Merlin Properties Socimi, S.a. · BME:MRL
Merlin Properties Socimi — Investor Presentation (September 2016)
63 slides from Merlin Properties Socimi's investor presentation, September 2016
Slide 1: Merlin Properties Company Overview
MERLIN PROPERTIES COMPANY OVERVIEW SEPTEMBER 2016
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared by Certain statements in this document presentation in other jurisdictions may RELIED ON IN CONNECTION WITH ANY MERLÍN Properties, SOCIMI, S.A. (the regarding the market and competitive also be restricted by law and persons CONTRACT OR COMMITMENT TO SEL
Slide 3: Company Overview
COMPANY OVERVIEW September 2016 ERLIN at a glance M 4 Deepening on Metrovacesa Integration 9 ortfolio performance P 25 Investment activity 31 ppendix A 37
Slide 4: MERLIN at a glance
MERLIN AT A GLANCE
Slide 5: MERLIN at a glance: a clearly defined strategy
MERLIN at a glance Strategy A CLEARLY DEFINED STRATEGY Company Assets Listed REIT, member of the Spanish F ocused on high quality commercial real estate Stock Exchange (IBEX-35), with a large, (Core/Core Plus) diversified, high-yielding asset base T arget portfolio by 2018: Office (40%) high-street
Slide 6: Two intense years to position MERLIN as reference player
MERLIN at a glance History TWO INTENSE YEARS TO POSITION MERLIN AS THE REFERENCE PLAYER IN THE SPANISH REAL ESTATE INDUSTRY AND AMONG THE TOP 10 EUROPEAN REITS Acquisition of Acquisition of Acquisition of Testa for an equity Acquisition of Tree portfolio 17 assets for value of Acquisition of 43 3 lo
Slide 7: Integration of Metrovacesa brings a change in scale
MERLIN at a glance Fast facts Fast facts THE INTEGRATION OF METROVACESA BRINGS A CHANGE IN SCALE ACROSS ALL METRICS GLA GLA GRI(1) NET RENTS 3,048,864 sqm 502,915 sqm € 448 m € 404 m IN STOCK EXPANSION PROJECTS ANNUALIZED ANNUALIZED PF 2016 EPRA EPRA 90% € 282 m 5.1% 4.6% GRI/NRI RATIO RECURRING FFO
Slide 8: #1 player in office, high street retail and logistics
MERLIN at a glance Portfolio #1 PLAYER IN OFFICE, HIGH STREET RETAIL AND LOGISTICS + #2 PLAYER IN SHOPPING CENTERS #1 #1 #1 #2 Office High street retail Logistics Shopping Centers • Capacity to relocate tenants • Negotiation power • “One-stop-shop” solution • Reference landlord for top within MERLIN
Slide 9: Deepening on Metrovacesa Integration
DEEPENING ON METROVACESA INTEGRATION ı9ı
Slide 10: Among the top 10 Euro REITs and undisputed Spanish leader
Deepening on MVC Integration AMONG THE TOP 10 EURO REITS AND UNDISPUTED SPANISH LEADER Europe’s largest diversified pure commercial REIT(1) By GAV(2) (€ billion) 37.8 22.1 18.7 18.5 12.3 11.6 11.0 9.6 9.2 9.1 37.8 UK players Continental European players 22.1 18.7 18.5 12.3 11.6 11.0 9.3 Player Shopp
Slide 11: Larger, broader, stronger: breakdown by asset class
