Merlin Properties Socimi, S.a. · BME:MRL
Merlin Properties Socimi — Merlin Pptys Socimi Ord — H1 2023 Earnings Presentation
43 slides from Merlin Properties Socimi's earnings presentation, Jul 28, 2023
Slide 1: 6M23 Results Presentation
6M23 RESULTS PRESENTATION 28 JULY 2023
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared certain assumptions and estimates. These offering, will not be registered under the This presentation may include forward- by MERLIN Properties SOCIMI, S.A. (the internal analyses may have not been verified U.S. Securities Act of 1933, as amended (the l
Slide 3: Contents
CONTENTS • 6M23 Financial results • Offices • Logistics • Shopping centers • Valuation and debt position ISMAEL CLEMENTE MIGUEL OLLERO • Sustainability CEO COO • Value creation • Digital Infrastructure Plan • Outlook 2023 • Closing remarks
Slide 4: Key highlights | Overview
Key highlights | Overview Operating performance • Strong operating performance in all three asset classes with outstanding LfL rental growth (+7.7%) and occupancy at 94.9% (+12 bps vs. 3M23) • O ffices resiliently performing despite fears: +7.5% LfL rental increase, +3.2% release spread and 92.3% oc
Slide 5: 6M23 Financial Results
6M23 FINANCIAL RESULTS
Slide 6: 6M23 Financial results: FFO at €0.31 per share
6M23 Financial results | FFO AT € 0.31 PER SHARE (€ million) 6M23 6M22 YoY Gross rents 237.8 222.6 +6.9% Gross rents after incentives 222.4 209.3 +6.3% Net rents(1) 201.1 186.4 +7.9% EBITDA(2) 181.7 165.8 +9.6% Margin 76.4% 74.5% 126.3 PF +16.7% PF FFO(3) 147.4 157.5 excl. Tree (6.4%) excl. Tree Mar
Slide 7: GRI bridge: outstanding LfL growth in the period
6M23 Financial results | GRI bridge OUTSTANDING LFL GROWTH IN THE PERIOD (+7.7%) (€m) +7.5% Offices LfL(1) +7.7% +4.3% Logistics +10.5% Shopping centers +16.2 237.8 222.6 (1.0) 6M22 Like-for-Like Balance acquisitions, 6M23 growth disposals & other 7 (1) Portfolio in operation for 6M22 (€ 210.3m of G
Slide 8: Occupancy and WAULT
6M23 Financial results | Occupancy and WAULT OVERALL OCCUPANCY +12 BPS VS 3M23 Occupancy and WAULT to first break per asset type(1) 96.4% 96.4% 98.2% 94.9% MERLIN Average 92.3% 7.1 3.4 3.4 3.2 2.3 MERLIN Average Offices Logistics Shopping centers Other 8 (1) WAULT by rents means the weighted average
Slide 9: Offices
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Slide 10: Offices | GRI bridge and breakdown
Offices | GRI bridge and breakdown LFL RENT INCREASE (+7.5%) AND RELEASE SPREAD (+3.2%) VS 6M22 LfL(1) (€m) +7.5% 119.6 +8.5 127.1 (1.0) 6M22 Like-for-Like growth Balance acquisitions, 6M23 disposals & other LfL growth by area Occupancy by area 6M22 6M23 Madrid +8.3% Madrid 87.9% 90.0% +214 bps Barc
Slide 11: Offices | Leasing activity
Offices | Leasing activity Contracted sqm #Renewed contracts Release spread Tenants contracted Madrid 123,617 101 +2.1% Barcelona 35,942 45 +7.7% Lisbon 3,280 4 +6.9% Total 162,839 150 +3.2% 11
Slide 12: Offices | Flex space
Offices | Flex space 1 NEW SPACE OPENED IN THE PERIOD AND 1 MORE TO COME BEFORE YEAR-END KPIs 26,748 sqm 2,711 desks 85% occupancy 12 spaces € 380 ADR(1) New openings 2023 D E N E P O C85. 196 desks Pza. Cataluña. 80 desks (extension) 12 (1) ADR: Average monthly desk rate
Slide 13: Logistics
LOGISTICS
Slide 14: Logistics | GRI bridge and breakdown
Logistics | GRI bridge and breakdown GOOD ORGANIC PERFORMANCE (+4.3% LFL) COUPLED WITH RENTAL GROWTH OFFSETTING TENANT ROTATION LfL(1) (€m) +4.3% 35.6 +1.5 +2.6 39.7 6M22 Like-for-Like growth Balance acquisitions, 6M23 disposals & other LfL growth by location Occupancy by area 6M22 6M23 98.8% PF Mad
