Nuveen Real Estate and Kronos, an Ibeian real estate investor, manager and developer, have formed a build-to-rent (BTR) joint venture in Spain to develop 5,000 homes with a GAV of €1 billion.
The joint venture, operated under the STAY brand, has been seeded with a portfolio of approximately 1,400 units, which will be spread across five developments over the next three years.
The developments will be located in Madrid, Valencia, Tarragona and Cordoba, with properties ranging between 120 and 500+ units in size and representing more than EUR250 million in investment.
The venture already has four additional projects in the pipeline, which will raise the investment by another EUR325 million representing an additional 1,600 units or so. This will contribute to the creation of 12,000 direct and indirect jobs.
Nuveen Real Estate has formed the partnership on behalf of the TIAA General Account, for whom it manages its c. $37 billion global real estate portfolio.
“The Build-to-Rent sector in Spain is critically undersupplied and lacking in good quality stock. Coupling this with current constraints on mortgages, changing demographics and a growing consumer preference for flexibility, location and prime modern rental offerings means the development of these new units is crucial for the Spanish residential market at present,” said Marta Cladera de Codina, Head of Iberia for Nuveen Real Estate.
“The housing market is still emerging in Spain, so by committing to this pipeline now we can be one of the first institutional investors to build a platform of scale in this area. Through partnering with Kronos, we can use our combined expertise in the Spanish market to ensure we are delivering high-quality, well-positioned assets in the locations where they are needed most.”
Kronos will act as the development and property manager via its subsidiary, STAY, one of Spain’s first operating platforms exclusively dedicated to BTR, providing ad-hoc design for the rental market, targeting mid-market demand and offering premium in-house services to tenants.
STAY focuses on design, quality and sustainability. Furthermore, Kronos has a wealth of experience through its expert management team, local knowledge and day-to-day operational oversight.
Saïd Hejal, CEO of Kronos, says: “Following the implementation of our philosophy of supporting architecture and design under our residential development brand Kronos Homes, we now want to lead the BTR sector, providing an innovative tenant-focused product based on design, technology and amenities. Having studied the US and Northern European rental markets over the past two years, we are very excited to partner with Nuveen to launch the STAY platform, which will deliver these best-in-class features to the BTR sector.”
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