Deepening on MVC Integration LARGER, BROADER, STRONGER 1 2 3 Breakdown by asset class(1) MERLIN pre-transaction MERLIN post-transaction MERLIN pro forma (Excluding non-core) 6%(2) 2% (3) 5%(2) 2% 4% 3% 9%(5) 5% 7% 6% 37% 44% 47% 11% 19% 18% 31% 21% 23% €6.5 Bn(4) €9.6 Bn(4) €9.1 Bn Office High stree
Slide 12: Larger, broader, stronger: yield and occupancy
3.3 2.9 4.1 3.8 Deepening on MVC Integration Office High street Shopping Logistics Hotels LARGER, BROADER, STRONGER retail centers 1 2 3 Pro-formaWAULT EPRA gross yield perOccupancy (years) asset type(1)(2) (%) 6.9% 5.6% 5.7% 4.6% 4.8% 5.1% AVERAGE GROSS YIELD Office High street Shopping Logistics H
Slide 13: Larger, broader, stronger: occupancy and WAULT
Deepening on MVC Integration LARGER, BROADER, STRONGER 1 2 3 Pro-forma Occupancy and WAULT(1) per asset type • #1 irreplicable office portfolio with shorter (years) WAULTS • Dramatic scale-up in 100.0% 98.2% 100.0% 89.8% shopping centers to 84.1% 80.1% AVERAGE benefit from the Spanish OCCUPANCY 20.2
Slide 14: Reinforced investment grade credit
Deepening on MVC Integration REINFORCED INVESTMENT GRADE CREDIT (BBB / STABLE BY S&P) WITH ENHANCED BUSINESS PROFILE, LOWER LEVERAGE AND IMPROVED FINANCIAL RATIOS 1 2 Key metrics (as of Mar-16) Policy MERLIN pre-transaction(1) MERLIN post-transaction Gross debt 3,154 4,724 Net debt 3,124 4,550 Undra
Slide 15: Combined debt maturity profile and breakdown
Deepening on MVC Integration REINFORCED INVESTMENT GRADE CREDIT (BBB / STABLE BY S&P) WITH ENHANCED BUSINESS PROFILE, LOWER LEVERAGE AND IMPROVED FINANCIAL RATIOS 1 2 Combined debt maturity profile(1) Combined debt breakdown 3% 3% 1,303 83 1,013 34% 637 914 721 30% 64 137 21 15 22 500 17 86 1,220 70
Slide 16: Tangible embedded upside in Metrovacesa's portfolio
Deepening on MVC Integration TANGIBLE EMBEDDED UPSIDE IN METROVACESA’S PORTFOLIO… Significant upside in MVC’s recurrent FFO € per share (€€million) 0.57 € 0.60 MERLIN FFO MVC FFO € 0.73 (€ million) MERLIN FFO MVC FFO 21 19 343 282 2 20 267 328 20 21 19 146 267 85 852 146 85 182 197 197 182 182 Pro-f
Slide 17: Overhead tightened and reduced stock plan
Deepening on MVC Integration OVERHEAD TIGHTENED AND REDUCED STOCK PLAN Management commitment to tighten overheads cap and adjust stock plan PRE-TRANSACTION POST-TRANSACTION 2018-2019 2020 ONWARDS 6% 5.75% 5.5% OVERHEADS GREATER OF GRI OF GRI OF GRI CAP OF 0.6% 0.575% 0.55% OF NAV OF NAV OF NAV ABOVE
Slide 18: Office leadership reinforced by increased CBD presence
Deepening on MVC Integration OFFICE LEADERSHIP REINFORCED BY INCREASED CBD PRESENCE AND DIVERSIFICATION 1 2 MERLIN post-transaction office KPIs(1) Enlarged presence in Madrid and Barcelona CBD(2) GLA Evolution (‘000 sqm) 84 1,159,750 sqm 340 # ASSETS GLA 1.7x 63 202 €4,172 m €3,598/sqm GAV CAPITAL V
Slide 19: Office portfolio breakdown
