BILBAO: Neinor Homes SA, Spain’s largest real estate developer, is increasing its shareholder payouts and financial targets. It has also unveiled a new joint venture (JV) to build houses with its largest investor.
The company will pay 280mil (US$325mil) to shareholders this year, up from the previously expected 250mil, according to a statement on Monday, confirming an earlier Bloomberg report.
It raised its 2027 targets for net income, profit and dividends, while improving its outlook for debt reduction.
Neinor also said it will form a new JV with Orion Capital Managers, its biggest shareholder. Under the agreement, Orion will put 110mil into the venture and own 90% of it, while Neinor will contribute land, own the rest of the venture, and manage the operation.
Within this development, the construction of a total of 1,097 residential units is planned, distributed across a buildable residential area of more than 107,064 sq m, in addition to other facilities.
The deal is part of Neinor’s broader strategy to become an asset-light real estate developer, relying instead on JVs with partners that provide financial backing.
This capital allocation strategy, which started in 2023, has allowed the company to unlock cash to remunerate shareholders, rather than having to carry the full investment needed for new developments.
Alantra capital advised Neinor on the JV.
Shares in Neinor are up about 85% since it announced the strategy, which has seen the firm partner up with investors including Banco Santander SA, Octopus Real Estate and Axa IM.
It’s also looking to play a role in the consolidation of Spanish real estate: last year, it agreed to acquire Aedas Homes, a larger rival, for about 1bil.
Spain has been suffering a housing crunch in recent years with limited construction activity and prolonged funding constraints.
Demand has surged at the same time, largely driven by population growth, on the back of a wave of immigration over the past five years.
The shortage has taken centre stage after the eviction of an 87-year-old lady from a flat in Madrid led to mass protests across the country which pushed the government to announce an emergency housing package, only to see it defeated in parliament last week. — Bloomberg
