Merlin Properties Socimi, S.a. · BME:MRL
Merlin Properties Socimi — Merlin Pptys Socimi Ord — FY2023 Earnings Presentation
43 slides from Merlin Properties Socimi's earnings presentation, Feb 29, 2024
Slide 1: FY23 Results Presentation
FY23 RESULTS PRESENTATION 29 FEBRUARY 2024
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
■ FY23 Financial results ■ Offices ■ Logistics ■ Shopping centers CONTENTS ■ Valuation and debt position ■ Sustainability ■ Value creation Ismael Clemente Miguel Ollero CEO COO ■ Digital Infrastructure Plan ■ Closing remarks & Outlook
Slide 4: Key highlights | Overview: A year of Alpha
Key highlights | Overview: A year of Alpha Operating performance • R obust operating performance overall, with strong LfL rental growth (+6.5%) and occupancy at an all-time high (96.2%) • O ffices continue performing well demonstrated by positive release spread (+1.2%), healthy LfL growth (+6.1%) an
Slide 5: FY23 Financial Results
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Slide 6: FFO of €0.61 per share, exceeding guidance
FY23 Financial results FFO OF € 0.61 PER SHARE, EXCEEDING GUIDANCE (€ million) FY23 FY22 YoY Gross rents 475.6 452.8 +5.0% Gross rents after incentives 447.2 428.2 +4.5% Net rents(1) 403.7 378.9 +6.6% EBITDA(2) 367.0 334.7 +9.7% Margin 77.2% 73.9% FFO(3) 284.2 290.5 (2.1%) Margin 59.8% 64.1% AFFO 26
Slide 7: Outstanding LfL growth in the period (+6.5%)
FY23 Financial results | GRI bridge OUTSTANDING LFL GROWTH IN THE PERIOD (+6.5%) (€m) +6.1% Offices LfL(1) +4.8% Logistics +6.5% +7.7% Shopping centers +27.6 475.6 452.8 (4.8) FY22 Like-for-Like Balance acquisitions, FY23 growth disposals & other 7 (1) Portfolio in operation for FY22 (€ 424.8m of GR
Slide 8: Occupancy and WAULT
FY23 Financial results | Occupancy and WAULT OVERALL OCCUPANCY +110 BPS VS FY22, RECORD HIGH OCCUPANCY FOR THE PORTFOLIO Occupancy and WAULT to first break per asset type(1) +110 bps 99.0% 96.2% 98.0% 96.2% n.a. MERLIN 11.0 Average 92.5% 6.6 3.3 3.2 3.1 MERLIN 2.3 Average Offices Logistics Shopping
Slide 9: Offices
OFFICES
Slide 10: Offices | GRI bridge and breakdown
Offices | GRI bridge and breakdown LFL RENT INCREASE (+6.1%) AND RELEASE SPREAD (+1.2%) LfL(1) (€m) +6.1% 242.7 +14.0 254.8 (1.9) FY22 Like-for-Like growth Balance acquisitions, FY23 disposals & other LfL growth by area Occupancy by area FY22 FY23 Madrid +7.2% Madrid 90.6% 91.1% +47 bps Barcelona +6
Slide 11: Offices | Leasing activity
Offices | Leasing activity Contracted sqm #Renewed contracts Release spread Tenants contracted Madrid 227,743 102 +0.7% Barcelona 69,729 44 +2.5% Lisbon 4,326 4 +1.2% Total 301,798 150 +1.2% 11
Slide 12: Offices | Flex space
Offices | Flex space 1 NEW SPACE OPENED IN THE YEAR KPIs 26,748 sqm 2,703 desks 84% occupancy 12 spaces € 375 ADR(1) New opening 2023 5 new openings in 2024 Castellana 85. 275 desks Plaza Cataluña 9. exp. 80 desks Plaza Cataluña 9 has received the Architizer A+ Award for the best co-working in the w
Slide 13: Logistics
LOGISTICS
Slide 14: Logistics | GRI bridge and breakdown
Logistics | GRI bridge and breakdown VIRTUAL FULL OCCUPANCY COUPLED WITH RENTAL GROWTH RESULTED IN A GOOD LFL GROWTH (+4.8%) LfL(1) (€m) +4.8% 73.6 +3.5 +3.2 80.3 FY22 Like-for-Like growth Balance acquisitions, FY23 disposals & other LfL growth by location Occupancy by area FY22 FY23 Madrid +2.8% Ma
Slide 15: Logistics | Leasing activity
Logistics | Leasing activity Contracted sqm #Renewed contracts Release spread Tenants contracted Madrid 251,987 9 +2.9% Barcelona 26,564 3 +12.7% Other 19,351 1 - Total 297,902 13 +5.2% 15
Slide 16: Logistics | ZAL Port
Logistics | ZAL Port STRONG PERFORMANCE Stock 757,003 sqm Third parties stock (ground leases) 162,633 sqm Stock under management 919,636 sqm Tenants Contracted sqm Release spread # contracts 103,061 - 30 Occupancy by area FY22 99.7% (279 bps) FY23 96.9% €m FY23 FY22 YoY Gross rents 74.8 72.0 +4.0% N