Deepening on MVC Integration OFFICE LEADERSHIP REINFORCED BY INCREASED CBD PRESENCE AND DIVERSIFICATION 1 2 Portfolio breakdown 4% 11% 11% 11% 83% 13% 47% 83% 42% 47% 42% 47% 29% 42% 71% 29% 4% 4%4% 11%11%11% 4% 4% 13%13%13% 4% 83%83% 83% 11% 47% 47%47% BY42% 11% 11% 42% 42% 29% BY 71%71%71% 29%29%
Slide 20: Dramatic scale-up in shopping centers
Deepening on MVC Integration DRAMATIC SCALE-UP IN SHOPPING CENTERS, BECOMING #2 PLAYER IN SPAIN 1 2 MERLIN post-transaction shopping centers KPIs(1) Significant upgrade in scale… GLA Evolution (‘000 sqm) 20 €95 m 20 # ASSETS GRI 531 3.2x 531,165 sqm 5.6% GLA GROSS YIELD 6 164 €1,713 m 80%/87%(3) GAV
Slide 21: Ranking of Spanish shopping center players
Deepening on MVC Integration DRAMATIC SCALE-UP IN SHOPPING CENTERS, BECOMING #2 PLAYER IN SPAIN 1 2 …on par with the #1 player Ranking of Spanish shopping center players Player Owned GLA (sqm) 1 Unibail-Rodamco 570k sqm 2 MERLIN 531k sqm 3 Klepierre 359k sqm 4 CBRE GI ~ 325k sqm(2) 5 LAR 312k sqm (2
Slide 22: Leading logistics platform
Deepening on MVC Integration LEADING LOGISTICS PLATFORM Logistics KPIs WIP to boost stock GLA within the next 2 years Existing (100% attributed) ’000 sqm 326 1,667 79 €20m/€43.5m 380 # ASSETS GRI(1) 471 1,161,796 6.9%/8.0% 455 GLA GROSS YIELD(1) €290m/€543m 98.2%/93.3% Owned assets WIP CILSA (ZAL) S
Slide 23: Enhanced options for non-core businesses: residential
Deepening on MVC Integration ENHANCED OPTIONS FOR NON-CORE BUSINESSES 1 2 Pro-forma Rented residential KPIs(1) Geographical split 16% Madrid 47 4,706 91% San Sebastian # ASSETS # UNITS OCCUPANCY 16% Madrid 4% SanPamplona Sebastian 4% €35 m 3.4% €1,032 m 5% 63% Pamplona Mallorca GRI GROSS YIELD GAV 5
Slide 24: Enhanced options for non-core businesses: hotels
Deepening on MVC Integration ENHANCED OPTIONS FOR NON-CORE BUSINESSES 1 2 Pro-forma Hotels KPIs(1) Hotels GAV evolution GLA Evolution (€ million) 24 4,495 100% 24 # ASSETS # ROOMS OCCUPANCY 12 654 €38 m 5.5% 5.6% 398 GRI GROSS YIELD ERV YIELD 1.6x €669 m €158k 3.6 years MERLIN MERLIN GAV GAV PER ROO
Slide 25: Portfolio performance
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Slide 26: Record period in letting activity
Portfolio performance 1H 2016 Leasing activity RECORD PERIOD IN LETTING ACTIVITY WITH 311K SQM CONTRACTED Offices Shopping Logistics Logistics Minority centers stock pre-let stakes 77,400 49,719 48,468 46,149 22,596 21,579 13,873 17,276 13,851 (506) (4,536) (918) (18,387) (23,102) (18,193) 68% renew
Slide 27: Attracting leading clients
Portfolio performance Clients ATTRACTING LEADING CLIENTS Office Renewal In In In 10,732 sqm 1,718 sqm 3,015 sqm 4,667 sqm Principe de Vergara 187 Padres Dominicos T4 Juan Esplandiú, 11-13 Aquamarina Shopping centers Renewal Renewal In Renewal 5,389 sqm 4,177 sqm 11,984 sqm 2,026 sqm Larios Marineda
