3 Min Read
(Adds details, CEO comment)
By Sonya Dowsett
MADRID, March 29 (Reuters) - Shares in Spanish homebuilder Neinor Homes rose on Wednesday on their first day of trading on the Spanish stock exchange in the biggest European flotation of a residential developer in a decade.
Neinor's stock market debut, valuing the company at 1.3 billion euros ($1.4 billion) at the listing price, signals the recovery of Spain's property market after a devastating crash 10 years ago led to the country's worst recession of modern times.
Shares in the Bilbao-based company were 6.2 percent higher at 17.48 euros at 1004 GMT, shortly after the shares opened for trade.
The initial public offering (IPO), in which U.S. private equity fund Lone Star will sell up to 60 percent in the homebuilder, was more than four times oversubscribed. Funds raised from an accompanying cash call will be used to pay down debt and buy land for building.
The property market recovery in Spain has been patchy with demand in big cities like Madrid and Barcelona and coastal resorts contrasted with a glut of unsold properties in underpopulated central Spain, many owned by banks who lent to property developers who then went bust during the crash.
Neinor has concentrated on buying land and building homes priced between 100,000 euros and 250,000 euros in areas with demand like Madrid, Barcelona and the Basque Country. It plans to build between 3,500 and 4,000 homes annually by 2020.
"There is limited supply in areas with strong demand. That is the rationale - we are buying land and developing new homes in these areas," Chief Executive Officer Juan Velayos said in an interview on Wednesday.
Neinor's flotation is the third planned IPO out of Spain so far this year as companies take advantage of buoyant stock markets. Spain's leading stock market index has risen almost 11 percent since the start of the year.
Spain's economy has powered out of recession over the last three years, boosted by consumer spending, to outperform the euro zone average in terms of growth. Unemployment has fallen by a third since the height of the crisis.
Cash-in-transit company Prosegur Cash listed on March 17 and car parts maker Gestamp IPO-GEAU.MC is due to float on April 7 in what is expected to be the largest European IPO this year so far. ($1 = 0.9267 euros) (Editing by Paul Day and Susan Thomas)