FY2020 RESULTS 26 FEBRUARY 2021 - Merlin Properties
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FY2020 R
E S U LT S
P R E S E N TAT I O N
26 FEBRUARY 2021
DISCLAIMER
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ı2ı
ISMAEL CLEMENTE
CEO
Contents
Highlights
FY20 Financial results
Offices
Logistics
MIGUEL OLLERO Shopping centers
GM / COO
Valuation and debt position
Sustainability & Technology
Value creation
Closing remarks
DAVID BRUSH
CIO
Highlights | 2020: a challenging year
MERLIN Market
Occupancy FY20 New contracts (sqm) Rents
Occupancy New contracts (sqm) Prime rents (€/sqm)
(YoY) (YoY) (LfL Growth)
MAD 91.0% (-60 bps) 350k (-43% YoY) 35.5 (-2% YoY)
Offices 91.1% 44,388 € 233m
BCN 92.8% (-50 bps) 179k (-55% YoY) 28.0 (-2% YoY)
(-168 bps) (-45% YoY) (+2.2% LfL)
LISB 95.1% (-90 bps) 138k (-29% YoY) 23.0 (+0% YoY)
MAD 92.7% (-185 bps) 929k (-1% YoY) 6.25 (+0% YoY)
Logistics 97.5% 136,656 € 59m
BCN 96.7% (-50 bps) 437k (-74% YoY) 7.0 (+0% YoY)
(-14 bps) (-11% YoY) (+1.8% LfL)
LISB 85.0% (0 bps) 136k (n.a) 4.0 (+0% YoY)
SPAIN 90.0 (-10% YoY)
Shopping 93.7% 20,369 € 114m
centers (+47 bps) (-47% YoY) (-1.2% LfL)
PORTUGAL 102.5 (-2% YoY)
€ 87m
Net 99.7% -
(+1.2% LfL)
leases
Source: BNP Paribas, Cushman & Wakefield and JLL
(1)
Net rents: gross rents - incentives
ı4ı
Highlights | 2020: a challenging year
Drop in net rents of SCs means logistics has overtaken retail as revenue contributor
and will continue to be the fastest growing category
2020(1) Target
(2)
15% 2
%
15%
Hoteles Hoteles
Residencial en alquiler Residencial en alquiler
69% Otros
47% Otros
50%
Logístico 18% 15%
Centros comerciales
Oficinas High Street Retail
Centros comerciales Logístico
High Street Retail Oficinas
18 %
20% (1)
Offices Logistics Net leases Shopping centers Other
(1)
Net rents including proportionate contribution of Zal Port and Tres Aguas
(2)
Other includes hotels, non core land, miscellaneous and minority stakes including DCN
ı5ı
Highlights | Sustainability
MERLIN is implementing sustainable initiatives across its portfolio
Assets Construction Mobility
• Path to • Embodied • Mobility
net zero carbon reduction as a service
Plans
• Photovoltaic • Urban regeneration •L
ast mile logistics
Initiatives
•E
lectric vehicles chargers
Scoring 78% B
ı6ı
Highlights | Technology
MERLIN continues to expand its technology and digitalization efforts
Sensorization Digitalization Data and processes User experience
ı7ı
FY20 FINANCIAL R E S U LT S
FY20 Financial results |
Resilient business performance. FFO per share of € 0.56 beating the post Covid-19 guidance
(€ million) FY20 FY19 YoY
Gross rents 503.4 525.9 (4.3%)
Gross rents after incentives 441.1 511.5 (13.8%)
Net rents 393.9 463.3 (15.0%)
EBITDA(1) 365.4 425.5 (14.1%)
FFO(2) 262.4 313.3 (16.2%)
AFFO 247.6 303.3 (18.4%)
IFRS net profit 56.4 563.6 (90.0%)
EPRA NTA 7,263.4 7,229.5 +0.5%
€ 0.10 of Covid (-0.02 of management compensation)
€ 0.03 of non core disposals
(€ per share)
FFO 0.56 0.67 (16.2%)
AFFO 0.53 0.65 (18.4%)
EPS 0.12 1.20 (90.0%)
EPRA NTA 15.46 15.39 +0.5%
(1)
Excludes non-overhead costs items (€ 6.2m) plus 2017-2019 LTIP pending accrual (€ 18.2m)
(2)
FFO equals EBITDA less net interest payments, less minorities, less recurring income taxes plus share in earnings of equity method