Slide 15: Logistics | Leasing activity
Logistics | Leasing activity Contracted sqm #Renewed contracts Release spread Tenants contracted Madrid 49,554 4 +4.4% Barcelona 16,398 1 +15.9% Other 17,253 1 - Total 83,205 6 +9.3% 15
Slide 16: Logistics | ZAL Port
Logistics | ZAL Port STEADY PERFORMANCE OF ZAL PORT WITH HIGH OCCUPANCY LEVELS AND STRONG FFO GENERATION Stock 736,217 sqm Third parties stock (ground leases) 183,252 sqm Stock under management 919,636 sqm Tenants Contracted sqm Release spread # contracts 100,101 +0.7% 29 Occupancy by area 6M22 100%
Slide 17: Shopping Centers
SHOPPING CENTERS
Slide 18: Shopping centers | GRI bridge and breakdown
Shopping centers | GRI bridge and breakdown TENANT SALES SURPASSING PRE-COVID LEVELS WHILE MAINTAINING HISTORICALLY LOW OCR AT 11.7% LfL(1) (€m) +10.5% 60.7 +5.7 64.2 (2.2) 6M22 Like-for-Like growth Balance acquisitions, 6M23 disposals & other Footfall evolution Tenant sales evolution 6M23 vs 6M22 +
Slide 19: Shopping centers | Occupancy at record-high levels
Shopping centers | GRI bridge and breakdown OCCUPANCY AT RECORD-HIGH LEVELS (96.4%) Release spread # contracts Tenants All portfolio +10.0% 104 Contracted sqm Net absorption Occupancy 30/06/23 Change vs 31/06/22 (bps) Total 20,999 432 96.4% +209 19
Slide 20: Valuation and Debt Position
VALUATION AND DEBT POSITION
Slide 21: Valuation and debt position | GAV summary
Valuation and debt position | GAV summary SLIGHT DECLINE IN VALUATION ACROSS THE PORTFOLIO (1.4% LFL), DESPITE STRONG OPERATING PERFORMANCE Gross yield 4.6% 5.4% 5.9% - 4.8% 4.9% 11,301 10,621 6,289 GAV TOTAL with minority stakes (€ million) Data Centers WIP(1) Shopping centers 2,059 Minority stakes
Slide 22: Valuation and debt position | GAV drivers
Valuation and debt position | GAV drivers YIELD EXPANSION OF +28 BPS ACROSS THE BOARD +4.1% Driven by logistics development GAV LIKE-FOR-LIKE EVOLUTION(1) (1.4%) MERLIN average(2) (2.5%) (2.9%) Offices Logistics Shopping centers +32 +28 bps MERLIN +24 +20 YIELD average (COMPRESSION) / EXPANSION(3) O
Slide 23: Sound financial structure: LTV at 33.9%
Valuation and debt position | Sound financial structure LTV STANDS AT 33.9% 30/06/2023 31/12/2022 Net debt € 3,935m € 3,792m LTV 33.9% 32.7% Average cost 2.26% 1.98% Fixed rate debt 98.0% 99.6% Average maturity (years) 5.3 4.9 Liquidity(1) (€ million) 1,034 1,856 Rating Outlook BBB Positive Baa2 Pos
Slide 24: Sound financial structure: debt maturities
Valuation and debt position | Sound financial structure 2023 MATURITY (€ 743M) REFINANCED AT A COMPELLING COST (MS +126 BPS). NO FURTHER MATURITIES UNTIL MAY 2025 872 727 602 622 502 531 800 725 302 600 600 500 500 300 1 2 2 1 2 2 72 2 2 2 29 22 2023 2024 2025 2026 2027 2028 2029 2030 > 2031 Unsecur
Slide 25: Sustainability
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Slide 26: Sustainability | 6M23 Milestones
Sustainability | 6M23 MILESTONES INTENSE YEAR IN TERMS OF ESG INITIATIVES 2 main milestones achieved this semester Strong progress in our Implementation Pathway to Net Zero of the green clause 26
Slide 27: Value Creation
VALUE CREATION
Slide 28: Value creation | Investments & divestments
Value creation | Investments & divestments Investments Non-core divestments • Expansion of Marineda shopping center •2 Shopping centers (18,232 sqm) • Industrial warehouse 28
