Neinor Homes to dedicate itself to renting homes in Spain

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

The housing for rent interests the companies. Even to those that in principle are far from that business. This is the case of the developer Neinor Homes, which is currently studying the possibility of entering that market as the owner of buildings, as sources of the company admit to Cinco Días.

Neinor Homes is currently a developer of new construction homes, with a forecast of 2,000 homes to be delivered this year and another 3,000 flats remaining to be built. The signature arises after the purchase, on the part of the American bottom Lone Star, of the old real estate of Kutxabank. In 2015 he joined Juan Velayos as CEO and two years later the company was the first of these promoters to debut in the stock market after a decade that devastated the brick sector. As of today, its main shareholder is the Israeli Adar fund, with 28.6% of the capital.

The company is now studying to enter the patrimonialist business, an activity in which the socimis (listed companies of investment in the real estate market) have shone in recent years. From the company it is explained that there is no decision made and keep all options open.

Basically it is a matter of choosing between three alternatives, if the company finally decides to make the jump to that activity. On the one hand, the construction of leased housing, buildings commissioned by investors or socimis as turnkey projects. As a second option, the company studies establishing joint ventures with investors and, finally, becoming the owner of the houses it builds.

The company receives advice from Goldman Sachs on the possible rental business, as the newspaper El Confidencial said yesterday, although from the company it is explained that several investment banks are collaborating on different proposals.

Until now, several experts from the real estate sector have indicated that the large promoters of the sector are interested and in the study phase of leasing projects, but above all turnkey for fundamentally foreign investors seeking this type of property. This new activity would allow to diversify the business and cover the demand to build a park of houses for rent. Although raising projects for third parties has a lower profitability than the traditional business of building and selling homes.

For Neinor, taking the next step of becoming an owner means, in addition, greater investment and lower profitability. But it would enter a more stable segment to cycle changes than construction, since it means receiving monthly rents in the very long term. If the company finally makes that decision, it also faces to explain to investors the entry into an activity not initially planned.

WHO ARE THE PROTAGONISTS

The rental market is controlled between 96% and 97% by individuals and only between 4% and 3% for funds and socimis, as calculated this newspaper last year with data from large companies. The main player is Testa Residencial, controlled 80% by Blackstone since 2018 and quoted in the Alternative Stock Market. Most of these firms have become socimis because of the tax advantages. In the MAB, 25 of these companies control a residential portfolio for 4,533 million euros, of which more than 2,000 million correspond to Testa, although there are other names such as Témpore or Vivenio. One of the shortcomings of this segment is precisely a new construction park for rent.

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

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