ı9ı
FY20 Financial results | Bridge gross rents
Good LfL growth in offices and logistics, while shopping centers down
+2.2%
Offices
Logistics +1.8%
Net leases +1.2% LfL(1)
LfL(1)
+0.4%
Shopping centers (1.2%) +0.4%
Other (25.0%)
(€m)
525.9 +1.9 503.4
525.9 +1.9 503.4
(24.4)
(24.4)
FY 2019 Like-for-Like Balance acquisitions, FY 2020
FY 2019 Like-for-Like
growth Balance acquisitions,
disposals, other FY 2020
growth disposals, other
Portfolio in operation for the FY19 (€ 485,2m) and for the FY20 (€ 487,1m)
(1)
ı 10 ıFY20 Financial results | Occupancy and WAULT
Occupancy maintained in a challenging environment
OCCUPANCY AND WAULT TO FIRST BREAK PER ASSET TYPE(1)
(57 bps)
97.5% 99.7%
94.2% VS 94.8%
MERLIN 2019
93.7% Average
91.1%
17.4
72.1%
5.4 years
3.0 3.4 3.5 MERLIN
2.4 Average
Offices Logistics Net leases Shopping centers Other
Source: Company
(1)
WAULT by rents means the weighted average unexpired lease term to first break, calculated as of 31 December 2020
ı 11 ıOFFICES
Offices | Rent bridge and breakdown
Positive LfL rental growth in the period (+2.2%)
(€m) LfL(1)
+2.2%
243.4 +4.9 233.2
(15.1)
FY 2019 Like-for-Like growth Balance acquisitions, FY 2020
disposals, other
LfL growth by area Occupancy by area
FY19 FY20
Madrid +1.3% Madrid 91.0% 89.5%
(150) bps
Barcelona +5.4% Barcelona 96.0% 92.6%
(341) bps
Lisbon +3.9% Lisbon 100.0% 100.0%
0 bps
Travelperk early
(1)
Office portfolio in operation for FY19 (€ 220.5m of GRI) and for FY20 (€ 225.4m of GRI)
termination in
Torre Glóries ı 13 ıOffices | Leasing activity
Rental growth was positive in the period (+3.0% release spread)
Contracted sqm Release spread #Renewed contracts Tenants contracted
Madrid 204,268 (1.4%) 115
+9.1% Ex-Endesa
full year Madrid only
Barcelona 39,187 +29.5% 24
Lisbon 5,538 +31.1% 11
TOTAL 248,992 +3.0% 173
ı 14 ıOffices | Leasing activity
What happened after Covid-19?
Q2-Q4 2020
News contracts signed(1) 83,518
Monumental Castellana 85
Premium to FY19 ERV 7.3%
Contracts renewed 142,959
Renewal rate 83%
TFM Ribera del Loira
Release spread +0.9%
+12.9% Ex-Endesa
Post-Covid full portfolio
PE Las Tablas Castellana 280
(1)
Including WIP assets to be delivered in 2021
ı 15 ıOffices | Resilient rental profile
Strong Defensive lease
tenant roster maturities
• Only 15% to expire in 2021
• 12% reversionary potential
9
5% <
8%
large corporates vulnerable industries
7
0% (1)
headquarters
as a buffer against market declines
•D
iversified tenants
(Top-10 represents 31% of rents)
Best-in-class Additional
collection rates rents
99.8% € 12.5m future secured rents
rents collected in 2020 from Landmark deliveries
(1)
Including retail, leisure, tourism and automotive as per S&P definition
ı 16 ıOffices | Flex space
A full service shop in Iberia, offering the whole suite of products
The office of the future
Fixed Flexible
Conventional office staff staff Flexible office
Outside the scope
of WFH Law
“Work close to home”
“Work close to the client”
Fully serviced clients in our portfolio
ı 17 ıOffices | Flex space
MERLIN ready to escalate flex offer (currently 1.5% of stock)
Madrid Barcelona
Operating Operating
6 spaces ı 1,129 desks ı 50% Occ. 2 spaces ı 348 desks ı 59% Occ.
