FIXED INCOME PRESENTATION - March 2020 - Merlin Properties
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FIXED INCOME PRESENTATION March 2020
DISCLAIMER
This presentation has been prepared by Certain statements in this document presentation in other jurisdictions may RELIED ON IN CONNECTION WITH ANY
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ı2ı
Contents Strategy Positioning Value Creation Capital Structure Sustainability
History |
SIX INTENSE YEARS TO POSITION MERLIN AS THE LEADING SPANISH REIT
AND AMONG THE TOP 10 EUROPEAN REITS
2014 2015 2016 2017 2018 2019 2020
Acquisition Sale Sale of 26
of Tree of hotel non-core
portfolio Acquisition Acquisition portfolio Investment in Acquisition office Contribution
(888 BBVA Acquisition of 47 assets Acquisition of of 40 and 10 Acquisition refurbishment Acquisition Sale of Testa of 3 assets building of 3 non-core
branches) of 12 assets and ZAL Port Metrovacesa assets assets of 11 assets & development of 6 assets & non-core in Portugal & other retail assets
€ 740M € 544M € 331M € 1.7bn € 812M € 761M € 388M € 109M € 570M € 594M € 125M € 281M € 173m
July June Dec. Nov. Feb
2014 2014 2015 2016 2016 2016 2017 2017 2018 2018 2019 2019 2020
June Dec. May Dec. Dec. Feb. 2016 Oct. 2017 Feb. Dec. Apr. Nov. Jan.
2014 2014 & July 2015 2015 2016 2016 2018 2018 2019 2019 2020
2015
€ 1.3bn Refinancing € 1.7bn Inclusion Refinancing BBB 2 bond Baa 2 2 bond BBB Refinancing ESG 1 bond Listing in
IPO of Tree debt Capital in IBEX 35 of Testa S&P issuances Moody’s issuances positive of Tree debt Indexed issuance Euronext
€ 940M increase Index debt rating € 1.7bn rating € 900M outlook € 717m financing € 0.5bn Lisbon
€ 1.7bn S&P € 1.55bn
rating
ı4ı
MERLIN today | Overview
LARGEST AND MOST DIVERSIFIED SPANISH REIT
Fast facts Portfolio breakdown Capital structure
932 6% > € 6.0bn
ASSETS (1) 10% MARKET CAP
€ 12.8bn € 7.3bn / € 15.60
15% 50%
GAV by GAV (2) EPRA NAV PER SHARE
€ 509m 40.6%
GRI 19% LTV
4.3m sqm 3%
6.4 years
GLA OWNED (1)
11%
AV. MATURITY
95% 2.09%
OCCUPANCY RATE 17% 46% AV. INTEREST RATE
by GRI(1)
4.5% BBB
GROSS YIELD STANDARD & POOR’S
23%
5.6 years Offices Shopping Centers Net leases
Baa2
WAULT MOODY’S
Logistics Other(3)
Company FY19 (Post disposal of 3 secondary retail assets)
(1)
Fully consolidated excluding assets where MERLIN holds a minority stake. Plaza de los Cubos has been reclassified as offices (formerly 21 retail units)
(2)
GAV of land under development and NAV of equity method included in its respective category (offices, shopping centers and logistics). Excluding DCN loan
(3)
Includes 3 hotels, non-core land and miscellaneous
ı5ı
Strategy
Strategy | Strategy pillars
A CLEARLY DEFINED STRATEGY INSPIRED BY THE BEST REIT PRACTICES
Office Shopping Centers
45 %
Breadth of prime space Core & Core Plus
20 %
Urban or Dominant
Madrid, Barcelona and Lisbon Spain & Portugal National scale
Best Investment
governance grade
practices capital
structure
One of Dividend
the world’s policy:
most cost 80% of
efficient AFFO
Logistics REIT’s Net leases
20 %
National footprint
15 %
High triple net cash flow
“One-stop shop” solution for 3PL Inflation multiplier
ı7ı
Strategy | Asset categories evolution (by GRI)(1)
