Hines fund agrees purchase of Madrid residential scheme
Real estate firm Hines has, on behalf of the Hines European Value Fund 2 (HEVF 2), signed a forward purchase agreement for a 31,000-square-meter multifamily rental residential scheme in Madrid.
Hines agreed the deal for the completed Valdebebas 125 scheme with ACCIONA, which is listed on the Ibex 35 Spanish Stock Exchange.
The scheme is located in one of Madrid’s fastest growing residential districts in the northeast of the city.
Hines and ACCIONA worked closely together on the scheme design and specifications before signing the forward purchase agreement. ACCIONA will now develop the scheme, which is expected to be completed in 2022.
Incorporating around 395 apartments of varying sizes for individuals, couples and families, Valdebebas 125 is located close to a train station and faces the new Valdebebas Central Park. It will provide a home for around 900 people. The community will also include 7,600 square meters of landscaped spaces with private leisure amenities, together with a supermarket, convenience retail and restaurants that will service the entire Valdebebas area.
Hines was represented by Colliers and DLA Piper on the deal, with Jones Day acting for ACCIONA.
Vanessa Gelado (pictured), Hines Spain country head, said: “This transaction gives us an early entry into a nascent market in Spain benefiting from a demographic and lifestyle shift from home ownership to renting. At present, demand from the institutional investment community for well-located, high-quality purpose-built multifamily projects is significantly exceeding the volume of opportunities, so we are particularly pleased to have secured this asset.”
Hines secured around €637m of investor commitments at the first closing of HEVF 2 in December 2019, exceeding 50 per cent of the € 1.25 billion total fund target. When factoring in leverage, the fund is expected to have total purchasing power approaching €3 billion and is anticipated to be Hines Europe’s largest closed-ended fund to date.
Paul White, HEVF 2 fund manager, said: “Our team in Spain have done a fantastic job in originating this market-leading value-add residential for-rent scheme in Madrid on an off-market basis for the fund. Once again, Hines is demonstrating the invaluable benefit of embedded local presence to secure major acquisitions in prime locations in Europe’s leading city markets.”
HEVF 2 was launched following full investment of commitments in Hines European Value Fund (HEVF 1), a core plus/value-add fund for which Hines raised €721 million of equity commitments in closings from July 2017 to August 2018, exceeding the original fund target size by more than 40 per cent. HEVF 1 has successfully secured a portfolio of nine investments in Germany, the UK, Denmark, Spain, Italy and Poland.
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