On March 4, 2021, Spain witnessed the birth of its first social REIT, an Exchange Real Estate Investment Company. The association between Asocimi, Socimis, and Hogar Sí laid the groundwork for a novel investment instrument aimed at delivering affordable housing to people experiencing housing vulnerability, by combining ownership with targeted rental access.
“Our aim is to create affordable rentals by purchasing homes. We see ourselves as a social impact investor that delivers a social return and a financial return, so the model can sustain itself,” explains Javier Basagoiti, president of Asocimi and one of Primero H’s founders, as reported by El Periódico de España.
The process is straightforward. Non-profit groups such as Hogar Sí, Tengo Hogar, or Fundación Lázaro secure contracts with public authorities to provide housing solutions for individuals in need. These NGOs authorize Primero H to acquire the homes they require for their work, and in return they sign a lease with the socimi.
“The main challenge in social rental housing portfolios is a high default rate, estimated between 35% and 50%. To address this, we rent properties directly to non-governmental organizations. We take responsibility for management and aim for annual returns of about 1.5% to 2%, sufficient to keep the operation self-sustaining,” says the founder of Inbest Real Estate, the project’s manager.
apparent growth
The first social enterprise in Spain is rapidly expanding. A key next step is going public, with a planned listing on BME Growth, the market formerly known as the Alternative Stock Market, by mid-year. The company began operating under the Socimis Act framework in September 2021 and has a two-year window to be listed on a regulated market. Basagoiti notes, “Our immediate target is a minimum capital of five million euros; we currently stand at four.”
Last year, the portfolio took its first five Madrid homes from Anticipa, Blackstone’s Spain-based service, leased to Hogar Sí for about 490 euros per month. The portfolio soon expanded to nine homes, representing roughly one million euros of investment, funded entirely from internal resources. Plans are in motion to acquire four or five more properties in the coming months. “We have purchased flats ranging from 88,000 to 119,000 euros, aiming for an average around 100,000 euros so that rents of about 400 to 500 euros a month are feasible,” summarizes Basagoiti.
Over the next three years, Primero H intends to accumulate 170 homes in Madrid (100 units) and across several municipalities on Mallorca (70 units), including Palma de Mallorca, Inca, and Manacor, corresponding to an investment target of about 15 million euros. The strategy emphasizes buying then renovating units that need attention, avoiding the creation of ghettos by limiting purchases to one or two homes per building. Basagoiti adds, “We deliberately curate acquisitions to ensure cohesive, livable neighborhoods.”
Currently all purchases are financed from equity, but the plan is to leverage financing to expand capacity. The project also welcomes non-monetary capital increases, including contributions of real estate assets, to broaden investment potential.
Investment with social impact
Basagoiti expects tangible outcomes from the investments: “The moment a person receives a home, they leave the streets behind. We have already closed five acquisitions.” While several municipalities offer cooperation, the initiative remains driven by private action rather than public administration at this stage. The model draws inspiration from successful examples in the United Kingdom and Australia, translating those experiences into a Spanish context.
Investing in Primero H emerges as a viable option for other socimis. “Many need to allocate around 80% of their portfolio to rental assets, and expanding into new communities can be appropriate,” notes the president of the employers’ association. The regulator’s minimum investment threshold currently stands at 100,000 euros, though there are discussions about lowering it to 10,000 euros. As ESG priorities become standard, investors can also fulfill the social criterion by directing a portion of earnings toward Primero H.
Several partners support the structure with services that could exceed 300,000 euros annually. Firms contributing to the ecosystem include Deloitte, EY, Gesvalt, Renta 4, Andersen, Gómez Acebo & Pombo, KPMG, and Alquiler Seguro. The initiative also involves leaders from the broader social and corporate world, such as the first president of the Primero H Ethics Committee, policymakers from Red Eléctrica; notable figures from Grupo Eroski, Intermón OXFAM, and other CSR leaders who have connected with the project.