New openings New openings
Atica Torre Chamartín exp. Pza. Ruiz Picasso Torre Glòries exp. Ferreteria 22@ Plaza Cataluña 9
150 desks 248 desks 305 desks 98 desks 247 desks 271 desks
Opening 2Q21 Opening 2Q21 Opening 4Q22 Opening 3Q21 Opening 1Q22 Opening 1Q22
ı 18 ıLOGISTICS
Logistics | Rent bridge and breakdown
Logistics continues delivering a strong performance
(€m)
LfL(1)
+1.8%
53.8 +1.0 +4.1 58.9
FY 2019 Like-for-Like growth Balance acquisitions, FY 2020
disposals, other
Lfl growth by area Occupancy by area
FY19 FY20
Madrid +6.2% Madrid 97.2% 97.2%
+3 bps
Barcelona (5.4%) Barcelona 96.6% 93.3%
(327 bps)
Other (2.4%) Other 99.1% 100.0%
+88 bps
(1)
Logistics portfolio in operation for FY19 (€ 52.3m of GRI) and for FY20 (€ 53.2m)
ı 20 ıLogistics | Leasing activity
Excellent release spread (+6.0% all portfolio)
Contracted sqm Release spread #Renewed contracts Tenants contracted
Madrid 76,184 (9.9%) 1
Barcelona 29,191 +12.1% 3
Other 50,197 +12.2% 1
TOTAL 155,572 +6.0% 5
ı 21 ıLogistics | ZAL Port
Stock
632,176
WIP
103,784 GRI secured
€ 8.1m
Stock incl. WIP
735,960
Third parties stock
183,252
Stock under management 919,212
Contracted sqm Release spread #contracts Tenants
345,624 (0.3%) 41
Occupancy by area
FY19 96.8% +79 FY20 97.6%
€m FY20 FY19 YoY
Gross rents 56.2 45.9 +22.4%
Net rents 50.8 45.1 +12.8%
EBITDA 49.2 43.2 +14.0%
FFO(1) 29.3 24.6 +19.3%
ı 22 ı
After deducting leasehold concession charge
(1) Logistics | The name for logistics in Iberia
KPI’s
Existing WIP Total
GLA (sqm) 1,853,892 1,040,340 2,894,231
Gross rents (€m)(1) 86 55 141
Net rents (€m)(1) 82 54 136
An unparalelled Bilbao/Vitoria
footprint
managed(2) Zaragoza
Madrid Barcelona
A-2 1,154k sqm Port 868k sqm
A-4 166k sqm Other 17k sqm
Valencia
Lisbon 158k sqm
225k sqm
Seville Other(3)
154k sqm 153k sqm
(1)
Including ZAL Port on a proportionate basis (48.5%)
(2)
Including WIP
(3)
Basque Country and Zaragoza ı 23 ıLogistics | The name for logistics in Iberia
MERLIN is a clear leader in the Iberian logistics market…
(‘000 sqm managed)
90% suitable
3000 for e-commerce
2500 2,894(1)
2000
1500
1000 1,900
500 1,300
1,000
0
Merlin uk usa usa2 ue 615
Peer 1 Peer 2 Peer 3 Peer 4
… backed by our top tenant roster
E-commerce operators
End-user
(1)
Including managed stock (ZAL Port)
ı 24 ıLogistics | Omnichannel initiatives
The ability to integrate physical and digital channels is key in the current competitive landscape
MERLIN is the “top of mind” solution provider for omnichannel customers
Main omnichannel actions Main omniclients in our portfolio
LAST MILE
CLICK & COLLECT
FLEXIBLE LOGISTICS
DIGITAL MOVING
TO PHYSICAL
PHYSICAL SERVING
DIGITAL
ı 25 ıSHOPPING CENTERS
Shopping centers | Rent bridge and breakdown
Footfall and tenant sales affected by the pandemic
(€m)
LfL(1)
(1.2%)
127.3 114.4
(1.4) (11.5)
FY 2019 Like-for-Like growth Balance acquisitions, FY 2020
disposals, other
Footfall (million) Tenant sales (million)
2019 102.7 2019 1,104.6
(37.4%) (36.4%)
2020 64.3 2020 702.5
(1)
Shopping centers portfolio in operation for FY19 (€ 113.3m of GRI) and for FY20 (€ 111.9m of GRI)
ı 27 ıShopping Centers | Leasing activity and occupancy
Positive release spread mainly explained by contractual step-ups. Occupancy supported
by the Commercial Policy and Flagship deliveries
Release spread #contracts Tenants
All
portfolio +4.1% 95
Contracted Net Occupancy Change vs
sqm Absorption 31/12/20 31/12/19 (bps)
All
portfolio
45,365 (1,364) 93.7% 47
ı 28 ıShopping Centers | A resilient portfolio
Our commercial policy is paying off
Rent relief 2020 6M2021 Trade-Off
Description • Includes full closures due to 3rd wave
€m 46.7 € 19.6m • Common services fully paid
• Extension of maturities beyond Dec-21
Protects occupancy and reduces litigation
Avoids zombification, all bad tenants are being evicted
A bold move...
