US developer-investor Hines has signed a forward-purchase agreement for a 31,000 m2 multifamily rental residential scheme in Madrid, on behalf of the Hines European Value Fund 2 (HEVF 2).
Located in one of Madrid’s fastest growing residential districts in the northeast of the city, the agreement to acquire the completed Valdebebas 125 scheme was agreed and signed off-market through the Hines local team in Spain from Spanish conglomerate Acciona.
Hines and Acciona worked closely together on the scheme design and specifications before signing the forward-purchase agreement. Acciona will now develop and deliver the high-quality 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 the train station and facing the new Valdebebas Central Park. It will provide a home for around 900 people. The community will also include 7,600 m2 of landscaped spaces with private leisure amenities, together with a supermarket, convenience retail and restaurants that will service the entire Valdebebas area.
'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,' said Vanessa Gelado, Hines Spain Country Head.
Hines secured €637 mln of investor commitments at the first closing of HEVF 2 in December 2019, exceeding 50% of the € 1.25 bn total fund target. When factoring in leverage, the Fund is expected to have total purchasing power approaching €3 bn and is anticipated to be Hines Europe’s largest closed-ended fund to date.
Paul White, HEVF 2 fund manager said: 'Alongside two further assets initial investments for HEVF 2 in Munich and London, we expect to execute transactions committing over €300m of the fund’s equity in Q1 2020, with several more deals developing well. We’re very happy at the pace and quality of pipeline in this opening phase of the fund’s investment period.'
HEVF 2 has been launched following full investment of commitments in Hines European Value Fund (HEVF 1), a core plus/value-add fund for which Hines raised €721 mln of equity commitments in closings from July 2017 to August 2018, exceeding the original fund target size by over 40%. HEVF 1 has secured a portfolio of nine investments in Germany, the UK, Denmark, Spain, Italy and Poland within less than two years of closing its first acquisition and ended its investment period.
Hines was represented by Colliers and DLA, with Jones Day acting for Acciona.