Barings to deliver 188 affordable rental units in Madrid

Barings has finalised a forward commitment with Grupo Ferrocarril, a Spanish developer specialising in affordable housing.

José Carlos Torres

This turnkey agreement involves the development of 188 Build-to-Rent (BtR) affordable housing units in Valdebebas, Madrid, with an anticipated total investment exceeding €56 mln.

Under the terms of the agreement, Grupo Ferrocarril will manage the entire development process, from architectural design and technical management to urban planning and construction. Once completed, Barings will acquire the property and incorporate it into its European living portfolio, taking on its long-term management. Construction is set to begin in the first quarter of 2027, with completion expected in 2029.

The development, located in Valdebebas, a key growth area in Madrid, will offer 188 homes with one, two, or three bedrooms. Spanning approximately 19,000 square meters, the project will include parking, storage, a swimming pool, and communal gardens. The building is designed with strong sustainability in mind, aiming for a BREEAM 'Very Good' certification.

This deal follows Barings' recent living sector activities in Barcelona and Madrid, including a forward commitment for 305 affordable BtR homes in Los Cerros, Madrid, in partnership with Aurora Homes.

Last year, Barings Real Estate completed €310 mln in transactions in the Iberian market, covering core-to-value-add strategies across the living, logistics, office, and retail sectors.

This transaction is part of Barings' broader commitment to the European living sector, with €512 mln already committed or under exclusivity for 2026, building on the €580 mln deployed in 2025.

José Carlos Torres, managing director, country head Iberia at Barings Real Estate, said: “Following a record year for Barings Real Estate in Iberia, with strong transaction volumes across our core sectors, this investment in Valdebebas demonstrates our ability to continue sourcing and executing high-quality opportunities in a challenging market environment.”

Gunther Deutsch, managing director, head of European Real Estate Transactions at Barings, added: “Spain, the Nordics, Italy, and Germany continue to offer compelling opportunities this year within the BtR and BtS living sector, supported by strong fundamentals and a pronounced structural undersupply of quality rental housing. We would like to expand our pipeline with further transactions across the risk spectrum from core-to-value-add, as well as through forward transactions or developer JVs.”