nables management team to focus on lease-up
E
(eviction and rotation)
Smooth maturity profile of credit worthy tenants
... that is having Insignificant litigation
a positive
impact ... Best-in-class collection rates (>98%)
Attracting new tenants (9,934 sqm of retenanting in 2020 and 4,500 sqm
already signed to be delivered in 2021)
(1)
% of total MRL gross rents
(2)
Based on 2021 full year gross rents ı 29 ıVA LUAT I O N AND DEBT POSITION
Valuation and debt position | GAV summary
Valuation slightly down, with logistics up, offices and net leases flat and retail down
Reversionary 5.0% 6.3% 4.7% 5.7%
yield
Passing 4.1% 5.6% 4.7% 5.0% 4.5%
yield 12,811
12,216
6,322
GAV
TOTAL with minority stakes
(€ million)
Shopping centers
Minority stakes(2)
1,846 2,207
Net leases
Logistics
Offices
TOTAL
Other(1)
1,026
815
595
Source: Company
(1)
Other includes logistics WIP, Office land for development, non-core land and miscellaneous
(2)
Including DCN and the DCN loan ı 31 ıValuation and debt position | GAV bridge
GAV almost flat (+0.5%) during the year
(€m)
+0.5%
12,751 236 12,811
127
(198) (105)
GAV Disposals Acquisitions Capex & WIP(1) Revaluation(2) GAV
FY19 FY20 FY20 FY20 FY20 FY20
Including acquisition of logistics assets to be developed
(1)
ı 32 ı
-€ 105m revaluation 2020 equals - € 84m P&L revaluation - € 1m equity method revaluation - € 15m Tree derivative - € 4m TFRS16 adjustment
(2) Valuation and debt position | GAV drivers
The GAV movement is explained by the yield expansion
GAV LIKE-FOR-LIKE EVOLUTION(1)
+8.0%
+8.0%
+1.0%
+1.0%
(0.6%)
(0.6%)
MERLIN
(0.2%) MERLIN(2)
(0.2%) average
average(2)
(8.7%)
(8.7%)
Offices Logistics Net Leases Shopping centers
Offices Logistics Net Leases Shopping centers
YIELD EXPANSION (COMPRESSION)(3)
24 bps
24 bps
(1 bps)
(1 bps)
(23
(23 bps)
bps)
MERLIN
(26 bps) MERLIN
average
(26 bps) average
(46 bps)
(46 bps)
Offices Logistics Net Leases Shopping centers
Offices Logistics Net Leases Shopping centers
Discount rate change
DiscountFY20
rate change +73 bps -12 bps - +12 bps
vs FY19
FY20 vs FY19
+73 bps -12 bps - +12 bps
(1)
GAV of WIP projects included under offices and logistics for LfL purposes.