Slide 28: Real, positive LfL rental growth across the board
Portfolio performance LfL Rental growth REAL, POSITIVE LFL RENTAL GROWTH ACROSS THE BOARD Commercial annualized LfL rent evolution (passing 30/06/16 vs. passing 31/12/15) LfL effect % LfL % LfL % # Rent In Same Renewed Leases Change Occupancy CPI Rent total space Office 12% 40 (1,162) (811) (172) (1
Slide 29: Retail metrics outperforming the market
Portfolio performance Shopping centers evolution RETAIL METRICS OUTPERFORMING THE MARKET LTM Footfall LTM Footfall LTM Sales LTM Sales (million) evolution (million) evolution Marineda 16.7 6.6% 165.1 4.8% 4.9 8.0% 25.7 5.4% Arturo Soria 6.9 4.1% 45.5 1.9% Centro Oeste 9.2 21.4% 88.0 8.9% Porto Pi 11
Slide 30: LEED/BREEAM program new certificates
Portfolio performance LEED/BREAAM program 3 NEW CERTIFICATES OBTAINED TO A TOTAL OF 7 OFFICE BUILDINGS + 2 SHOPPING CENTERS EUCALIPTO 25 EUCALIPTO 33 PARTENON 16-18 AV. BRUSELAS 33 PEDRO VALDIVIA 10 PARTENON 12-14 CASTELLANA 83-85 LARIOS PORTO PI NEW NEW NEW ı 30 ı
Slide 31: Investment activity
INVESTMENT ACTIVITY ı 31 ı
Slide 32: Saba Parques Logisticos
Investment activity Saba Parques Logisticos DESCRIPTION SABA Parques Logísticos S.A. • Saba Parques Logísticos (SPL) is a reference player in logistics in Spain, 75.6% 60% 44.4% 100% 100% Total Parc Logistic Zal Arasur CIM Vallés SPL owning landmark assets such as Parc de la Zona Sevilla Lisboa Logi
Slide 33: Saba Parques Logisticos - PLZF location
Investment activity Saba Parques Logisticos - PLZF EXCELLENT LOCATION IN “MAIN & MAIN” LOGISTICS AREA OF BARCELONA 1ST ISOCHRONE ADJACENT TO ZAL PRAT AND ZAL BARCELONA (OPERATED BY MERLIN PROPERTIES) PLZF ZAL BCN ZAL Prat El Prat Airport Port of Barcelona ı 33 ı
Slide 34: PLZF top-tier tenants
Investment activity Saba Parques Logisticos – PLZF TOP-TIER TENANTS: CORREOS, AIR PHARMA, LOGISTA, ASM, CELLNEX, ABERTIS ı 34 ı
Slide 35: Saba Parques Logisticos - ZAL Sevilla
Investment activity Saba Parques Logisticos – ZAL Sevilla EXPANDING FOOTPRINT TO MAIN LOGISTICS HUB IN SOUTHERN SPAIN WITH TOP TENANTS SUCH AS DECATHLON, AIRBUS, NORBERT DENTRESSANGLE ı 35 ı
Slide 36: Asset disposals: BBVA branches sold
Assets disposals 100% OF BBVA BRANCHES SOLD LOCATED IN PERIPHERAL PRIME LOCATIONS Proceeds Gain over Dec-15 GAV SOLD €27.4m +26.9% PIPELINE €15.9m +21.6% ı 36 ı
Slide 37: Appendix
APPENDIX ı 37 ı
Slide 38: Office - Madrid
Appendix Office - Madrid ı 38 ı
Slide 39: Office - Madrid prime and CBD
Appendix Office - Madrid prime and CBD Castellana, 280 Eucalipto, 25 Castellana, 278 Plaza Castilla M-30 Ventas bullring Avda. America Cuzco Eucalipto, 33 Bernabeu Stadium Lima Castellana, 259 Nuevos Ministerios Castellana, 93 Azca a in Ppe. Vergara, 187 ol Prín deM c ipe Gregorio Marañón de V aria
Slide 40: Office - Madrid (I)
