Merlin Properties Socimi, S.a. · BME:MRL
Merlin Properties Socimi — H1 2019 Earnings Presentation
31 slides from Merlin Properties Socimi's earnings presentation, Jul 31, 2019
Slide 1: 6M2019 Results Presentation
6M2019 RESULTS PRESENTATION 31 July 2019
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: Contents
Contents 6M19 Financial results ISMAEL CLEMENTE Portfolio performance CEO Offices Shopping centers Logistics MIGUEL OLLERO GM / COO Valuation and debt position Value creation Closing remarks DAVID BRUSH CIO
Slide 4: Key highlights
Key highlights | Financial performance • +8.0% Rents YoY • +11.6% FFO per share YoY • EPRA NAV per share up 7.5% YoY to reach € 15.11 • DPS guidance of € 0.52 per share reconfirmed • TSR of 4.1% in the period (11.0% LTM) Operating performance • Rental growth very robust across the board • Offices sh
Slide 5: 6M19 Financial results
6M19 Financial results
Slide 6: Strong cash flow generation (+11.6% in FFO per share YoY)
6M19 Financial results | Strong cash flow generation (+11.6% in FFO per share YoY) € million 6M19 6M18 YoY Gross rents 262.7 243.2 +8.0% Gross rents after incentives 253.0 232.2 +9.0% Net rents 228.2 210.7 +8.3% EBITDA(1) 210.4 195.9 +7.4% FFO 157.2 140.9 +11.6% AFFO 151.6 136.1 +11.4% IFRS net prof
Slide 7: Bridge gross rents
6M19 Financial results | Bridge gross rents Robust LfL growth in all asset categories with offices standing out at 8.3% (€m) +8.3% Offices LfL(1) Shopping centers +3.9% +5.7% Logistics +6.2% H. Street retail +2.7% +12.9 +6.6 262.7 243.2 6M 2018 Like-for-Like Balance acquisitions, 6M 2019 growth disp
Slide 8: Offices
Offices
Slide 9: Offices performing strongly in our 3 markets
Offices | Rent bridge and breakdown Offices performing strongly in our 3 markets (€m) LfL(1) +8.3% 110.2 +8.8 +1.3 120.3 6M 2018 Like-for-Like Balance acquisitions, 6M 2019 growth disposals and other Lfl growth by area Occupancy by area 1Q19 2Q19 Madrid +5.5% Madrid 88.3% 88.4% +11 bps Barcelona +20
Slide 10: Offices | Leasing activity
Offices | Leasing activity Rental growth continues robust (+6.1% release spread) Contracted sqm Release spread #contracts Tenants Madrid 207,506 +5.0% 145 PE Cristalia PE Cerro Gamos PE Via Norte Partenon 16-18 2,120 sqm 6,582 sqm 3,853 sqm 1,127 sqm Barcelona 30,553 +14.9% 35 Torre Glòries WTC6 Dia
Slide 11: Shopping centers
Shopping centers
Slide 12: Steady LfL rental growth in the portfolio
Shopping Centers | Rent bridge and breakdown Steady LfL rental growth in the porfolio. Footfall and sales rising in the period (€m) LfL(1) +3.9% +12.1 61.1 47.2 +1.8 6M 2018 Like-for-Like Balance acquisitions, 6M 2019 growth disposals and other Footfall (million) Tenant sales (million) 2018 LTM 107.