LOGISTICS, THE FASTEST GROWING ASSET CATEGORY SINCE 2014
2014 2018 2019 PF(2)
(1)
5 %
3 % 2
%
12% Hoteles
10% Hoteles
17%
Residencial en alquiler Residencial en alquiler
14% 69% Otros
17% 46% Otros
15% 45%
Logístico Logístico
Oficinas High Street Retail
Centros comerciales Centros comerciales
High Street Retail Oficinas
24 %
21%
(1)
Offices Net leases Shopping centers Logistics Other
(1)
Other includes hotels, non core land and miscellaneous
(2)
Pro-forma to include the value creation plans
ı8ı
Strategy | Exposure to Portugal
PORTUGAL HAS GAINED RELATIVE WEIGHT IN MERLIN’S PORTFOLIO
Offices Shopping centers Logistics
NT
ME
ISH
RB
FU
RE
R
DE
UN
Monumental Marqués Pombal 3 Lisboa Expo Torre Lisboa Nestlé HQ Almada Lisbon Park
22,387 sqm 12,460 sqm 6,740 sqm 13,715 sqm 12,260 sqm 60,098 sqm 224,864 sqm
Central Office Torre Zen Art TFM
10,310 sqm 10,207 sqm 22,150 sqm 7,837 sqm
Key metrics
GRI (€m) 20.6(1) 24.2
% GRI / MERLIN asset class portfolio 8.7% 19.5%
GLA (sqm) 118,066 60,098
% GLA / MRL asset class portfolio 8.9% 11.0%
Occupancy rate (operating) 100% 99.8%
GRI (€m) % GRI / MERLIN portfolio Occupancy rate
Exposure
to Portugal 44.7 8.8% 100%
ı9ı
(1)
Monumental has been vacated for the refurbishment
Positioning
Positioning | Fast facts
#1 REIT ACROSS ALL ASSET CATEGORIES WHERE MERLIN OPERATES
FULLY CONSOLIDATED(1)
124 ASSETS(2)
#1
•F lexibility to offer multitenant
or headquarter buildings
1,319 K SQM
• Capacity to adapt to the needs
Offices of the tenant
€ 6.2 BN GAV
€ 237 M GRI
MINORITY STAKES(3)
TRES AGUAS 50%
#1 •M ainly urban footprint in high GDP/
capita areas in Spain
14 ASSETS
461 K SQM
1 ASSET
68 K SQM
Shopping • Reference landlord for top retailers € 2.4 BN GAV
Centers • Critical mass with retail brands € 116 M GRI
€ 9 M GRI
• “ One-stop-shop” solution for
Existing WIP ZAL PORT 48.5%
#1 logistics operators wishing to
operate across Spain
• Big footprint to match the rapid
47 ASSETS
1,160 K SQM
12 PROJECTS
1,002 K SQM
50 ASSETS
469 K SQM
Logistics development of 3PL activity
€ 0.9 BN GAV € 0.6 BN GAV (+258 SQM WIP)
€ 55 M GRI € 45 M GRI € 46 M GRI(4)
(+€ 22 M GRI WIP)(4)
#1 •E
xcellent conditions of BBVA lease
agreement: triple net lease with
715 ASSETS
363 K SQM
Net leases 1.5x HICP annual uplift
€ 1.9 BN GAV
€ 87 M GRII
(1)
Y19 reported figures + Plaza Cataluña + Contribution of 3 secondary retail assets to Silicius
F
(2)
Plaza de los Cubos has been reclassified as offices (formerly 21 retail units). Including plaza cataluña 9 acquired in January 2020
(3)
Data for Minority Stakes is reported for 100% of the subsidiary
(4)
Pre canon ı 11 ıPositioning | Offices overview
PRIME SPACES IN BOTH CBD AND NBA OFFERING A WIDE VARIETY OF SOLUTIONS TO CLIENTS
Fast facts Breakdown
Reversion in MVC assets
By geography By location By product
Otros
# ASSETS 124 Lisbon
Barcelona
GLA (sqm) 1,319 k By GAV Madrid By GAV By GAV
GAV (€ M) 6,161(1)
GRI (€ M) 237
• Madrid 75% • Prime + CBD 51% • Multi tenant 68%
GROSS YIELD 4.1% • Barcelona 15%
• Lisbon 9%
• NBA 40%
• Periphery 9%
• Single tenant 32%
• Other Spain 1%
OCCUPANCY 93%
971K MAD
208K BCN
118K LISBON
Top 10
tenants
Excluding office land for development
(1)