(2)
Including equity method
(3)
Based on exit yields ı 33 ıValuation and debt position | Debt position
Credit rating maintained by S&P and Moody’s after Covid-19
31/12/2020 31/12/2019
Net debt € 5,268m € 5,182m
LTV 39.9% 39.5%
Average cost (spot) 2.12% (1.80%) 2.09% (1.79%)
Average Maturity (years) 6.0 6.4
Liquidity(1) (€ million) 1,253 1,085
Fixed rate debt 99.8% 99.5%
Unsecured debt / Total debt 86.7% 82.7%
Rating Outlook
BBB Stable
Baa2 Negative
Source: Company
(1)
Includes available cash plus pending receivable of Juno & Silicius, treasury stock and undrawned credit facilities (€ 786m RCF and EIB loan)
ı 34 ıValuation and debt position | Liquidity position
Minimun¡m collection defaults imply extremely low bad debt write-off risk
ERLIN enjoys a
M ERLIN’s collection rate
M hese figures, well above
T
comfortable liquidity has remained at very high European peers, prove the
position (€ 1.25 bn) levels during the whole resilience of the company
Covid-19 outbreak and imply no bad debt
write-off risk
Uncollected Offices Shopping centers Net Leases Logistics
2Q20 0.8% 2.6% 0.0% 0.9%
3Q20 0.1% 1.7% 0.0% 0.2%
4Q20 0.2% 2.4% 0.0% 0.0%
Note: as a % of total invoices due
ı 35 ıS U STA I N A B I L I T Y & TECHNOLOGY
Sustainability & Technology | Strategy update
ESG at the core of our business
Sustainable Sustainable
assets mobility
• Energy efficiency measures: Sustainable • MERLIN HUB: a fully developed
systems installed across our construction cluster of mobility to tenants
portfolio to promote energy located within a specific zone
efficiency • Last Mile Logistics: launch of
• Photovoltaic project: an internal pilot program and
pioneer in photovoltaic • Capex devoted deployment to the entire portfolio,
self-consumption installations to energy efficiency all with emission-free vehicles
in value creation plans
• EV Chargers: intensive installation
• The most ambitious
projects to reshape Madrid: of electric chargers across our
1. DCN 2. Renazca portfolio
• Certifications Scoring
Outstanding achievement: • Quality seals
more than 2.5 million sqm certified Strong track record in
quality seals over time ı 37 ıSustainability & Technology | Sustainable assets: Net zero emissions
MERLIN engaged and supporting the race to net zero emissions
Designing an ambitious policy with clear set targets
for improvement by 2030…
Reduce our embodied and operational carbon emissions
Increase our renewable energy consumption
Improve the energy efficiency of our assets
Achieve a zero waste to landfill
Groundbreaking initiatives that are already in motion…
Photovoltaic project & Electric Vehicles Chargers
Sustainable developments: DCN & Renazca
Sustainable mobility: MERLIN HUB & Last Mile Logistics
Our stakeholders at the heart of everything we do…
Engaged with our tenants to deliver the best and most
efficient assets in the market
ı 38 ıSustainability & Technology | Sustainable assets: photovoltaic project
MERLIN is a pioneer in photovoltaic self-consumption installations on its real estate portfolio, launching
a national roll-out program (Phase I) that will become the largest initiative of its kind in Spain
24 assets
across all asset
categories Barcelona
4
1
7 Madrid
Total
Investment:
Valencia
€ 26.1m 1
3 1 1
Palma
de Mallorca
Seville
Capacity
Malaga • Offices
installed
1 • Logistics
37.1 Mwp • Shopping centers
1
8,794,293 CO2 emissions avoided (kg/year)…
….The equivalent of 179,967 trees/year (75% of Madrid) ı 39 ıSustainability & Technology | Sustainable construction: DCN & Renazca
•U
rban biodiversity
around a green axis
•S
ustainable urban
drainage
• Accesible urbanism
• Smart city concept
DCN
•U
rban regeneration
anchored by
biodiversity
•O
ld water courses
recovered