Slide 17: Shopping Centers
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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) +7.7% 123.8 +8.6 125.8 (6.6) FY22 Like-for-Like growth Balance acquisitions, FY23 disposals & other Footfall evolution(2) Tenant sales evolution OCR evolut
Slide 19: Shopping centers | Occupancy at record-high levels
Shopping centers | GRI bridge and breakdown OCCUPANCY AT RECORD-HIGH LEVELS (96.2%) Release spread # contracts Tenants All portfolio +12.1% 84 Contracted sqm Total 38,672 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 PORTFOLIO YIELDS ABOVE 5% AND DATA CENTERS IN OPERATION APPRAISED FOR THE FIRST TIME Passing yield 4.7% 5.6% 6.1% - - 5.1% 11,270 10,597 6,191 GAV TOTAL with minority stakes (€ million) Shopping centers 2,006 Minority stakes Data Centers 1,410 Logistics Offi
Slide 22: Valuation and debt position | GAV drivers
Valuation and debt position | GAV drivers 42 BPS EXPANSION DURING THE YEAR ACROSS THE PORTFOLIO +3.0% +0.1% excluding developments GAV LIKE-FOR-LIKE (3.4%) EVOLUTION(1) MERLIN average(2) (4.7%) (6.4%) excluding developments (5.2%) Offices Logistics Shopping centers +54 +34 +39 +42 bps MERLIN average
Slide 23: Valuation and debt position | Sound financial structure
Valuation and debt position | Sound financial structure 31/12/2023 31/12/2022 Net debt € 4,050m € 3,792m LTV 35.0% 32.7% Average cost (spot) 2.38% (2.71%) 1.98% (2.00%) Fixed rate debt 99.7% 99.6% Average maturity (years) 5.1 4.9 Liquidity(1) (€ million) 1,309 1,856 Rating Outlook BBB Positive Baa2
Slide 24: Sound financial structure | Debt maturities and refinancing
502 182 2 725 800 302 Valuation and debt 600 position | Sound 500 financial structure 2 600 500 187 2025 REFINANCING ALREADY TACKLED, DEMONSTRATING ONCE AGAIN A PRO-ACTIVE LIABILITY MANAGEMENT 17 300 22 2 2 € 180m 170 € 170m € 150m € 100m 22 7-yr mortgage loan 10-yr mortgage loan 10-yr mortgage loan
Slide 25: Sustainability
SUSTAINABILITY
Slide 26: Sustainability | Achievements
Sustainability | Achievements 1. Green clause in all new contracts 5. Inclusion in the Dow Jones Sustainability World Index (only 5 European 2. Embodied carbon companies) for the 1st time 5 main maximum limits and inclusion for the 3rd year milestones Offices Logistics Shopping centers in a row in t
Slide 27: Sustainability | Environmental performance
Sustainability | Environmental performance 111,527 109,126 (2.2%) 2022 2023 2,570 2,422 (6.1%) 2022 2023 27
Slide 28: Sustainability | FY23 Update
Sustainability | FY23 UPDATE OUTSTANDING YEAR IN TERMS OF SCORINGS AND ACCOLADES Inclusion for MERLIN B Average score B C 7.2 Top 1% 3 year in a row in the Europe DJSI rd A- Financial Europe Global (negligible risk) +1st time in the World DJSI services average 83% 69% #1 Average peers: 69% Average s
Slide 29: Value Creation
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Slide 30: Value creation | Investments & divestments
Value creation | Investments & divestments Investments Non-core divestments • Expansion of Marineda shopping center •2 Shopping centers •R esidential unit (18,232 sqm) • Industrial warehouse •S upermarket 30
Slide 31: 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 Delivered in December to After Refurbishment 5,323 sqm created 31
Slide 32: 2023 deliveries: Cerro de los Gamos (Phase I)
Value creation | 2023 deliveries: 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) 32
Slide 33: Logistics roll-out: commercialization & pending capex
Value creation | Logistics roll-out: commercialization & pending capex 160k sqm with agreed Head of Terms +28k sqm speculative To be delivered by Cabanillas Park II 106k sqm(1) 2Q25(1) San Fernando III 14k sqm Total remaining 28k sqm investment Lisboa Park € 78m 34k sqm Expected stabilized GRI € 10.
