Executive overview of flex living investments
Santander Alternative Investments, the investment arm dedicated to alternative assets at Banco Santander, has partnered with Aedas Homes to develop two coinvested flex living and co-living complexes in Madrid and Valencia. Market sources, including ACTIVOS, the economic desk of Prensa Ibérica, have confirmed the arrangement.
Santander Real Estate Equity I will provide 90 percent of the funding for the two buildings through a vehicle created recently in the Equity Real Estate unit, led by Joaquín Linares, with a planned investment capacity of up to 90 million euros in student housing and flexible accommodations. Aedas will contribute the remaining 10 percent after structuring the deal through the promoter’s Real Estate Services department, guided by David Botín.
The two developments will deliver a 190-apartment project in the Valdemarín area within the Moncloa-Aravaca district and a 158-unit complex in Valencia, near the Marina de Empresas hub. Both sites are slated to start welcoming residents in 2027, with third-party management arranged for day-to-day operations.
While the exact coinvestment amount has not been disclosed, estimates place the total around 60 million euros. Neither Aedas Homes nor Santander Asset Management commented publicly. Previously, the promoter disclosed investing seven million euros to acquire land alongside Juan Roig’s incubator. Over the coming years, the assets will be developed with promoter risk and, once stabilized and occupied, sold to an institutional investor.
Appetite for flex living
Flex living represents a newer investment category in real estate, closely related to aparthotels. These are typically built on non-residential land, tend to be cheaper and more plentiful, and are leased for shorter periods than traditional homes. Leases usually run under a year, offering greater flexibility for both tenants and owners, while being governed by urban rental laws that set minimum terms for conventional housing.
The lower upfront costs, higher potential returns, and tighter rent control on these assets have driven demand in recent years. Large funds such as Greystar, M&G, Stoneweg, Stoneshield, and Dazia Capital have already positioned themselves in the space, with Santander’s alternative investments division and Aedas Homes joining in, the latter focusing on traditional housing development rather than pure student or flexible living concepts.
Industry observers anticipate Spain will exceed 25,000 flex living apartments before 2027, up from fewer than 12,000 currently operational. The primary driver is robust rental demand and the appeal of flexible services and amenities that accompany these properties.
Focus on coinvestment
In recent months, Aedas Homes has accelerated its coinvestment activities, which involve developing real estate backed by third-party capital. In February of this year, the company closed a similar vehicle with the British investment fund King Street to invest around 270 million euros in for-sale housing development. The strategy provides a compelling return by boosting revenues without making large new capital commitments, thereby improving overall profitability.