Metrovacesa sells a portfolio of 121 homes for rental to funds managed by Ares Management
Madrid, 9 May 2019. Metrovacesa, the leading real estate developer in Spain, has closed in the first quarter of 2019 the sale of 121 new-build homes to funds managed by an affiliate of Ares Management Corporation (NYSE: ARES), a leading global alternative asset manager. This transaction, amounted to 29 million euros, is the first turnkey residential rental project carried out by Metrovacesa.
Through this transaction, Metrovacesa will promote and develop the homes, which will be acquired and subsequently managed for rental by Ares. In this way, Metrovacesa meets the growing demand for new-build houses from rental operators, thanks to its expertise in residential development. Also, the transaction improves Metrovacesa’s cash flow and EBITDA visibility.
In particular, the homes selected for this portfolio belong to two residential developments located in Arganda del Rey and Madrid, with deliveries expected in the last quarter of 2020 and 2021, respectively.
Solution for a growing demand
Rental specialized operators are becoming a new target group for real estate developers that have quality assets and capabilities for the development of large turnkey projects, such as Metrovacesa.
Although, based on current market conditions, buying a home is economically more attractive than renting, the perception of current purchase prices and income levels is supporting a high demand for rental housing in Spain. This situation results in a growing interest from operators and investors on turnkey residential projects for rental management.
Jorge Pérez de Leza, Metrovacesa’s CEO, stated: “this first turnkey sale transaction for rental, demonstrates the ability of Metrovacesa to open new distribution channels aligned with our strategic plan. Our variety, residential product quality and expertise in real estate development, allows us to offer a perfect mix and the best guarantee for funds that require a turnkey project.”