Slide 34: Logistics roll-out: commercialization & pending capex
Value creation | Logistics roll-out: commercialization & pending capex 417k sqm Mid & long term pipeline Cabanillas Park II 56k sqm Pending Capex Azuqueca III 53k sqm € 223m San Fernando III 57k sqm 98k sqm Lisboa Park Valencia-Bétera 96k sqm Expected stabilized GRI 51k sqm € 23.8m Sevilla Zal 6k sq
Slide 35: Digital Infrastructure Plan (MEGA)
DIGITAL INFRASTRUCTURE PLAN (MEGA)
Slide 36: Digital Infrastructure Plan | Main highlights
Digital Infrastructure Plan | Main highlights Delay in the Capex increase due Phase I extended Expected YoC electrification of sites to Direct Liquid Cooling (DLC) to 60 MW maintained €m 163 565 14.4% Stabilized GRI 144 YoC 258 (1) >10% CAPEX Stabilized NOI YoC FY23 Invested 2024 2025+ Total investm
Slide 37: Madrid-Getafe data center status update
Digital Infrastructure Plan | Madrid-Getafe data center status update MAD01-GET Electricity Equipment Commercialization • 20 MW full IT capacity • 30 MW utility sourced • 3 MW IT installed as of FY23 •2 MW IT capacitiy let for 20 MW IT pending as of FY23 supply by Iberdrola Calendar for pending 17 M
Slide 38: Barcelona-PLZF data center status update
Digital Infrastructure Plan | Barcelona-PLZF data center status update BCN01-PLZF Electricity Equipment Commercialization • 16 MW full IT capacity • 8 MW IT repowering opportunity • 24 MW utility sourced • 3 MW IT installed as of FY23 • 1 MW IT capacitiy let for 16 MW IT. Endesa to • +6 MW IT to be
Slide 39: Bilbao-Arasur data center status update
Digital Infrastructure Plan | Bilbao-Arasur data center status update BIO03-ARA Electricity Equipment Commercialization Future • 24 MW full IT capacity (Phase I) developments • 76 MW potential IT capacity (Phase II) • 150 MW utility sourced • 3 MW IT installed • 3 MW IT capacitiy let • Extension lic
Slide 40: Lisbon-VFX data center status update
Digital Infrastructure Plan | Lisbon-VFX data center status update LIS01-VFX Electricity Key milestones completed Key milestones to be • 100 MW IT capacity in 2023 completed in 2024 • 130 MW utility sourced for Approval of the urbanization project onstruction license C 100 MW IT to be received Begin
Slide 41: Closing Remarks & Outlook
CLOSING REMARKS & OUTLOOK
Slide 42: Closing remarks & Outlook
Closing remarks & Outlook | Operations • MERLIN has delivered a strong performance in all key financial and operating metrics (LfL rental growth, occupancy, release spread and FFO generation) • Occupancy at an all-times high across the board Value creation • Plaza Ruiz Picasso virtually fully-let an
Slide 43: Contact
Paseo de la Castellana, 257 28046 Madrid +34 91 769 19 00 info@merlinprop.com www.merlinproperties.com
Merlin Pptys Socimi Ord — FY2023 Earnings Presentation on 6ix