ı 12 ıPositioning | Shopping Centers overview
URBAN AND DOMINANT ASSETS OFFERING NATIONAL SCALE IN HIGH GDP/CAPITA AREAS
Fast facts Breakdown(5)
Reversion in MVC assets
Fully Tres
Consol. Aguas (1) By geography By type By size(2)
# ASSETS 14 1 Other
461 k 68 k
Andalusia
GLA (sqm)
Valencia
GRI (€ M) 116 9 By GAV Galicia By GAV By GAV
Catalonia
GAV (€ M) 2,367(3) Madrid
4.9%
Lisbon
GROSS YIELD •Madrid 23% •Valencia 10% • Urban 58% • Extra-large 34%
• Lisbon 21% • Andalusia 7% • Dominant 37% • Large 32%
OCCUPANCY 93%(4) • Catalonia 11% • Other Spain 15% • Secondary 5% • Medium 19%
• Galicia 13% • Small 15%
ANNUAL
FOOTFALL 103 m pax
Top 10
tenants
(1)
100% of Tres Aguas of which MERLIN owns 50%
(2)
As per the definition of AECC (Spanish Shopping Center Association)
(3)
Including WIPs at book value
(4)
Excluding X-Madrid, Monumental and retail units under development ı 13 ı
(5)
Portfolio in operations. Excluding the assets contributed to SiliciusPositioning | Logistics overview
NATIONAL FOOTPRINT IN MAIN LOGISTICS HUBS
Fast facts Breakdown
Reversion in MVC assets
Existing WIP By reach By
OtherOther
Spain tenant
Spain type
Consolidated ZAL Port(1) Consolidated ZAL Port(1) OtherBasque country
Spain Basque
Other Spain
country
BasqueSeville
country Basque country
# ASSETS 47 44 12 6 Seville
Seville Seville
Barcelona
Barcelona
GLA (Sqm) 1,160 k 469 k 1,002 k 258 k By GAV Barcelona BarcelonaBy
MadridMadrid
GAV
+2.9m sqm under management Madrid Madrid
GAV (€ m) 939 553
• Madrid
•• Madrid
57%57%
Madrid 57%• Madrid 57% • National
National • National
39%
• National
39% 39% 39% • 3PL•mono-client
• 3PL
3PL•mono-client
3PL 40% 40% 40%
mono-client
mono-client 40%
GRI (€ m) 55 46(2) 43(3) 22
• Catalonia
•• Catalonia
(3)
25% •
25%
Catalonia 25% Catalonia 25% • Ports 32% •
• Ports 32%
Ports 32% Ports 32% • 3PL • 3PL •
multi-client 39%
• 3PL multi-client 39%
multi-client 39%
3PL multi-client 39%
••• Basque
• Sevilla 6% 6% • Sevilla 6% •• Regional • Regional • End•user • End
Sevilla 25%
25% 25% 21% user 21%
Sevilla 6% Regional
• Regional 25% End End21%
•user user 21%
• 5% Country 5%• Production related
•
GROSS YIELD 5.8% 7.8% • Basque
•• Other
Country
Country
Basque
Basque
5%
• Other5%
Country
Spain 7% Spain 7%
• Production 4%
Production
related
• Production related
related 4%
4% 4%
• Other Spain 7%
• Other Spain 7% By geography
OCCUPANCY 98% 98% n.a. 100% Other Spain
Basque National
country 39%
• Madrid 57% •
• Catalonia 25% Seville
• Ports 32%
By GAV • Sevilla 6% • Regional 25%
Barcelona
• Basque Country 5% • Production relat
Madrid
• Other Spain 7%
• Madrid 57% • National 39% • 3PL mono-client
• Catalonia 25% • Ports 32% • 3PL multi-client
• Sevilla 6% • Regional 25% • End user 21%
• Basque Country 5% • Production related 4%
Top 10 • Other Spain 7%
tenants
(1)
Figures reported for 100% of ZAL Port
(2)
Gross annual rent as of 31/12/19, pre ground lease expenses
(3)
Total expected gross rents. GAV includes acquisition cost plus estimated Capex ı 14 ıPositioning | GAV summary PF FY19(1)
Gross yield 4.1% 4.9% 4.9% 5.8% - 4.5%
12,751
12,094
6,161
GAV
TOTAL with minority stakes
(€ million)
Shopping centers
2,367 1,873
Minority stakes
Net leases
Logistics
