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MERLIN Properties closes a strong first quarter with gross rents amounting to €124.2 million, up 4.2%

– Strong operational performance continues, with stable occupancy (95.8%)
– EBITDA reached €93.6 million, +3.6% compared to the same period of 2023
– FFO, €72 million, impacted by the launch of the data center operations and higher financial expenses
– S&P has upgraded the Company’s credit rating to BBB+ with a stable outlook, thanks to a lower leverage and an improved cash flow generation profile
– The Company will pay a €24 cents per share final dividend for 2023 on June 4th, complementing the €20 cents paid last December

Madrid, May 16th.- MERLIN Properties closed the first quarter 2024 with total revenues of €127.3 million (including gross rents of €124.2 million). The company continues its strong operating performance with like-for-like rental growth (+3.8 vs. 3M23) and stable occupancy (95.8%). Operating profit reached €72.0 million (€15 cents per share), while net income came in at €64.8 million, both metrics slightly impacted by the ramp-up of the data center operations and higher financial expenses. EBITDA reached €93.6 million, +3.6% compared to the same period of 2023.

The net asset value stands at €7,139 million (€15.20 per share), although no new asset valuation has been carried out (only in June and December every year).
The leverage ratio («LTV») stands at 35%, with a liquidity position of €1,393 million and an average debt maturity of 4.9 years. All maturities until November 2026 have been covered with a combination of bank loans and bonds.
The rating agency S&P has upgraded MERLIN’s credit rating to BBB+ thanks to a lower leverage and an improved cash flow generation profile.
The Company will pay €24 cents per share of final distribution for 2023 on June 4th, which together with the December distribution amounts to €44 cents per share.
Business performance

In offices, the Company continues to see an increase in release spreads (+3.4%) despite high cumulative CPI indexation captured in 2022 and 2023 and like-for-like rental growth of 2.8%. Occupancy remains stable at 92.2%. During the first quarter, 7,962 sqm were delivered to Willis Tower Watson and Globant and 6,188 sqm to LOOM (our coworking subsidiary) in Plaza Ruiz Picasso 11.
Excellent performance of the logistics portfolio in the quarter, with like-for-like rental growth of +4.9%, +5.2% release spread, and the portfolio virtually fully occupied (98.4%). In the first quarter, the only warehouse developed during 2023 (A2-Cabanillas Park II B), with 47,000 sqm, was delivered to Pepco. MERLIN has more than 550,000 sqm of additional land for development, which allows the company to support the expansion of its tenants in the future. A further 140,000 sqm to be delivered in 2025, with a very high level of pre-letting (+80%).
In shopping centers, operating performance remains solid (+4.8% like-for-like growth). Sales (+8.1%) and footfall (+6.6%) comfortably exceeded 3M23 levels and the effort rate remains at record lows (11.6%).

The data centers in Madrid-Getafe, Barcelona-PLZF and Bilbao-Arasur are fully operational and delivered to tenants. On the other hand, both the construction license and the power for the Lisbon-VFX data center have been granted and in Bilbao-Arasur we are expecting construction license for Building 2 before the end of the year.

Investment and divestment activity

Investment activity during the quarter was moderate, limited to the consolidation of 100% ownership in the Plaza Ruiz Picasso extension, a building of approximately 4,500 sqm attached to the Plaza Ruiz Picasso 11 development.

In terms of divestment activity, non-core assets were sold in the first quarter for €3 million. In addition, a further €79.3 million of disposals have been signed, expected to be executed during the year at a double-digit premium to 2023 valuations.