Renazca
ı 40 ıSustainability & Technology | Sustainable mobility
MERLIN hub offers personalized mobility solutions, contributing to reduce carbon emissions
32 buildings
ca. 350,000 sqm
> 40,000 daily users
Mobility as a service… …. Shaped in 6 basic mobility pillars
Carpooling Carsharing
platform agreements
Regular shuttle Parking spaces Bike use
services for carsharing enhancement
Transport Taxi / ride-hailing
on demand
Integrated mobility Reversed bus lane in the Bus & pedestrian Intelligent
platform service lane of Avenida lanes Carparks
de Burgos
Plus Electric Vehicle chargers | 756 installed + 981 planned
ı 41 ıSustainability & Technology | Sustainable mobility: last mile logistics
30% of the logistics operators cost is generated in the last mile. Reinventing the use of the
space, achieving additional income, with double-digit yield on costs
DAYTIME HOURS NIGHT-TIME HOURS DAYTIME HOURS
-
• Load break points LOGISTICS
OPERATION IN
ELECTRIC DELIVERY VEHICLE
THE PARKING
• Capillary distribution
OFFICE HUBS
ZERO-EMISSIONS VEHICLE
Pilot Project:
Maria de Portugal
ELECTRIC CARGO BICYCLE
23:00 7:30
Truck arrival start time Commencement of the distribution, Area reserved for the reclassification and load
movement of vehicles or bicycles of the merchandise to be delivered during the
time scheduled. This space might be fed through
small vehicles during predefined timetables
•S
hopping Centers as
a logistics warehouse
SHOPPING
• Loading break points
CENTERS HUBS
• Capillary distribution
Pilot Project:
Arenas
PROSPESCTIVE
PARTNERSHIPS
ı 42 ıSustainability & Technology | Scoring: energy certifications
Outstanding achievement in terms of energy certifications, with more than 2.5 million sqm certified
Offices Breeam Leed
82% Pass Silver Platinum
2% 20% 6%
> 1,060k sqm Very good
4% 55%
certified (2016 - 2020) Good 16% 84% Gold
2015 FY20 43% 74%
Shopping Centers
76% Pass
13%
> 360k sqm Very good
0%
certified (2016 – 2020) 100% 54%
2015 FY20 Good
32%
Logistics
6%
86%
Very good Silver
Pass 12%
> 1,160k sqm 18% Platinum
0% 76%
certified (2016 - 2020) 29%
50% Good 50%
2015 FY20 Gold
59%
ı 43 ıSustainability & Technology | Scoring: quality seals
First-rate quality seals in a variety of certificates
78%
69% 70% 71% MERLIN score Average performance
C C C Gold since 2017 EPRA Sustainability
B in the EPRA Best Practices
Financial Europe Global reporting recommendations
MERLIN European Global Our peers
Services Average 2018
average average
More than 1,1m sqm under certification 52 offices certified 24 assets AEO certified,
by the ISO 14001 environmental 13 shopping centers certified totaling more than 100k sqm
management system Extensive pipeline of 65 office
64 assets amounting to 0.8m sqm buildings, representing nearly
of GLA certified under the ISO 50001 775k sqm
environmental management system
ı 44 ıSustainability & Technology | 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 45 ıVA LU E C R E AT I O N
Value creation | Capital recycling - Divestments
€ 244m of divestments executed
Shopping centers Logistics Net Leases
•S
ale of 3 secondary retail assets • Disposal of 3 logistics isposal of 19 BBVA branches
•D
(Thader, La Fira and Nassica) in warehouses, 2 in Madrid and in 2020 for € 25.3m
exchange for 34.4% of Silicius, a 1 in Zaragoza in February 2021 urther sale of 1 BBVA branch
•F
multi-product vehicle. Executed for € 43.3m in February 2021 for € 0.7m
on a NAV neutral basis (€ 175m)
ı 47 ıValue creation | Landmark I
Castellana 85 Monumental
•F
ull refurbishment of the asset, located in the heart •F
ull refurbishment of the building, located in Duque de
of Azca, the best business area in Madrid Prime CBD Saldanha, one of the most emblematic squares in the city