Slide 13: Shopping Centers | Leasing activity and occupancy
Shopping Centers | Leasing activity and occupancy Meaningful increase in occupancy (+184 bps vs 3M19) Release spread #contracts Tenants All portfolio +2.9% 153 Contracted Net Occupancy Change vs sqm Absorption 30/06/19 31/03/19 (bps) All portfolio 51,405 5,994 92.6% +184 ı 13 ı
Slide 14: Logistics
Logistics
Slide 15: Solid LfL growth driven by increase in rents
Logistics | Rents bridge and breakdown Solid LfL growth driven by increase in rents (€m) LfL(1) +6.2% 24.3 +1.3 +0.6 26.2 6M 2018 Like-for-Like growth Balance acquisitions, 6M 2019 disposals and other LfL growth by location Occupancy by area 1Q19 2Q19 Madrid +7.7% Madrid 93.6% 94.1% +50 bps Barcelon
Slide 16: Logistics | Leasing activity
Logistics | Leasing activity Rents continue growing in all markets (+5.0% release spread in the portfolio) Contracted sqm Release spread #contracts Tenants Madrid 59,424 +7.3% 5 Barcelona 5,583 +5.2% 5 Other 1,818 +0.7% 4 TOTAL 66,824 +5.0% 14 ı 16 ı
Slide 17: Logistics | ZAL Port
Logistics | ZAL Port Stock Investment 468,745 € 136m WIP ERV 257,981 € 22m Stock incl. WIP 726,726 Third parties stock 178,433 Stock under management 905,159 Contracted sqm Release spread #contracts Tenants 135,007 +3.1% 22 Occupancy by area 1Q19 98.2% +177 bps 2Q19 100% €m 6M19 6M18 YoY Gross rents
Slide 18: Valuation and debt position
Valuation and debt position
Slide 19: GAV summary
Valuation and debt position | GAV summary Gross asset value approaching € 12.4bn Passing 4.1% 5.3% 4.4% 5.9% - 4.5% Gross yield 12,375 12,173 6,096 GAV TOTAL with minority stakes (€ million) Shopping centers High Street Retail 2,292 2,229 Minority stakes Logistics Offices 847 TOTAL Other(1) 709 202
Slide 20: GAV bridge
Valuation and debt position | GAV bridge (€m) +2.8% 12,041.0 134.5 65.9 157.6 12,375.0 (24.1) (€ million) GAV Acquisitions Disposals Capex & WIP Revaluation(1) GAV Dec 2018 6M19 6M19 6M19 6M19 Jun 2019 Source: Company (1) Including off-balance sheet revaluations ı 20 ı
Slide 21: GAV drivers
Valuation and debt position | GAV drivers +4.1% AV G Like-for-Like evolution(1)(1) +1.9% 1.6% +1.2% MERLIN +0.4% average(1) Offices Shopping centers High street retail Logistics (45 bps) 17 bps ield Y (35 bps) compression / (expansion)(1) 4 bps (28 bps) 2 bps (24 bps) 2 bps MERLIN average (2) MERLIN
Slide 22: Maturity profile
Valuation and debt position | Maturity profile € 1,550m ESG indexed financing has extended maturities… 1,820 720 1,077 (€ million) 17 867 716 17 776 16 176 850 1,100 700 850 15 14 600 8 7 13 210 1 2 14 2019 2020 2021 2022 2023 2024 2025 2026-2031 Unsecured loans Unsecured bonds Secured bank loans RC
Slide 23: Debt position
Valuation and debt position | Debt position … and further reduced the cost of debt (€ million) 30/06/2019 31/12/2018 Gross financial debt 5,292 5,413 Cash(1) (216) (509) Net financial debt 5,076 4,904 (Metrics) LTV 41.0% 40.7% Average cost (spot) 2.04% (1.74%) 2.13% (1.84%) Fixed interest rate 95.4%
Slide 24: Value creation
Value creation
Slide 25: Acquisitions - Cabanillas Park I extension
Value creation | Acquisitions - Cabanillas Park I extension I J Cabanillas Park I A B C extension G H F D E Cabanillas Park I The project The market KPIs • Development of 4 logistics modules, • A-2 corridor is the main logistics hub GLA 92,994 sqm adjacent to Cabanillas Park I, with a in Spain, with
Slide 26: Landmark I: Torre Glòries and Torre Chamartin
Value creation | Landmark I Torre Glòries Torre Chamartin • Full occupancy of office space after having signed 5,118 sqm • 9,067 sqm signed in the year (+ 2,121 sqm optioned) to reach 83% in 2Q19 occupancy (94% if option executed). Deloitte will occupy 70% of • World class observatory development si
Slide 27: Flagship: Larios, X-Madrid, Tres Aguas
Value creation | Flagship Larios X-Madrid Tres Aguas • Compelling achievements in leasing-up the • Preleasing activity has reached 92% and main • Anchor tenants upsizing and upscaling refurbished additional space anchors secured units • Primark will open its largest shop in a mall • Opening in Octob
Slide 28: Best II & III
Value creation | Best II & III Largest logistics lease ever signed in Spain, with Carrefour, for the entire lease-up (98,757 sqm) The turn-key project, currently under construction, will be delivered by the beginning of 2021 Carrefour will cover national distribution of non-consumable goods from thi
Slide 29: Closing remarks
Closing remarks
Slide 30: Closing remarks
Closing remarks | • Significant growth in cash flow generation, to reach €0.33 of FFO per share Financial (+11.6% YoY) • Steady growth in EPRA NAV per share (€ 15.11, +7.5% YoY) performance • DPS guidance of € 0.52 per share reconfirmed • LTV maintained at 41% LTV, with lower cost (2.0%) and extende
Slide 31: Contact
Paseo de la Castellana, 257 28046 Madrid +34 91 769 19 00 info@merlinprop.com www.merlinproperties.com
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