In an off-market deal, Savills IM has acquired two new residential Build-to-Rent SkyHomes towers in Valencia for around €66 million.
The Valencia towers feature 209 homes over 20 floors. The first tower has a total lettable area of 11,987 square meters of total lettable area and 100 apartments. The second has 14,574 square meters and 109 apartments. Each tower also has 673 square meters of retail space on the ground floor.
The seller is Spanish developer Neinor Homes. The purchase is for Savills IM’s European Living Platform and follows the purchase of six new, fully-let Swedish residential assets for around €100million in April 2023. This forms part of Savills IM’s growing commitment to the Living sector in the UK and Europe.
SkyHomes Valencia Towers
Completed in November 2022, the two properties are part of the four residential towers that make up SkyHomes, in the Malilla neighbourhood. 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 near a large shopping/entertainment centre, university, socio-cultural centre and two private health centres.
SkyHomes was developed with high sustainability standards and provided with a strong EPC “A” label. 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.
The acquisition fits perfectly within the platform’s strategic remit to invest in high-quality, sustainable assets in affluent European cities with supportive economic and demographic trends. The aim is to provide resilient income and capital growth over time.
Strengthening Build-to-Rent segment
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.”
Marc Gonzalvez, Responsible for Pan-European Residential acquisitions at Savills Investment Management, says, “This new acquisition 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.”
Strong opportunities in Europe
Patrick Au Yeung, Senior Fund Manager, European Living, Savills Investment Management, adds, “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.”
Neinor Homes Chief Executive, Borja García-Egotxeaga, says, “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.”