• C85 will become the HQ of both Accenture and Elecnor at the core of Lisbon’s Prime CBD area
• 10-year term lease agreement with BPI to become their HQ
in Lisbon
GLA 16,474 sqm(1) GLA 25,385 sqm(1)
Total Capex € 34.8m Total Capex € 34.8m
Yield on cost 8.1% Yield on cost 9.4%
Delivery 2Q21 Delivery 2Q21
ı 48 ı
(1)
Post refurbishmentValue creation | Landmark
creation | Madrid Nuevo
I Norte update
0%
0%
%
28
10
10
T
T
T
LE
LE
LE
E-
E-
E-
PR
PR
PR
Torre Torre Marqués de Diagonal 605 Plaza Ruiz
Castellana 85 Monumental
Charmartín Glòries Pombal 3 Picasso
GLA (sqm) 18,295 37,614 12,460 13,244 16,474 25,385 31,576(1)
Acquisition
(€m) 31.2 142.0 - - - - -
Capex (€m) 38.0 26.7 1.6 8.7 34.8 34.8 57.5
Rent (€m) 4.3 11.8 0.2 1.3 2.8 3.3 6.0
Yield on Cost 6.2% 7.0% 8.5% 15.5% 8.1% 9.4% 10.4%
Delivery 2019 2019 2020 2020 2021 2021 2022
Total acquisition Total Capex Total investment Total additional rents Yield on Cost
€ 173.2m € 202.1m € 375.3m € 29.7m 7.9%
(1)
36,899 sqm post refurbishment
ı 49 ıValue creation | Madrid Nuevo Norte update
2020 2021 milestones
“Convenio de Infraestructuras” Land adquisition
On July 22th 2020, he “Convenio de Infraestructuras”
T nce the “Convenio de Infraestructuras”
O
the Madrid City Council is in process of being approved. This is approved (estimated in 2Q21), DCN
agreement sets out and commits must proceed with the acquisition of land
definitely approved
the financing and execution of the from Adif
the “Modificación del infraestructures of the projec by Adif;
Plan General Municipal Madrid Nuevo Norte; Madrid City Council
de Madrid” (BOCAM and Madrid Regional Government
31/07/2020)
ı 50 ıValue creation | Flagship
Saler Porto Pi
• The refurbishment will consolidate Saler, facing the City of • Full refurbishment of the shopping center
Arts and Sciences, as the leading urban mall in Valencia he asset will contain outstanding exterior terraces
•T
nchor tenants upsizing and upscaling units
•A overlooking the Mediterranean sea
• The future additional space (2,486 sqm) is fully let
GLA 29,360 sqm (inc. additional GLA) GLA 32,795 sqm (inc. additional GLA)
Cost € 37.8m (inc. units acquired) Cost € 43.7m (inc. units acquired)
Yield on cost 5.7% Yield on cost 4.1%
ı 51 ıValue creation | Flagship
Arturo Soria
Larios X-Madrid Tres Aguas(1) Saler Porto Pi
Plaza
GLA (sqm) 41,460 7,054 47,170 67,690 47,471 58,779
GLA MERLIN 37,957 6,069 47,170 33,845 28,861 32,963
(sqm)
Works: 27.5 Works: 46.4 Works: 25.8 Works: 28.6
Capex (€m) 5.4 12.1(1)
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) 2.1 1.8
Yield on
Cost
6.6% 11.3% 9.1% 11.2% 5.7% 4.1%
Delivery 2019 2019 2019 2019 2021 2021
∆ GLA + X-Mad inv. Total Capex Total investment Total additional rents Yield on Cost
€ 57.5m € 145.9m € 203.4m € 14.2m 7.0%
(1)
Only including MRL 50%
ı 52 ıValue creation | Best II & III
A2 - San Fernando II Zaragoza Plaza II Sevilla ZAL WIP A2 - Azuqueca II
• Project delivered in 3Q20 • Turn key project in the most •P hased project located in •X XL Turn-key project
5% let to Grupo Damm
•8 dynamic hub of Zaragoza Seville’s Port area in the A2 Corridor
and Alcanor • 100% let to DSV on a long • 3 warehouses totalling • 100% let to Carrefour, to
term basis 27,528 sqm have already cover national distribution
been delivered of non-consumible goods
GLA 34,592 sqm GLA 11,421 sqm GLA 42,632 sqm GLA 98,757 sqm
ERV € 1.9m ERV € 0.5m ERV € 3.0m ERV € 4.0m
Yield on cost 8.5% Yield on cost 7.2% Yield on cost 10.2% Yield on cost 8.1%
ı 53 ıValue creation | Best II
85
% 0%
10
LET ET
E- L
E-
PR PR
A4 A2 A4 A2 A2 A2 Cabanillas A2 A2
Pinto II B(1) Cabanillas III Seseña Cabanillas F San Fernando II Park I G & H Azuqueca II Cabanillas Park II