Slide 29: 2023 deliveries: Plaza Ruiz Picasso
Value creation | 2023 deliveries: Plaza Ruiz Picasso VIRTUALLY FULLY LET TO TIER-1 TENANTS AT PRIME RENTS GLA 36,899 sqm Delivery After Refurbishment 2023 5,323 sqm created 29
Slide 30: 2023 deliveries: P.E. Cerro de los Gamos (Phase I)
Value creation | 2023 deliveries: P.E. Cerro de los Gamos (Phase I) After Before GLA Leasing 36,861 sqm Delivered I - 100% (4,338 sqm) After Refurbishment +756 sqm created in July IV - 100% (6,488 sqm) 30
Slide 31: Value creation | Pending Capex
Value creation | Pending Capex 160k sqm with agreed Head of Terms +20k sqm speculative 84k sqm 20k sqm Cabanillas Park II To start construction 2H23 (1) 14k sqm San Fernando III 61k sqm Total remaining Lisboa park investment € 109m 2k sqm Sevilla Zal YoC(2) Agreed HoT 7.4% Speculative (1) 47k sqm al
Slide 32: Digital Infrastructure Plan (MEGA)
DIGITAL INFRASTRUCTURE PLAN (MEGA)
Slide 33: Construction: Bilbao-Arasur
Digital Infrastructure Plan | Construction Bilbao-Arasur MAIN DATES Licensing: February 2022 Start of development: April 2022 Early access: 15th of September 2023 Final delivery date: 29th of September 2023 KEY MILESTONES Facade construction: Already completed Building construction: 90% completed In
Slide 34: Construction: Madrid-Getafe
Digital Infrastructure Plan | Construction Madrid-Getafe MAIN DATES Licensing: July 2022 Start of development: July 2022 Early access: Already granted to anchor tenant Final delivery date: 29th of September 2023 KEY MILESTONES Facade construction: 95% completed. Finishing the installation of the PV
Slide 35: Construction: Barcelona-PLZF
Digital Infrastructure Plan | Construction Barcelona-PLZF MAIN DATES Licensing: July 2022 Start of development: August 2022 Early access: Already granted to anchor tenant Final delivery date: 29th of September 2023 KEY MILESTONES Facade construction: 95% completed. Finishing the installation of the
Slide 36: Digital Infrastructure Plan | Construction
Digital Infrastructure Plan | Construction Data Hall Cooling system (aireblocks) Generator sets Data Hall (hot aisle) Cooling system (chillers) Meet Me Room (MMR) 36
Slide 37: Digital Infrastructure Plan | Capex update
Digital Infrastructure Plan | Capex update Incurred Jun-23 Expected Dec-23 Additional equipment € 200m € 290m + € 102m 3 fully built shells + 9MW + 24MW 37
Slide 38: Commercialization & GRI
Digital Infrastructure Plan | Commercialization & GRI GRI 236 MW 2023 2024 € 1.1m € 11.2m 82 MW 70 MW Options and 15 MW additional demand 12 MW Advanced negotiations 2.0- 5.0 MW Advanced negotiations 2.6 MW Pre-let 4.2 MW Demonstration phase Expansion phase Full development phase 2024 2027 +2035 38
Slide 39: Outlook 2023
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Slide 40: Outlook 2023 | Guidance
Outlook 2023 | Guidance Guidance Old New FFO € 0.58 p.s. € 0.60 p.s. (€ 0.54 p.s AFFO) Ordinary dividend € 0.44 p.s. 40
Slide 41: Closing Remarks
a CLOSING REMARKS
Slide 42: Closing remarks | Operations
Closing remarks | Operations ERLIN has delivered strong performance in all key operating metrics (occupancy, LfL rental growth, M release spread and FFO generation) • Occupancy at sound levels in all three asset classes (+12 bps vs. 31/03/2023) with offices resilient and record-levels in logistics a
Slide 43: Contact details
Paseo de la Castellana, 257 28046 Madrid +34 91 769 19 00 info@merlinprop.com www.merlinproperties.com
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