Banco Santander prepares a new €200M residential development fund, expanding from co‑living and retail to accelerate housing supply and mixed‑use projects.
Banco Santander is preparing to launch a new real estate fund dedicated to residential development, marking the bank’s first fund from its manager specifically focused on building housing. The vehicle, expected to start rolling in the coming months, aims to raise around €200 million and joins Santander’s existing real estate strategies that target co-living, temporary accommodation and commercial assets.
Santander has already seen traction in adjacent segments: it gathered €220 million for co-living through two vehicles and set a €150 million vehicle for commercial assets. For the new residential fund, the bank plans to participate directly, committing capital from its own balance sheet and structuring leverage in the range of 50–60%, consistent with its prior funds.
The move complements Santander’s broader exposure to the housing market beyond this new vehicle. The bank maintains lending activity in mortgages and developer and corporate loans, operates a real estate debt fund, and holds significant stakes in property companies. Santander is the largest shareholder in Metrovacesa with a 49% stake and owns 100% of LandCo, the country’s largest private land company. It also holds a 22.3% stake in REIT Merlin Properties and operates RetailCo, its commercial-asset manager.
Alberto Quemada, the executive leading Santander’s real estate efforts, said the bank is preparing sites and defining the portfolio perimeter and expects to be ready to seek a co-investment partner by the first quarter of 2026. Last year Santander partnered with Patron Capital to invest €100 million to develop more than 1,300 homes, an example of the co-investment strategy the bank may replicate for the new fund.
Separately, Santander Alternative Investment — the manager within Santander Asset Management — has launched a retail-focused real estate investment fund that aims to raise €150 million and could invest up to €300 million in retail assets. That vehicle, managed by RetailCo (a subsidiary set up in 2021 to manage former bank-branch premises), received approval from Spain’s CNMV in December. Grupo Santander will commit roughly €30 million — about 20% of the targeted raise — according to company sources.
Taken together, these initiatives signal Santander’s intensified push into diversified real estate strategies: from co-living and temporary accommodation to housing development and retail platforms. The bank is leveraging ownership stakes, on‑balance-sheet capital and third‑party fundraising to accelerate development pipelines and retail acquisitions while managing risk through leverage and potential co-investment partners.
