Metrovacesa and Vita Group form joint venture to develop flex-living building in Madrid

• The project will have 22,000^m2 and 519 rooms, and forms part of the Oria Innovation Campus complex, located on Avenida Cardenal Herrera Oria in Madrid.

• Metrovacesa and Vita Group have created a joint venture for the development of the building, which once completed will be wholly owned by the British company.

• Cain is financing the construction of Vita Group’s project with a loan of 73 million euros.

• Work begins this October and will be completed in 2027.

• This is the second project agreed between Metrovacesa and Vita Group, following the agreement signed at the end of 2023 for the development of a Vita Student Residence in the same development.

Madrid, 28 October 2024. Metrovacesa, Spain’s leading real estate developer with more than 100 years of history, and Vita Group, a specialist in urban regeneration, have signed a joint venture to develop a flex-living building at Oria Innovation Campus, located on Avenida Cardenal Herrera Oria, next to the former Clesa factory in Madrid.

The 22,000^m2 building will have 519 rooms with a large number of residential services, such as a co-working area, games room and swimming pool. Construction work will begin this October, and the building will come into operation in 2027, at which time Vita Group will become the sole owner and operator of the building.

Cain International (‘Cain’), the alternative asset manager specialising in real estate investment solutions, is providing a €73 million construction loan to Vita Group and Metrovacesa SA for the development of a flexible housing tower. The deal marks Cain’s seventh financing transaction with Vita Group, supporting the delivery of more than 5,000 beds across the UK and Europe.

This agreement represents Vita’s first joint venture in the flex-living concept, leveraging its experience as a developer and vertically integrated operator of co-living brands, PBSA and BTR, to create a world-class flex-living product that responds to the dynamics of Madrid’s fast-paced rental market.

This is the second project to be developed jointly by Vita Group and Metrovacesa, both within the Oria Innovation Campus. Work on the student residence, the Vita Student Oria Madrid, began at the end of 2023 and will be completed in 2026. The 20,100^sqm residence will feature a total of 588 high-quality studios offering ‘the best student living experience in the world’, with exceptional amenities such as a state-of-the-art gym, games room, private dining rooms, study areas and a swimming pool. The services are complemented by Vita Student’s innovative all-inclusive concept, which covers expenses, a balanced breakfast, high-speed connectivity, housekeeping, access to ample bookable space and a full calendar of events.

For Metrovacesa, Oria Innovation Campus is the largest project in its tertiary business segment and an example of the long-term value creation of its land portfolio. With a total of 89,000^m2 of mixed-use space spread over four buildings, Oria will represent a total investment of more than 300 million euros for the city of Madrid. In addition to the two Vita buildings, the complex will have two more buildings for tertiary use with a size of 46,000^sqm, for which Metrovacesa continues to explore alternatives with potential investors or tenants. The area has very good public transport connections, with a train station nearby and a direct connection to the Chamartín transport interchange.

Oria Innovation Campus aims to be a benchmark space in terms of energy efficiency and urban regeneration of an area that has been in disuse for years, promoting a new pole of economic activity. It will have state-of-the-art, high quality and efficient buildings, which will achieve, as a minimum, the BREEAM ‘Excellent’ rating. 50% of the common areas of the complex will be dedicated to green spaces. It will also have a large number of parking spaces, fully guarded, with an area dedicated to car sharing and electric vehicle charging.

From the outset, Oria Innovation Campus has been designed to maximise its value through the development of real estate assets and common spaces that generate synergies between the complex and its different types of users. Thus, the main pillars that best define the project are: Connectivity, Community, Talent and Innovation.

Enrique Gracia, Metrovacesa’s Tertiary Director, commented: ‘At Metrovacesa we are committed to creating innovative projects that bring long-term value to cities. Oria Innovation Campus is an emblematic project that contributes to urban regeneration and dynamism in the city of Madrid, and this agreement between Metrovacesa and Vita Group is an important milestone to ensure the success of the project.

Ioannis Verdelis, Investment Director of Vita Group, commented: ‘The Oria Innovation Campus is one of the most exciting large-scale urban regeneration projects currently underway in Europe, and offers Vita the opportunity to take its world-class housing products and tailor them to this fast-paced residential market, where there is a shortage of supply. We are confident that, with Madrid’s growing economy, vibrant tourism and reputation for housing some of the world’s best higher education institutions, our new flexible housing product will uniquely respond to the city’s residential needs. With Metrovacesa and Cain, we have the right partners to help us deliver this.

Graham Keable, Managing Director of Cain International, commented: ‘Madrid’s solid economic growth, strong demographic profile and key sectors such as tourism, technology, education and manufacturing have created favourable long-term fundamentals for its living sector. Having collaborated with the Vita team on multiple PBSA projects, we are confident that their strong track record and high quality offering will appeal in one of Europe’s leading cities. We look forward to continuing to strengthen our partnership.