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New Build-to-Rent Joint Venture: Otero and Iberian Yield to Develop 1,000 Homes in Málaga

For the time being, they have already invested 21 million euros in the acquisition of two plots of land in the coastal city.

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For the time being, they have already invested 21 million euros in the acquisition of two plots of land in the coastal city.

Build-to-rent is still hungry. The Swedish firm Iberian Yield and the construction company Grupo Otero are closing a new joint venture that will invest in residential rental properties.

The joint venture, Lagoom Living, has equity to develop more than 1,000 homes and a pipeline of more than 1,500 units under study. For the time being, it has already acquired two plots of land, with a total buildable area of 8,203 square metres and an investment of 21 million euros, which would allow it to develop more than 400 homes.

The joint venture will be developed mainly in the Sánchez Blanca sector of Málaga, in the future residential neighbourhood of Distrito Zeta. This area has attracted significant interest by the large Spanish developers: Vía Ágora, Hábitat Inmobiliaria, Aedas and Urbania.

Developers seek solutions to save build-to-rent

Rental developments have low-profit margins. However, costs are higher than in build-to-sell. This, coupled with cost inflation, which has driven up the price of construction, means that margins are getting tighter and tighter.

In 2021, €1.617 billion was invested in new rental developments. The total volume, including all rental residential typologies, was €2.1 billion, 5% more than in 2020. By 2025, between 28,000 and 18,000 new rental properties are expected to enter the market; however, this distribution of new supply will not be uniform across all areas.

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