As the trend of specialisation in Spanish REITs continues, Almagro Capital SOCIMI ups its bet on retirement-related properties. The listed fund has purchased two more flats in the Goya and Chueca neighbourhoods spending €1,240,000 on both.
The fund’s latest acquisitions includes a 40m² flat on Calle Belén which has traded at a price of € 140,000 as well as a flat on Calle Ayala, in Madrid’s Goya neighborhood with an area of 304m² which sold for € 1,100,000. For the acquisition of the latter, Almagro has arranged a mortgage with Spanish Bank Bankinter for an amount of € 550,000 with maturity in March 2034 and a fixed annual interest rate of 1.90%. In both cases, the former owners will remain as tenants in the property.
Almagro is one of the largest Spanish property funds focusing on residential assets for the elderly and made its debut on the Madrid Alternative Stock Exchange (MAB) last january. The company had previously declared it aimed to raise over €50 million to grow through acquisitions.
The case for Senior Living REITs is strong as the Spanish demographic gets older. Spain, in fact, is expected to overtake Japan as the country with the longest life expectancy by 2040. According to Investopedia, over 10,000 baby boomers are turning 65 every day and as many of these boomers age, they will seek to move into more suitable housing. The umbrella of senior housing ranges from senior-oriented facilities offering independent living options to those offering assisted care in many forms.
Almagro Capital was founded in 2017 by Luis de Ulíbarri, a former associate at Garrigues and partner of DLAU Abogados and José Nistal, a former principal at Alantra and senior associate in Lehman Brothers’ global private equity group. It is the first REIT launched by Orfila Management.
Almagro’s business model focuses on acquiring homes for the elderly whereby the vendors themselves become the tenants of their homes. These investments respond to an increasingly widespread problem in Spain that directly affects the elderly: 90% of people aged over 65 years live in a home that they own and 30% admit to struggling to make ends meet.