Institutional investors in Spanish multi-family received a fillip this week when Spain’s Congress voted down changes in the rental law.
A decree-law introduced on 18 December, which allowed tenants to extend leases for up to seven years, lasted only five weeks before the Congress voted against it on 22 January.
Royal Decree-Law 21/2018 had introduced the right for tenants to extend leases from three to five years, or to seven if they had a professional landlord, and to limit the deposit that a landlord could charge. It also said professional landlords should bear management expenses.
One institutional investor told EuroProperty that the rental regulation had caused it to delay its investment plans in the final part of 2018.
It was opposed by Blackstone, which has been the largest investor in Spanish PRS in the last five years, deploying around €25 bn in the market, largely by buying large bank non-performing loan portfolios at big discounts.
The Spanish press reported that a senior Blackstone executive publicly criticised the minority socialist government over the measures at a meeting attended by the Minister for the Economy in November.
Claudio Boada, Blackstone’s senior adviser for Spain and Portugal, is said to have reminded those present that his company had ‘backed Spain during the worst years of the crisis’.
The decree had not included the introduction of rent caps in parts of the country most affected by increasing rental prices – as the far-left Unidos Podemos party had asked for.
In the vote that overturned the law, Podemos voted against it for that reason.
With the return to the previous status quo, rents normally rise each year in line with inflation.
Blackstone has received approval to list Euripo, its sixth Socimi, on the Alternative Investment Market (MAB) with an initial value of €110 mln.
The US group’s other Socimis are Albirana, Corona, Fidere and Torbel and it owns 80% of Testa which is the largest rental housing company in Spain.
This article first appeared in EuroProperty, PropertyEU's sister publication.