Appendix Office - Madrid (I) MERLIN Metrovacesa 1. Torre Castellana 259 2. Castellana 280 3. Castellana 278 City: Madrid City: Madrid City: Madrid Location: CBD Location: CBD Location: CBD GLA: 21,390 sqm GLA: 16,961 sqm GLA: 14,468 sqm 4. Castellana 93 5. Carlos Trías Bertrán 7 6. Castellana 83-85
Slide 41: Office - Madrid (II)
Appendix Office - Madrid (II) MERLIN Metrovacesa 13. Princesa 3 14. Princesa 5 15. Ventura Rodríguez 7 City: Madrid City: Madrid City: Madrid Location: CBD Location: CBD Location: CBD GLA: 17,810 sqm GLA: 17,810 sqm GLA: 10,070 sqm 16. Juan de Mariana 17 17. Juan Esplandiú 11-13 18. Eucalipto 33 Cit
Slide 42: Office - Madrid (III)
Appendix Office - Madrid (III) MERLIN Metrovacesa 25. Santiago de Compostela 94 26. Costa Brava 2-4 27. Isla Chamartin (WIP) City: Madrid City: Madrid City: Madrid Location: NBA Location: Periphery Location: NBA GLA: 9,429 sqm GLA: 16,000 sqm GLA: 16,639 sqm 28. Arroyo de Valdebebas 29. Via Norte 30
Slide 43: Office - Madrid (IV)
Appendix Office - Madrid (IV) MERLIN Metrovacesa 37. Miniparc Alcobendas I 38. Miniparc Alcobendas II 39. Av. de Bruselas 24 City: Madrid City: Madrid City: Madrid Location: NBA Location: NBA Location: NBA GLA: 9,429 sqm GLA: 2,872 sqm GLA: 9,164 sqm 40. Av. de Bruselas 26 41. Av. de Bruselas 33 42.
Slide 44: Office - Madrid (IV)
Appendix Office - Madrid (IV) MERLIN Metrovacesa 49. Partenón 12-14 50. Partenón 16-18 51. Av. de Aragón 334 City: Madrid City: Madrid City: Madrid Location: NBA Location: NBA Location: Periphery GLA: 19,289 sqm GLA: 18,343 sqm GLA: 3,890 sqm 52. Ática 1, 2, 3, 4 53. Ática 6 54. Ática XIX City: Madr
Slide 45: Office - Barcelona
Appendix Office - Barcelona ı 45 ı
Slide 46: Office - Barcelona prime and CBD
Appendix Office - Barcelona prime and CBD -20 B alt Diagonal, 199 Diagonal Mar eD ad Pza. Glories nd Ro Sagrada Familia Barrio de Gracia Balmes, 236 - 238 Diagonal, 458 go nal Parc 22@ Dia Vilanova 12 - 14 ni da Port Olimpic Ave Parc Ciutadella Diagonal, 514 Pase Pza. Cataluña Ram o de bla d Grac Pz
Slide 47: Office - Barcelona (I)
Appendix Office - Barcelona (I) MERLIN Metrovacesa 1. Diagonal 605 2. Diagonal 514 3. Balmes 236-238 City: Barcelona City: Barcelona City: Barcelona Location: CBD Location: CBD Location: CBD GLA: 14,795 sqm GLA: 9,664 sqm GLA: 6,188 sqm 4. Diagonal 458 5. Diagonal 199 6. Poblenou 22@ Llull City: Bar
Slide 48: Office - Barcelona (II)
Appendix Office - Barcelona (II) MERLIN Metrovacesa 13. Muntadas II 14. Sant Cugat I 15. Sant Cugat II City: Barcelona City: Barcelona City: Barcelona Location: NBA Location: NBA Location: NBA GLA: 3,783 sqm GLA: 15,379 sqm GLA: 10,102 sqm ı 48 ı
Slide 49: Shopping centers
Appendix Shopping centers ı 49 ı
Slide 50: Shopping centers (I)