Other(2)
Offices
TOTAL
939 754
657
€/sqm AG 4,846 5,198 5,167 809 2,599
Source: Company
(1)
PF post desconsolidation of 3 secondary retail assets
(2)
Other includes logistics WIP, office WIP, land for development, non-core land and miscellaneous
ı 15 ıPositioning | Occupancy and WAULT PF FY19(1)
100%
95% 98%
93%
95%
AVERAGE
OCCUPANCY
18.4
5.6 years
3.0 4.0 AVERAGE
WAULT
2.4
Offices Shopping centers Logistics Net leases
(1)
PF post desconsolidation of 3 secondary retail assets
ı 16 ıPositioning | Trading update FY19 Reported
VERY GOOD PERFORMANCE AND PROSPECTS ACROSS THE BOARD
Rent LfL sqm Release
#contracts
YoY(1) contracted spread(3)
Office +7.3% 346,548 +7.2% 180
Shopping Centres +3.1% 78,306(2) +4.2% 139
Net leases +1.2% - - -
Logistics +3.6% 258,638 +7.6% 6
Other (1.8%) - - -
TOTAL +4.5% 683,492 325
(1)
ortfolio in operation for the FY19 (€ 463.7m of GRI) and for the FY18 (€ 443.6m of GRI)
P
(2)
Excluding X-Madrid
(3)
LTM Change in rent in renewals and relets ı 17 ıValue creation
Value creation | Growth Plans 2018-2022
Offices Shopping Centers
LANDMARK I PLAN FLAGSHIP PLAN
Upscaling refurbishments Converting our shopping centers
to create “prime within the prime” Organic in the flagship store of online retail
growth
SELECTED € 536m € 220m DEVELOPMENT OF “X”
DEVELOPMENTS A BRAND NEW CONCEPT
Designed Internally
by signature funded
architects
Logistics include
forward purchase,
Logistics spec development Net leases
BEST II PLAN € 328m and built to suit TREE
Lever on inflation growth
BEST III PLAN € 317m(1)
Development of the best footprint
in the Iberian market
(1)
Including € 154m investments post 2022 (San Fernando III, Lisbon Park and Valencia)
ı 19 ıValue creation | Landmark I - Update
0%
%
%
ED
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%
95
82
0%
28
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PR
PR
Torre Torre Marqués de Castellana Diagonal Plaza Ruiz Adequa Adequa
Monumental
Charmartín Glòries Pombal 3 85 605 Picasso 4 7
GLA (sqm) 18,295 37,614 12,460 15,254 13,244 22,387 31,576 15,793 32,109
Acquisition
(€m) 31.2 142.0 - - - - - 28.2 64.5
Capex (€m) 38.0 26.7 1.6 32.1 8.7 34.8 50.3 16.8 61.5
Rent (€m) 4.3 11.8 0.2 2.6 1.3 3.3 6.3 3.6 8.3
Yield on Cost 6.2% 7.0% 9.4% 8.1% 15.5% 9.4% 12.6% 7.9% 6.6%
Delivery 2019 2019 2020 2020 2020 2021 2022 2022 2022
Total Acquisition Total Capex Total investment Pending Capex Additional Rents Yield on Cost
€ 266.0m € 270.5m € 536.4m € 175.5m € 41.7m 7.8%
Already captured To come
€ 4.5m € 37.2m ı 20 ıValue creation | Landmark I - 2019 Deliveries
Torre Glòries Torre Chamartín
Returns Tenants Returns Tenants
• Acquisition € 142.0m • 100% Let • Acquisition € 31.2m • 100% Let
• Capex € 26.7m • Capex € 38.0m
• Total investment € 168.7m • Total investment € 69.2m
• ERV € 11.8m • ERV € 4.3m
• Yield on cost 7.0% • Yield on cost 6.2%
(vs 6.5% underwriting) (vs 6.2% underwriting)
ı 21 ıValue creation | Madrid Nuevo Norte
ACQUISITION OF A STRATEGIC STAKE IN DISTRITO CASTELLANA NORTE, THE FUTURE OF MADRID PRIME CBD
Phase I Phase II Phase IV a
Phase IV b Phase III
Central Business Fuencarral
Tres Olivos Las Tablas
Station District Malmea
Madrid Nuevo Norte (MNN)
