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Neinor Homes: How to Become a Rental Home Giant

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The portfolios of Blackstone, the largest landlord in Spain, and Testa Residencial, the heir of the former Vallehermoso, each contain less than 20,000 rental homes. But if Neinor Homes fulfils its plans, to create a portfolio of 5,000 rental homes distributed in the country’s main towns and cities, then it will become an indispensable player in the rental market.

To begin, the property developer has created a new division, Neinor Rental, through the EDAV (entities dedicated to rental homes or “entidades dedicadas al arrendamiento de viviendas”) formula. These vehicles enjoy a series of tax benefits such as a lower rate of Corporation Tax (3.75%) and of transmission VAT (4%). Initially, Neinor will engage a third party to manage its rental homes; in fact, the company has already submitted a shortlist of potential names to the Board. In parallel, – as the CEO of the company explained during the presentation of the results for 2019 on Wednesday -, an internal area will be created to learn how to handle the work inhouse.

Next, Neinor has designed a staggered delivery plan. The first phase of this new line of business will see 611 rental homes go on the market in four locations: Málaga (113), Valencia (214) and another 284 in the Madrilenian towns of San Sebastián de los Reyes and Parla. They will be ready in 2021 and 2022.

In the second phase, which is already being designed, according to the CEO, Borja García-Egotxeaga, another 1,200 homes will be constructed; and over the long term (five years), the objective is to reach 5,000 units.


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