Hispania Fund Buys 213 Apartments in Barcelona

Diagonal Mar, Barcelona
Diagonal Mar, Barcelona
In the latest of a series of moves by Spanish REITs, a fund controlled by Hispania Activos Inmobiliarios is paying €63.8 million for 213 apartments in the heart of Barcelona.

The apartments are part of the Isla del Cielo complex, a two-tower development which neighbors the Diagonal Mar park. The deal includes all 150 apartments located in Tower B, 63 apartments in Tower A and 237 underground parking slots, Hispania said in a press release.

The apartments are 90 per cent occupied, said Hispania, which purchased the apartments through its newly-formed real estate investment trust, Hispania Real Socimi.

REITs are growing increasingly popular in Spain, as investors look for more conservative ways to take a stake in the Spanish property market. High-profile U.S. investors George Soros and John Paulson have each taken a €92 million euro stake in Hispania’s new investment vehicle, according to the Financial Times.

“With this second acquisition in Hispania, we remain loyal to our strategy of investing in quality assets with a clear potential for value creation by means of an investment program and a management plan,” said Hispania board member Concha Osácar, co-founder of Azora, Hispania’s investment manager. “Isla del Cielo, being residential for rent, fits perfectly into one of the main competence and focus areas of Hispania.”

Hispania’s plan is to “improve features and services in order to transform it into an emblematic complex of apartments for rent in Barcelona and market it to professional and international customers,” according to the release.

Rents in the complex start at about €1,100 a month for a one bedroom. Work will begin immediately on remodeling empty apartments, the garage and gardens, Hispania executives told the local media. Turnover is “low” in the complex, typically about three years for each apartment, they said.

The purchase was arranged off market and “fully paid with Hispania’s own funds,” Hispania noted in the press release. The seller was a fund run by Spanish private bank Santander, Santander Banif Inmobiliario F.I.I.

SPI Member Comments

Thoughts on “Hispania Fund Buys 213 Apartments in Barcelona

  • speakfreak says:

    Interesting although Diagonal Mar isn’t in the heart of Barcelona. It’s actually officially the last zone before you get to Sant Adria, the next town so actually it’s the furthest you can get from the heart while still being able to say it’s in Barcelona.

    That said it could be a good deal as there is a shortage of quality rental properties in Barcelona. The commonly held delusion that buying is better financial sense than renting means that landlords assume renters are people who can’t afford to buy and so rental flats are often of a very low standard. Apartments like these- well managed and maintained, modern, with 1 or 2 bedrooms, near public transport and with a bit of a view will be in high demand with expat professionals coming here. I know because I have friends living in 3 of the buildings in the picture!

    Of course it all depends on how much they paid for them.

  • 64 million divided by 237 = 300k per apartment. Probably about or just below current market price, depending on the unit. Not included in this is the 237 parking places at market rate of around 2.3 million. Of course a REIT is interested in returns though not necessarily capital gains. Average of 1500pm for an apartment and 100pm for parking (assuming 100% occupancy) gives a 6.5% return (before tax). Not a bad, if conservative investment. I can think of better places to put 64 big ones though.

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