Offices 1,220k sqm Offices 392k sqm
Residential 260k sqm 791k sqm
Residential
Total Madrid Nuevo Norte
Total buildability 2,662k sqm Total residential buildability 1,051k sqm
Total office buildability 1,611k sqm
The Project Distrito Castellana Norte (DCN)
• Largest development in Europe with a total investment of € 6bn DCN is the largest owner of the
• Future Prime CBD area in Madrid with second-to-none fast development, with a total buildability
connections by air or train of 1.2m sqm, 81% of which has office
use and 19% residential
• Comprises 4 independent phases, one of which could be divided
in two sub-projects 14.46% MERLIN Properties stake ı 22 ıValue creation | Madrid Nuevo Norte
THE MOST AMBITIOUS REAL ESTATE SCHEME IN EUROPE
ı 23 ıValue creation | Flagship - update
ED
ED
ED
ED
ER
ER
ER
ER
IV
IV
IV
IV
EL
EL
EL
EL
D
D
D
D
Arturo Soria
Larios X-Madrid Tres Aguas(1) El Saler Porto Pi Callao 5
Plaza
GLA (sqm) 41,460 7,054 47,170 67,690 47,471 58,779 11,629
GLA MERLIN (sqm) 37,957 6,069 47,170 33,845 28,861 32,963 11,629
Works: 27.5 Works: 46.4 Works: 24.0 Works: 26.6
Capex (€m) 5.4 12.1(1) 20.5
Ad. GLA: 19.9 Investment: 10.5 Ad. GLA: 12.0 Ad. GLA: 15.2
Rent (€m) 3.1 0.6 5.2 1.4(1) 1.9 1.7 3.9
Yield on Cost 6.6% 11.3% 9.1% 11.2% 5.2% 4.2% 18.9%
Delivery 2019 2019 2019 2019 2020 2021 2021
∆ GLA + X-Mad inv. Total Capex Total investment Pending Capex Additional Rents Yield on Cost
€ 57.5m € 162.6m € 220.1m € 86.0m € 17.7m 8.1%
(1)
Only including MRL 50% Already captured To come Equity method(2)
(2)
Equity method investments are not included in the GRI € 4.0m € 12.3m € 1.4m ı 24 ıValue creation | Flagship value creation: X-Madrid achieving high pre-leasing rate
X-MADRID: A NEW CONCEPT RECENTLY LAUNCHED
Comercialization status We have turned the mix upside down: 70% experience / 30% retail
95%
commercialized as of February
Climbing Harley Bowling Spanish > 1,500
Spanish cup gathering Tournament freestyle cup surfers
Tenants demanding
more space
> 1.2 million visitors since opening (less than 2 months)
ı 25 ıShopping Centers | Flagship - Larios and Tres Aguas
Larios Tres Aguas
• Total investment 47.3m(1) • Top-of-mind mall for • Total investment € 12.1m(2) • Occupancy gain of + 900
• ERV € 3.1m retailers in Malaga • ERV € 1.4m(3) bps after the refurbishment
• Yield on cost 6.6% • Full occupancy • Yield on cost 11.2% • After reform, the center
(vs 6.4% underwriting) • After reform the center (vs 15.1% underwriting) has achieved the highest
is achieving the highest sales in 5 years
footfall in 6 years
•N
ew tenants(3) • Renewals • Anchor tenants • New tenants
21 contracts 15,518 sqm 11 contracts 2,885 sqm are upscaling and
upgrading their units
ı 26 ı
€ 19.9m GLA + € 27.5m Capex (2) Only
(1)
including MRL 50% (3) Or
upscaled unitsValue creation | Best II - Update
0%
%
%
42
67
0%
0%
10
T
T
10
10
T
LE
LE
LE
T
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E-
E-
LE
LE
E-
PR
PR
PR
Guadalajara Guadalajara
Madrid Guadalajara Toledo Guadalajara Madrid Guadalajara Guadalajara
Cabanillas Cabanillas
Pinto II B(1) Cabanillas III Seseña Cabanillas F San Fernando II Azuqueca III Azuqueca II
Park I extension Park II
