MERLIN Properties makes two new acquisitions in March
• MERLIN Properties has acquired an office building and a logistics warehouse for an aggregate amount of 57.9 million euros.
• The office building, located in Madrid, in the downtown Alcalá street, has a gross leaseable area (GLA) of 9,315 sqm and is fully let to the Ministery of Justice.
• The logistics warehouse is located in the Logistics Transport Centre in Coslada, one of the main logistics hubs in Madrid, let under a long-term lease to Azkar.
The first acquisition, through MERLIN Oficinas, was an office building located in the heart of Madrid, in Alcalá 38-40 street, for a purchase price of 38.1 million euros. The building enjoys an excellent location, at the junction of the renowned streets of Alcala and Gran Vía, in an area known for its high density and retail concentration. This area is currently undergoing a remarkable redevelopment alongside the Canalejas project, which is taking place in the site of the former Banco Santander headquarters. The building has a GLA of 9,315 sqm, and is fully let to the Ministery of Justice, until 31 December 2016, with a renewal option for one additional year. The building has been acquired for a price of 38.1 million euros, of which 17.1 have been funded with equity and the remaining 21 million euros is the outstanding principal amount of financing already in-place. The acquisition price reflects, according to EPRA recommendations, a gross initial yield of 5.2% (5.0% net), while also offering high growth potential through rent reversion and the reconversion of the ground floor to high street retail use.
The second acquisition, through MERLIN Logística, is a logistics warehouse located in Madrid, in the Logistics Transport Centre in Coslada, a consolidated logistics area, known for its excellent connection to the A-2 highway and proximity to Madrid (18 kms.) and airport (7 kms.). The acquired asset has a GLA of 28,490 sqm, fully let to Azkar (subsidiary of Dachser, one of the leading logistics operator in Europe) under a 5-year unexpired lease contract. The price reflects a net initial yield, according to EPRA recommendations, of 7.1%.
Following these acquisitions, MERLIN Properties’ real estate portfolio, which now has a GLA of over 717,000 sqm, generatesannualized gross rental income of 132.2 million euros.