two and three bedrooms, complemented with common and recreational areas.
To carry out this operation, Grupo Avintia and Pecsa have received financing from Banco Santander, as well as legal advice from Andersen, led by Javier Lacleta and Claudia Martínez-Niño, and the support of TC Gabinete Inmobiliario. This development reinforces the position of both companies in the Built-to-Rent (BtR) sector.
Roberto Campos Gómez de Figueroa, CEO of the Grupo Avintia Real Estate, stated: “It is absolutely motivating to see the trust placed in us by large funds, investors and the public administration. This is the result of our commitment to affordable BtR, which currently accounts for more than 90% of our business. 2023 was a great year and we expect to end 2024 with more than 4,000 homes in our portfolio, not only in the country's main capitals, but also in secondary cities with serious depopulation problems".
Ignacio Juan-Aracil Elejabeitia, CEO of Pecsa, commented: “At Pecsa we have been promoting housing and executing building works for the public administration for many years. Combining both activities opens up a historic opportunity in the coming years to execute affordable BtR in public-private partnership, where we are experts. So we expect this to be the first of many projects to come”.
The joint venture between Grupo Avintia Real Estate and Pecsa Real Estate was awarded two of the five lots in the first affordable rental housing tender launched by the Madrid City Council. This tender, aimed at the construction of more than 2,000 affordable housing units in BtR distributed in 11 districts of the city, assigned lots 2 and 4 to the joint venture, the latter being transferred to Palatino Residencial for its management. It is established that the rent of these homes will be at least 25% lower than the market price of each area, and the cost of rent will not exceed 25% of the monthly income of the family nucleus, thus seeking to expand the supply of housing and reduce rental prices in the city. After the period of operation, the housing units will be incorporated into the municipal public housing stock.