GLA (sqm) 29,473 21,879 28,731 20,723 34,224 51,000 92,994 98,757 210,678
Capex (€m) 13.7 11.8 15.5 10.8 21.7 30.1 56.0 54.7 114.2
ERV (€m) 1.2 0.9 1.2 0.9 1.9 2.3 3.8 4.4 9.2
ERV YoC 8.6% 7.8% 7.7% 7.9% 8.9% 7.7% 6.8% 8.1% 8.1%
Delivery 2019 2019 2019 2019 2020 2020 2020/2021 2021 2021
Secured € 8.4m
GLA Total investment Pending Capex Additional Rents Yield on Cost
588k sqm € 328.4m € 193.4m € 25.9m 7.9%
Already captured To come
(1)
2nd phase of Pinto II only
€ 1.2m € 24.7m ı 27 ıValue creation | Best II
BEST II FOCUSED ON THE 2 MAIN LOGISTICS CORRIDORS OF MADRID
+588K sqm € 26m
GLA ERV
Madrid
€ 328m 7.9%
Investment Yield on Cost
ı 28 ıValue creation | Best III
LAUNCH OF BEST III TO EXPAND FOOTPRINT TO OTHER AREAS OF THE IBERIAN PENINSULA
0% 0%
0% 10 10
10 ET ET
T L L
LE E- E-
PR PR
Valencia Zaragoza Sevilla(2) Lisbon Madrid
Valencia
Ribarroja Plaza II ZAL WIP Park San Fernando III
GLA (sqm) 34,992 11,421 42,632 224,864 98,942 96,572
Capex (€m) 26.3 7.1 24.4 147.6 54.9 56.2
ERV (€m) 1.9 0.5 2.0 10.5 5.1 4.4
ERV YoC 7.2% 7.2% 8.4% 7.1% 9.3% 7.8%
Delivery 2019 2020 2019/2020 2020/2023 2022/2023 2022/2023
Secured € 4.4m
GLA Total investment Pending Capex Additional Rents Yield on Cost
509k sqm € 317m (1)
€ 261.2m € 24.5m 7.7%
Already captured To come
(1)
€ 163m total investment until 2022 € 1.0m € 23.5m ı 29 ı
(2)
8.798 sqm already delivered to AmazonValue creation | Best III
LAUNCH OF BEST III TO EXPAND FOOTPRINT TO OTHER AREAS OF THE IBERIAN PENINSULA
+509K sqm € 24m
GLA Basque Country ERV
Zaragoza
Madrid
Valencia
Lisbon
€ 317m(1) 7.7%
Investment Yield on Cost
Seville
(1)
€ 163m until 2022
ı 30 ıValue creation | Sources & uses
SELF-FUNDING CAPEX PROGRAM
Cash from further non-core disposals to be used mainly for DCN and debt repayment
1,401
645
(€m)
220
(685)
536
191 receivable
(secondary
retail and Tree)
(328)
206
+€ 191m
(182) until completion
49 of infrastructure
and urbanization
Landmark Flagship Best II Total Capex Capex invested Cash available Cash flow Non-core DCN > 2023
& Best III(1) 2018-2022 as of Dec-19 as of Dec-19 retention disposals 2020-2022
until FY22(2) requirements
Includes € 154m investments post 2022 (San Fernando III, Lisbon Park and Valencia)
(1)
(2)
3 years cash retention based on 20% of FY19 AFFO
ı 31 ıValue creation | Potential rental growth (2019-2022)
ATTRACTIVE GROWTH PROFILE WITH HIGH DEGREE OF LETS AND PRE-LETS
(€m)
+24%
23.5 667.9
651.8
24.7
12.3 (16.0)
37.2
44.3
525.9
499.7
469.4
GRI GRI GRI Rev. Landmark Flagship Best II Best III Potential Non-core GRI
FY17 FY18 FY19 potential GRI FY22 disposals post disposals
ı 32 ıCapital structure
Capital structure | Policy
INVESTMENT GRADE BBB RATING BY S&P WITH POSITIVE OUTLOOK AND Baa2 RATING
BY MOODY’S
Maturity Leverage
schedule • LTV below 50%
•T
arget to reach
• 5-10 years LTVCapital structure | Debt position
3,750 5,567 385
5,182
(€ million)
852
965
Secured Non-mortage Bonds Total Gross Cash Total Net
bank loans debt Debt Debt
% Gross financial debt 17.3% 15.3% 67.4% 100.0%
Average cost (%) 2.60% 1.65% 2.07% 2.09%
% interest rate hedged 98.6% 98.6% 100.0% 99.5%
ı 35 ıCapital structure | Debt maturity profile
INTENSE DEBT MANAGEMENT FURTHER SOFTENING THE MATURITY PROFILE
€ 1,617m € 500m +€ 100m
