Blackstone Group LP and Goldman Sachs Group Inc are weighing separate bids for 1,500 Spanish rental homes that are being sold by the nation’s largest real estate investment trust, according to two people with knowledge of the matter.
Merlin Properties Socimi SA has asked investors to submit non-binding bids for the portfolio by Nov. 10 and a sale is expected to be agreed before the end of the year, according to the people, who asked not to be named because the matter is private. Spokesmen for Blackstone, Goldman Sachs and Merlin all declined to comment.
Blackstone, owner of the biggest single-family rental home business in the U.S., and New York-based Goldman Sachs have been building residential portfolios in Spain, betting that the housing market has bottomed after values dropped more than 40 percent. Home prices rose in October, the first monthly increase from a year earlier since 2008.
Merlin bought the 1,500 homes as part of its purchase of Testa Inmuebles en Renta SA from Sacyr SA for 1.79 billion euros ($1.95 billion). The rental homes were valued at 276 million euros at the end of last year, according to Testa’s 2014 annual report. Almost 95 percent of the units are currently occupied and more than a thousand of them are in Madrid, according to the report. The remainder are situated in Toledo and San Sebastian.
Merlin Chief Executive Officer Ismael Clemente said in an interview in July that he would dispose of non-core assets such as homes and hotels to focus on boosting commercial properties such as offices. logistics and shopping malls.
Blackstone bought 1,860 rental homes from local authorities for 125.5 million euros in 2013 and the same year a Goldman Sachs venture acquired 3,000 low-income apartments from the city of Madrid.