Savills acquires Skyhomes BTR for European Living Platform

Savills IM has completed the acquisition of Skyhomes - two new Build to Rent properties in Valencia for its European Living Platform.

Savills IM has acquired Neinor Homes Skyhomes Build to Rent residential development in Valencia, Spain, for its European Living Platform | BTR News
Savills IM has acquired Neinor Homes Skyhomes Build to Rent residential development in Valencia, Spain, for its European Living Platform.

Real estate investment manager Savills Investment Management has completed the acquisition of Skyhomes – two new Build to Rent residential properties in Valencia for its European Living Platform for c. €66m.

Savills has acquired the 209 residential unit Skyhomes buildings from Spanish developer Neinor Homes who carry over 30 years’ experience in developing quality, sustainable assets across the country.

The transaction represents the second round of acquisitions for the platform following the purchase of six newly built and fully let Swedish residential assets for c. €100m in April this year.

“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.”

Fernando Ramírez de Haro, Managing Director (MD), Savills Investment Management for Spain and Portugal

Situated in the Malilla neighbourhood of Valencia, this forms part of Savills IM’s growing commitment to the European living sector.

The first tower has a total lettable area of 11,987 sqm with a total of 100 apartments.

“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.”

Patrick Au Yeung, Senior Fund Manager, European Living, Savills Investment Management

The second tower has 14,574 sqm of total lettable area distributed across a total of 109 apartments. Each tower also contains 673 sqm of retail on the ground floor. 

Completed in November 2022, the two Skyhomes properties are part of the four residential towers that make up the SkyHomes development.

“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 700,000 while the current pipeline for new buildings stands at only 25,000-30,000 units. Neinor will be responsible for approximately 10% of the total new supply and is ready to assume a leading role in the Spanish Build to Rent sector.”

Borja García-Egotxeaga, CEO, Neinor Homes

The Build to Rent scheme aims to be highly sustainable and is provided with a strong EPC ‘A’ label, as Spain has one of the most restrictive EPC rating systems for multifamily housing in Europe.

Other sustainable features include aerothermal heat pumps in each unit and electric vehicle chargers soon to be installed, along with bicycle racks in the underground parking garage.

Skyhomes offers comprehensive amenities including a swimming pool, co-working space and playgrounds, and the site is adjacent to La Fe Hospital; the largest and most reputable hospital in the Valencia region, and within close proximity to a large shopping/entertainment centre, university, socio-cultural centre and two private health centres.

“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.”

Marc Gonzalvez, Responsible for Pan-European Residential acquisitions, Savills Investment Management

The acquisition follows Savills’ plans to invest in high-quality, sustainable assets in affluent European cities with supportive economic and demographic trends.

The company was advised by Ashurst, JLL, PWC and Arcadis and aims to provide resilient income and capital growth over time.