Savills Investment Management has completed the acquisition of two newly built residential properties in Valencia for its European Living Platform for a total purchase price of around €66 million. The seller of the properties, Neinor Homes, is a leading Spanish developer of residential assets for Build to Suit (BTS) and Build to Rent (BTR) with over 30 years’ experience in developing sustainable assets across the country.

The transaction represents the second round of acquisitions for the platform following the purchase of six newly built, high quality and fully-let Swedish residential assets for some €100 million in April 2023 as part of its Savills IM’s growing commitment to the Living sector in the UK and Europe. 

The two properties in Valencia comprise a total of 209 residential units over 20 floors. The first tower has a total lettable area of 11,987 sqm with a total of 100 apartments. The second has 14,574 sqm of total lettable area distributed across a total of 109 apartments. Each tower also has 673 sqm of retail on the ground floor.  

Completed in November 2022, the properties are part of the four residential towers that make up SkyHomes, a highly sustainable and modern standing residential asset located in the Malilla neighbourhood of Valencia. The development offers comprehensive amenities, including a swimming pool, coworking space and playgrounds. The site is adjacent to La Fe Hospital, the largest and most reputable hospital in the Valencia region, and within close proximity to a large shopping/entertainment centre, university, socio-cultural centre and two private health centres. 

The asset was developed with high sustainability standards and provided with a strong EPC “A” label, which is a great achievement considering Spain has one of the most restrictive EPC rating systems for multifamily housing in Europe. Other sustainable building characteristics include aerothermal heat pumps in each unit , and electric vehicle chargers soon to be installed along with bicycle racks in the underground parking garage. 

Fernando Ramírez de Haro, Managing Director of Savills Investment Management for Spain and Portugal, says: “The addition of these assets to our portfolio will strengthen our position in the Build to Rent segment, which offers very compelling growth opportunities thanks to the gap between supply and demand in the market. The Valencian market in particular has registered a substantial increase in demand for rentals in recent years, consolidating the position of these types of asset. In the Spanish market, which offers robust fundamentals, we invest in opportunities that allow us to generate sustainable, long-term value for our investors.”

Whilst traditionally a homeowner’s market, Spain’s residential landscape is evolving rapidly towards rental.

Marc Gonzalvez who oversees Pan-European Residential acquisitions, comments: “Thisnewacquisition provides another illustration of our ability to secure high-quality residential assets off market. Whilst traditionally a homeowner’s market, Spain’s residential landscape is evolving rapidly towards rental. Entering this market now enables us to benefit from a significant price discount compared to other countries like Germany or France, despite having as strong if not stronger fundamentals for rental housing.

“We continue to grow our residential portfolio in key markets throughout Europe and are actively looking for new opportunities.”

Patrick Au Yeung, Senior Fund Manager, European Living, Savills Investment Management, says: “This second round of transactions for our European Living Platform represents a great opportunity to acquire a quality residential asset in the third largest Spanish city, at attractive pricing compared to other similar developments in the area. There has been strong rental growth in Valencia in recent years, as well as in the wider Spanish market which has firmly established renter demand.

“We see similar supportive demographic and economic fundamentals across Europe and have a strong pipeline of opportunities for the platform over the coming months to further support our investors and stakeholders.”

Borja García-Egotxeaga, Neinor Homes CEO, adds: “The rental market is an emerging asset class in Spain and its strong growth prospects offer a very compelling investment opportunity for both developers and investment managers. Between 2021 and 2026 the number of rental households is expected to increase by 700k while the current pipeline for new buildings stands at only 25-30k units. Neinor will be responsible for approximately 10% of the total new supply and is ready to assume a leading role in the Spanish BTR sector”.