This is the fund that invests in giving homes to the homeless.

On March 4, 2021, Spain’s first social REIT (Exchange Real Estate Investment Company) was established. Association of Asocimi, Socimis and Hogar Si, It is a non-profit organization that wants to end. homelessnesslaid the foundations of the first investment tool aimed at providing access. living place inside rent economic to people in housing vulnerability.

“Our intention is to create affordable rentals by buying a home. We define ourselves as one social impact investingWe provide a social return on the one hand and a financial return on the other so that it can sustain itself,” explains Javier Basagoiti, president of Asocimi and one of the founders of Primero H. El Periódico de España.

The process is simple. Non-profit organizations such as Hogar Sí, Tengo Hogar or Fundación Lázaro are awarded a contract with the public administration to provide housing solution to people who do not need it. These NGOs authorize Primero H to buy the houses they need to do their business, and in return they sign a lease with Socimi.

“The biggest problem of social rental housing portfolios is Default rate between 35% and 50%. For this reason, we decided to rent the houses directly to non-governmental organizations. We are engaged in property management and we get returns of 1.5% to 2% per year, which is enough to support ourselves”, explains the founder of Inbest Real Estate manager.

apparent growth

The first social society in Spain is in full expansion. HE The immediate step will be to go public.will close in July this year on BME Growth, the former Alternative Stock Market. The company was established under the Socimis Act regime in September 2021 and has a two-year term to be listed on a regulated market. “The first thing we have to accomplish is to achieve a minimum capital of five million euros and for now we have four,” confirms Javier Basagoiti.

In March last year, he bought his first five houses in Madrid from Anticipa, Blackstone’s ‘service’ in Spain, which were leased to Hogar Sí for 490 euros per month. Subsequently, it expanded its portfolio to nine houses with an investment of approximately one million euros, which it realized entirely from its own resources. They’re also working on buying four or five more homes in the coming months. “We bought flats between 88,000 and 119,000 Euros. Our intention is to do this for an average of 100,000 euros, so that 400 to 500 euros can be rented per month,” summarizes the Asocimi president.

First H needs to purchase 170 homes in Madrid (100) and several municipalities (70) on the Island of Mallorca over the next three years: Palma de Mallorca, Inca and Manacor. Fulfilling this mission, led by Hogar Sí, will involve an investment of 15 million euros. The purchasing strategy is always buy messy houses, ie a maximum of one or two per building block. “We don’t want to create ghettos and so we make an elaborate purchase,” Basagoiti adds.

For now, all purchases are made with their own equity, but they will be able to finance them to get more investment capacity. They also open to non-monetary capital increasesthat is, with the contribution of real estate.

Investment with social impact

Basagoiti believes that the results of investments will be immediate: “The person who is given a house is the person who leaves the street, and we have already managed to buy five.. Although several municipalities offer to cooperate, we do all this on private initiative, not counting with the help of public administration for now. It’s not a Spanish invention, it’s already with great success in the UK or Australia.”

Investing in Primero H is an option for other Socimis. “They all need to dedicate 80% of their portfolio to rental assets, and investment in another community is deemed appropriate,” explains the president of the employers’ association. Now, The minimum amount required by the regulator is EUR 100,000, but is considering requesting a reduction of this amount to EUR 10,000.. In parallel, now that all investors have complied with the ESG among their investment criteria, they can do so with the ‘S’ of Social by dedicating a portion of their income or profits to investing in Primero H.

Others cooperate by offering their services to maintain the structure of Socimi. may exceed 300,000 Euros per year. These include Deloitte, EY, Gesvalt, Renta 4, Andersen, Gómez Acebo & Pombo, KPMG and Alquiler Seguro. Paulina Beato, first president of Primero H Ethics Committee, Red Eléctrica; Martha Areizaga; Grupo Eroski’s first female director of corporate social responsibility; Xavier Torra, President of Intermón OXFAM for 10 years; and Guillermo Massó, director of socimis.

Source: Informacion

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