Fondviso, an alternative investment fund of the Solventis group, has offered to the Catalan public administrations, city councils and Generalitat, to invest 500 million euros in building more than 3,100 affordable rental homes in the community. “We have been maintaining contacts for years and a half and we have detected great interest, in administrations of all political colors,” said Toni Bosch, director of alternative real estate investments at Solventis.
This together with Juan Carlos Canudo, the general director of the firm, explained this morning that the fund has designed a business model that plans to build homes on land donated by public administrations or individuals and transfer them to the administrations so that they can develop their policies. in exchange for a fixed annual remuneration for a period of more than 30 years, which would allow it to give its investors a net return of more than 7%.
According to Bosch, the Fondviso proposal assumes that “the administration does not make any investment, but rather manages the rental of the homes, and assumes the management costs and risks with the tenants (delinquency, possible vacancy, etc.), while the fund will be in charge of the construction and maintenance of the properties. After that period, the infrastructure will once again belong to the owner of the land, be it the administration or a private owner.”
According to Toni Bosch, the model proposed by the fund means that “with the same investment effort, that is, the 350 million euros in direct investment foreseen by the Generalitat's plan in the coming years, the Government could quintuple the capacity of development of the affordable housing stock. In this way, it could add between 16,000 and 18,000 more homes to the current affordable housing stock, instead of investing directly in the development of homes.”
Fondviso directors have explained that their proposal “proposes a new model of public-private collaboration” and “will contribute to creating a publicly managed and privately owned housing stock, without generating debt or consuming public resources.” In his opinion, the fund could put apartments on the market in which tenants would see “the cost of habitation” reduced by 30%, a concept that includes rental income, energy and water costs, and maintenance expenses. .
The target population would be young people and the middle classes, with incomes between 28,000 and 45,000 euros, "who cannot afford to pay a market rent but do not meet the requirements to obtain social housing." In his opinion, this formula “is a new way to combat the low public supply of social and affordable rentals in Spain, which stands at 1.6% of the total, in Catalonia at 1.83%, compared to 15%. on average in Europe.”
Fondviso is a closed-type collective investment fund, approved in June by the National Securities Market Commission (CNMV), to invest in affordable social housing. The fund plans to raise up to 650 million euros, and assume debt worth up to 70% of its own funds to be able to build up to 12,000 affordable rental homes in Spain in the next 10 years.
The directors explained that they expect their investors to be insurance companies and other institutional investors, who want a profitable but socially responsible investment, "with the added value of betting on a project with social impact, committed to the environment and the progress of society." The firm plans to carry out the first closing, with around 200 million in capital, between January and March of next year.
Solventis is a Spanish independent financial group, with headquarters in Barcelona and offices in Madrid and Vigo, founded in 2002 by professionals from investment banking and which has a staff of 70 people.