Appendix Shopping centers (I) MERLIN Metrovacesa 1. Marineda 2. Arturo Soria 3. Fnac Callao City: A Coruña City: Madrid City: Madrid GLA: 99,925 sqm Location: 6,959 sqm (1) GLA: 11,648 sqm 4. Centro Oeste 5. Tres Aguas 6. Nassica City: Madrid City: Madrid City: Madrid GLA: 33,000 sqm GLA: 65,890 sqm
Slide 51: Shopping centers (II)
Appendix Shopping centers (II) MERLIN Metrovacesa 13. El Saler 14. Factory Bonaire 15. La Vital City: Valencia City: Valencia City: Gandía GLA: 23,034 sqm Location: 25,066 sqm GLA: 20,853 sqm 16. Thader 17. Larios 18. Monumental City: Murcia City: Malaga City: Lisboa GLA: 48,646 sqm GLA: 45,076 sqm
Slide 52: Logistics - Spain
Appendix Logistics - Spain ı 52 ı
Slide 53: Logistics - Madrid
Appendix Logistics - Madrid ı 53 ı
Slide 54: Logistics - Madrid (I)
Appendix Logistics - Madrid (I) MERLIN Metrovacesa 1. Madrid – Coslada 2. Madrid – Coslada Complex 3. Madrid – Meco I City: Madrid City: Madrid City: Madrid GLA: 28,490 sqm GLA: 36,234 sqm GLA: 35,285 sqm 4. Madrid – Meco II 5. Guadalajara – Azuqueca I 6. Guadalajara – Azuqueca II City: Madrid City:
Slide 55: Logistics - Madrid (II)
Appendix Logistics - Madrid (II) MERLIN Metrovacesa 13. Madrid – Getafe (Gavilanes) 14. Madrid – Pinto City: Madrid City: Madrid GLA: 39,576 sqm GLA: 70,000 sqm ı 55 ı
Slide 56: Logistics - Barcelona
Appendix Logistics - Barcelona ı 56 ı
Slide 57: Logistics - Barcelona
Appendix Logistics - Barcelona MERLIN Metrovacesa 1. Barcelona-ZAL Port 2. Barcelona – Lliça del Vall 3. Barcelona – Sant Esteve City: Barcelona City: Barcelona City: Barcelona GLA: 380,824 sqm GLA: 14,911 sqm GLA: 16,812 sqm 4. Barcelona – Granada Penedés City: Barcelona GLA: 16,758 sqm ı 57 ı
Slide 58: Logistics - Rest of Spain
Appendix Logistics - Rest of Spain MERLIN Metrovacesa 1. Zaragoza – Plaza 2. Zaragoza – Pedrola 3. Valencia – Almussafes City: Zaragoza City: Zaragoza City: Valencia GLA: 20,764 sqm GLA: 21,579 sqm GLA: 26,612 sqm 4. Vitoria - Jundiz City: Vitoria GLA: 72,717 sqm ı 58 ı
Slide 59: High Street Retail
Appendix High Street Retail ı 59 ı
Slide 60: Hotels
Appendix Hotels France
Slide 61: Hotels (I)
Appendix Hotels (I) MERLIN Metrovacesa 1. Eurostars Torre Castellana 5* 2. NH Sanvy 4* 3. Barceló Torre de Madrid 4*(1) City: Madrid City: Madrid City: Madrid Type: Urban Location: Urban Type: Urban GLA: 31,800 sqm GLA: 12,182 sqm GLA: 25,600 sqm #rooms: 474 #rooms: 146 #rooms: 256 4. Paseo del Arte
Slide 62: Hotels (II)
Appendix Hotels (II) MERLIN Metrovacesa 13. Tryp Aeropuerto 4* 14. Eurostars Executive 4* 15. Tryp Oceanic 4* City: Barcelona City: Barberá del Vallés City: Valencia Location: Urban Type: Urban Location: Vacational GLA: 10,125 sqm GLA: 11,800 sqm GLA: 9,308 sqm #rooms: 205 #rooms: 118 #rooms: 197 16
Slide 63: Contact
Paseo de la castellana, 42 28046 MADRID +34 91 787 55 30 info@merlinprop.com www.merlinproperties.com
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