Vía Célere studies transferring its rental home to Greystar in a joint venture | companies

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The promoter Vía Célere is willing to find an original formula to get out of its large portfolio of rental housing, which is currently under construction. The company, controlled by the US fund Value Partnershas been negotiating for months with Griest selling this park for about €400 million. Now it is considering being a minority partner in a joint venture with Greystar that brings together all these assets and in which the promoter becomes a minority partner.

This formula would allow Vía Célere, one of the large real estate companies in the country, to guarantee itself in the future to be the developer partner for additional homes for Greystar, according to sources in the real estate sector familiar with the negotiations. The intention of the parties is to close the operation in the first quarter.

The Värde fund has been trying for months to get out of the shareholding of the developer Vía Célere, which it bought in 2017 and to which it added the real estate business Dospuntos. One formula he has found to collect profits has been to break up the company. For this reason, it put the rental housing portfolio that it is building on the market, for which last year it requested the advice of Credit Suisse, as anticipated Five days.

The interest of Greystar arose from this sale process, a fund from South Carolina (USA) specializing in real estate and which in recent months has opted for rental housing in Spain.

The formula that the two companies are exploring is to create a spin-off of Vía Célere that is dedicated to renting housing. Greystar would become the main shareholder to stay with that portfolio valued at around 400 million, and the Madrid developer would be the minority partner (although relevant) and would be in charge of the construction of future residential projects. The promoter, which has José Ignacio Morales as CEO, reported last year that it has one of the largest build-to-rent portfolios (build to rent, in English in the jargon of the sector), with 2,431 homes. This means allocating more than 10% of the company’s current land bank to the leasing business. These houses are distributed mainly between Madrid, Valencia, Seville, Malaga and Bizkaia.

Greystar is one of the new players that is positioning itself strongly in rental housing, a product in high demand in large cities due to difficulties in accessing mortgages by families.

Greystar recently revealed its interest in leasing with the introduction of the platform Be Home, with the aim of putting 2,500 houses on the market. In this case, it is residential with various common services, a trend known in the sector as cohabiting.

Last year, together with its partners Axa and CBRE IM, it sold the largest student residence company, Resa, to the PGGM fund for 900 million.

Various large international funds such as the case of Greystar (which manages more than 230,000 million assets worldwide) are entering the lease in Spain. There are already some alliances between this type of firm and developers that are launching initiatives of a relevant size. This is the case of the Nuveen fund with the promoter Kronos (to build 5,000 homes); that of the French Primonial with Grupo Lar (also 5,000 homes), and that of the sovereign wealth fund of Singapore GIC with Azora (8,000 units).

20% less on promotion

The construction of rental housing (transferring entire buildings to funds) is an additional business for developers and different from their traditional activity of selling one floor at a time.

This business comes at a time when the traditional one seems to be putting the brakes on due to the rise in interest rates. In fact, from the developer sector it is considered that the adverse macroeconomic situation may lower the number of homes sold in 2023. This was stated yesterday carolina rockpresident of the Madrid employer association of Asprima developers, who indicated that after last year’s sales record it is likely that it will contract by 20%, as she pointed out at the real estate meeting organized in Madrid by IESE in collaboration with Savills and Tinsa.

Roca was convinced that the promoters have the “capacity and waist” to overcome the current cycle. In general, companies in the sector consider that due to the lack of supply of new construction, prices will continue to rise and will compensate in income.

Precisely, the managing director for southern Europe of Greystar, Juan Manuel Acostapresent at the IESE event, also stressed that today “is not the best context for affordable housing from the point of view of capital”, although he highlighted Madrid as a good market.

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