Spanish developer Neinor Homes goes public in sign of good times

Render of one of Neinor Homes developments on the Spanish coast

Render of one of Neinor Homes developments on the Spanish coast

Neinor Homes staged a successful public offering just a few hours ago. Things must be good if a Spanish developer is floating on the stock market, the first time this has happened in a decade.

Spanish residential property developer Neinor Homes went public at 12 noon today, and its shares rose 8% in the first hour of trading on the Bilbao stock exchange, then falling back to around 6%.

New home builder Neinor is the first Spanish developer to go public in a decade, and this is the biggest IPO in history for a residential developer in both Spain and Europe (I read in the Spanish press, so don’t hold me to that claim if it turns out to be wrong).

Neinor’s shares were floated at €16,46 per share giving the company a market cap of €1.3 billion, rising to €1.4 billion in the first hour of trading.

The offering of 60% of the company’s share capital was more than four times oversubscribed by local and international investors, with strong demand for Neinor Homes shares from the UK, the USA, France, Italy, and the Netherlands.

Neinor Homes was floated by the US investment fund Lone Star, which bought the company from the Basque lender Kutxabank in November 2014 for €930m, and quickly turned it into the biggest developer in Spain.

After its floatation Neinor is also now the biggest developer in Spain by market cap, dwarfing other quoted developers like Realia (€620m) and Quabit (€177m).

Spectacular Return on Spanish Real Estate

By betting on the Spanish real estate sector with Neinor, Lone Star have made a spectacular return on their €930m investment in less than three years. They have cashed in now to the tune of €1.3b and still own 40% of the company, which I assume is now worth around €870m, so total value of over €2b from an investment of €930m in less than three years.

It also makes a change to see positive headlines about a Spanish developer after a decade of remorselessly bad news, in which some of the biggest publicly quoted Spanish developers like Martinsa-Fadesa went to the wall.

Run by Juan Velayos, who participated on a panel of developers at a conference I organised late last year (pictured below), Neinor has a huge bank of building land in Madrid, Catalonia, the Basque Country, the Balearics, and Andalucia. They currently have 60 developments underway with 4,000 new homes under construction around Spain.

Left to right: Juan Velayos of Neinor Homes, marketing consultant Victor Sagué, Jan Maarten Goedemans of ARC Properties, Carlos Infantes of FHAUS/Grupo Elix, and Prof. José Luis Suárez of IESE

Left to right: Juan Velayos of Neinor Homes, marketing consultant Victor Sagué, Jan Maarten Goedemans of ARC Properties, Carlos Infantes of FHAUS/Grupo Elix, and Prof. José Luis Suárez of IESE

Several Neinor Homes developments will interest buyers from abroad due to their quality and location. I’m talking to the marketing director about showcasing them in my Spanish new developments section, and hope to have them listed in April. Sign up for my news bulletin to be kept informed.

About Mark Stücklin

Mark Stücklin is a Barcelona-based Spanish property market analyst, and author of the 'Spanish Property Doctor' column in the Sunday Times (2005 - 2008).

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