ESG-linked financing 15-year bond add-on 15-year
post closing
1,057
866 867 889
16 17 776 89
716
16 176 500
850 850 800
700 323
600 23 557
300
15 13 14 22 23
2 14 22 23
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 +2030
Unsecured loans Unsecured bonds Secured bank loans
ı 36 ıCapital structure | Key metrics
AMPLE COVENANT HEADROOM AND STRONG DEBT METRICS
Unsecured senior notes covenants MRL EMTN Program FY 2019
LTV 2.5x 4.2x
Unsec. Assets to Unsec. Debt >125% 224.0%
Other key metrics
Unsecured debt 82.7%
Unencumbered assets (by GAV) 80.8%
Undrawn facilities € 700m
Average cost (fully loaded with hedging) 2.09%(3)
Fixed interest rate(2) 99.5%
LTM NOI / LTM finance cost
(1)
Excluding RCF
(2)
1.79% spot rate
(3)
ı 37 ıSustainability
Sustainability | ESG achievements
REMARKABLE PROGRESS IN ESG
ESG Benchmarks Certifications
MERLIN has obtained Accesibility Efficiency
an excellent mark in the 2019 edition
82%
71% 72%
62%
100%(1) Target 99% 100% 97%
Actual 75% 77% 66%
MERLIN European Global Our
Gold since 2017 average average peers
Shopping Offices Shopping Logistics
centers centers
Social engagement
Direct contributions Matching program Quality Connectivity
Employee
• 0.1% of GRI
contribution
• 2x
Volunteering
hours
• 17 foundations • 47 foundations
>850k sqm certified Wiredscore kicks-off
61 foundations(2) in Europe with MERLIN
Excluding WIPs and Portugal
(1)
3 foundations are bennefited both from direct contributions and matching program
(2) ı 39 ıSustainability | Technology
MERLIN is focusing its technology efforts through 3 pillars
Deployment in our portfolio Mentoring Sponsoring
Sensorization Proptech challenge
MERLIN has invested in Fifth Wall,
MERLIN teamed up a venture capital proptech fund
with ISDI and Impact
accelerator
The program allowed
us to identify Proptech
opportunities
Digitalization
Tenant engagement App
Prized proptechs Portfolio companies
Proptech Ecosystem
User experience
+
ı 40 ıSustainability | ESG Indexed Loan
# Largest in the European KPI’s
Real Estate sector to date
1 2
Continuous
xternal LEED/
E
investment
# Second largest in energy
BREEAM energy
ever in Spain across all industries certifications
efficiency
achieved in
improvement
office, logistics
across the
and retail assets
portfolio
€ 1.55 bn
3 4
Handicapped Electric
Sustainability-linked financing access for all consumption
tenants and sourced by
customers renewal
€ 850 m € 700 m throught AIS energies
Term Loan Revolving Credit Facility certification
of its buildings
Leading national and international financing institutions
ı 41 ıSustainability | European Investment Bank funding
Projects funded
€ 115m
logistics loan funded by the AZUQUECA II AZUQUECA III
European Investment Bank
€ 51m € 64m
Tranch I Tranch II
SESEÑA CABANILLAS PARK II
Advantageous terms
10 years loan
Assets
exceeding 400,000 sqm
Fixed or variable rates European Investment Bank support
based on:
Interest substantially below • Project location
MERLIN’s average funding cost
• Energy efficiency certification
ı 42 ıPaseo de la Castellana, 257 28046 Madrid +34 91 769 19 00 info@merlinprop.com www.merlinproperties.com
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