GLA (sqm) 29,473 21,879 28,731 20,723 33,592 92,994 98,757 47,403
Capex (€m) 13.7 11.8 15.5 10.8 22.1 56.0 54.7 25.7
ERV (€m) 1.2 0.9 1.2 0.9 1.9 3.8 4.4 2.1
ERV YoC 8.6% 7.8% 7.7% 7.9% 8.5% 6.8% 8.1% 8.1%
Delivery 2019 2019 2019 2019 2020 2020/2021 2021 2021/-
GLA Total investment Total additional rents Yield on Cost
374k sqm(1) € 210.3m € 16.4m 7.8%
Including only 22.5% of the GLA and associated Capex of Cabanillas Park II
(1)
ı 54 ıValue creation | Best III
%
00
T1
-LE
PRE
Valencia Zaragoza Sevilla(1) Lisboa
Ribarroja Plaza II ZAL WIP Park
GLA (sqm) 34,992 11,421 42,650 44,973
Capex (€m) 26.3 7.1 29.9 29.5
ERV (€m) 1.9 0.5 3.0 2.1
ERV YoC 7.2% 7.2% 10.2% 7.1%
Delivery 2019 2020 2019/2020/2021 2021
GLA Total investment Total additional rents Yield on Cost
134k sqm € 92.8m € 7.5m 8.1%
(1)
13,476 sqm already delivered to Amazon and Collbatallé
ı 55 ıValue creation | Growth plans: rents secured
Growth plans: Total Rents 2021 2022
future rents secured (€m) contracted CF effect CF stabilized
Offices 12.5 8.1 12.5
Logistics(1) 9.7 6.3 9.7
Total 22.2 14.4 22.2
(1)
Including ZAL Port on proportionate basis
ı 56 ıOUTLOOK 2021
Outlook 2021 | Guidance
OFFICES light decline in occupancy expected due to space
S
reduction and insolvencies
Low maturity profile (15%) combined with quality
Asset of tenant roster will help to navigate the crisis
Flex space will gain relative share from its current
Categories
small base
LOGISTICS obust market will continue
R
Clean-up of “flex logistics” may affect occupancy
on the first half
RETAIL ome decline in occupancy expected due
S
to eviction of insolvencies
Commercial policy will protect occupancy overall
2021 2020 Pay-out
to distribute in 2021
Guidance
€ 0.56 € 0.25 (recommended)
FFO PER SHARE DIVIDEND PER SHARE
ı 58 ıCLOSING REMARKS
Closing remarks | A resilient company
47% 18% 18%
Diversified OFFICES(1) LOGISTICS(1) NET LEASES(1)
business
model 15% 1,900
RETAIL(1) TENANTS(2)
92%
OFFICES IN PRIME CBD AND NEW BUSINESS AREAS
High quality 90%
portfolio SUITABLE FOR E-COMMERCE LOGISTICS
95%
URBAN AND DOMINANT MALLS
y net rents
B
(1)
Excluding minority stakes
(1)
ı 60 ıClosing remarks | A resilient company
2.9 bn(1) in contracted rents to first break
€
and € 5bn to maturity
Stable and
Only 9.9% of rents maturing before end of 2021
predictable
cash flow Covid-19 incentives fully booked in 2020 (€ 47m)
stream Secured annual rents from growth plans of € 22m
Fully funded Capex program
39.9% LTV (covenant 60%)
No debt repayment until May 2022
Healthy
Liquidity position of € 1.25bn
debt profile
Best-in-class collection rates
BBB stable rating by S&P
Including contracts on projects pending to be delivered. Not including CPI
(1)
(2)
Assuming no mall income and 0% renewal rate
ı 61 ıClosing remarks | Strategy update
#1 Offices Disposals of:
Building a #1 Net leases • Hotels
2014 unique portfolio 2017 • Residential
#1 Logistics • Non-core and retail
in record time
Top 5 retail € 4.2bn sold since 2016
Optimizing the
2018 quality of the 2023 Landmark | Flagship | Best II & III
portfolio to the
next level Near completion
Sustainability
Commited Being at the forefront
of ESG
to offer the Flexibility
best customer Innovation Broadening our array of
experience First player to provide services to be the best suited
2020 2025 innovative solutions: player for a new, flexible world
and to become • Last mile
the most • Mobility self-consumption User experience
Enriching the daily experience
technologically
Technology of tenants in our portfolio
advanced REIT Converting real estate
into digital
ı 62 ıPaseo de la Castellana, 257 28046 Madrid +34 91 769 19 00 info@merlinprop.com www.merlinproperties.com
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