CBRE Global, Madison Partner on $1B Deal for Housing in Spain
The portfolio consists of 65 primarily mid-market apartment block buildings of which approximately 70% are located in and around Madrid.
MADRID—CBRE Global Investment Partners and New York City-based Madison International Realty have purchased a residential portfolio mostly located in and around Madrid for 870 million euros or more than $1 billion.
The portfolio consists of 65 primarily mid-market apartment block buildings of which approximately 70% are located in and around Madrid. The balance of the portfolio is located in other key cities in Spain.
The portfolio has been purchased as part of the recapitalization of a fund that had come to the end of its life that was managed by Azora. The firm will continue to manage the assets and has a minority stake in the venture. CBRE Global Investment Partners and Madison intend to grow the venture and seek further opportunities to invest in the Spanish multi-family housing market, the two companies report in a joint announcement.
Alexander van Riel, head of Continental Europe at CBRE Global Investment Partners, says of the purchase, “The residential rental market in Spain is very fragmented making this portfolio and its critical size unique to act as a major consolidator in the sector. This investment is in line with our key strategy—to focus on urbanization and demographic trends in supply constrained markets—and increases the CBRE GIP residential sector exposure in Europe.”
CBRE Global Investment and Madison International Realty believe the economy in Spain is strong with significant tailwinds. Combine those market dynamics with an undersupplied housing market in Spain’s major cities, they feel the Spanish multi-family housing market continues to be a “compelling investment opportunity.”
Derek Jacobson, co-chief investment officer at Madison International, adds, “This investment represents a rare opportunity to acquire a large scale, high quality residential portfolio located largely in the Spanish capital. We have a track record of residential investment and management in the US from which to draw on as we look to grow this joint venture.”
He adds that the deal marks the firm’s first joint venture with both CBRE Global Investment Partners and Azora.
CBRE Global Investment Partners is a division of Los Angeles-based CBRE Global Investors, which had assets under management of $22.8 million as of June 30, 2018.
In late April of this year, Madison International Realty and Ghelamco announced that the Madison International Real Estate Liquidity Fund VI LP had taken a 50% stake in the Warsaw Spire office tower, becoming an equal owner alongside the Ghelamco GP12 fund in the 49-floor Warsaw, Poland office tower.
CBRE GIP and Madison were advised by Jones Day, Perez Llorca, PwC, Howden, Arcadis, CBRE and Knight Frank, while Azora was advised by Kempen, Freshfields and Deloitte.