Merlin Properties Socimi, S.a. · BME:MRL
Merlin Properties Socimi — 6M 2017 Earnings Presentation
33 slides from Merlin Properties Socimi's earnings presentation, Sep 22, 2017
Slide 1: 6M 2017 Results Presentation
6M 2017 RESULTS PRESENTATION 22 SEPTEMBER 2017
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 6M 17 Financial Results ISMAEL CLEMENTE Office performance CEO Shopping centers performance Logistics performance MIGUEL OLLERO Valuation and debt position GM / COO Value creation Closing remarks DAVID BRUSH CIO
Slide 4: Key highlights
Key highlights | • +5.7% FFO per share YoY Financial • +12.2% EPRA NAV YoY performance • Highest FFO yield in the market • Significant growth prospects in valuation • Capital structure: longer and more balanced maturity • Excellent performance in office, shopping centers and logistics, with positive
Slide 5: 6M 17 Financial Results
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Slide 6: +5.7% increase in FFO per share and +37.2% in IFRS EPS
6M 17 Financial Results | Profit and loss +5.7% INCREASE IN FFO PER SHARE AND +37.2% IN IFRS EPS €m 6M17 6M16 YoY Total revenues 242.6 158.0 53.5% Office 108.5 57.4 89.0% High street retail 52.1 48.0 8.4% Shopping centers 47.3 20.4 131.6% Logistics 19.5 9.8 98.3% Other(1) 7.7 18.9 n.a. Gross rents 23
Slide 7: Bridge gross rents
6M 17 Financial Results | Bridge gross rents OFFICE AND SHOPPING CENTERS SHOWING ROBUST UPWARDS TREND AND LOGISTICS ACCELERATED GROWTH Primarily (€m) Metrovacesa Office +2.7% and Adequa LfL(1) Shopping centers +3.0% Logistics +6.9% +78.7 235.1 +2.6% H. Street retail +0.9% Other +11.2% 154.6 +3.3 (1.
Slide 8: Office performance
OFFICE /_PERFORMANCE |
Slide 9: Office performance | Rents bridge and breakdown
Office performance | Rents bridge and breakdown Primarily MVC office (€m) and Adequa LfL(2) +2.7% +50.4 108.5 57.8(1) +1.3 (1.0) 6M 2016 Like-for-Like growth 2 old leases 6M16(3) Balance acquisitions 6M 2017 and disposals Gross rents 6M 17 Breakdown by location Passing rent (€/sqm/m) 1.5 4.4 14.4 4.
Slide 10: Office performance | Leasing activity
Office performance | Leasing activity GOOD PERFORMANCE IN OUR 3 CORE MARKETS, WITH +3.4% RELEASE SPREAD Contracted Release # Main sqm spread contracts actions Madrid 200,894 +3.1% 72 Barcelona 34,152 +6.3% 26 Lisbon 1,043 +7.9%. 1 TOTAL 236,089 +3.4% 99 Most meaningful sample in Spain ı 10 ı
Slide 11: Occupancy rising in Madrid and Barcelona
Office performance | Occupancy OCCUPANCY RISING IN MADRID AND BARCELONA Net Occupancy Change Main Absorption 30/06/17 vs 31/12/16 (bps) actions Madrid +12,806 88.9% +105 Barcelona +4,191 88.8% +312 Lisbon (467) 92.7%. (154) Change of perimeter (Central Lisbon acquisition) TOTAL +16,529 89.3% +132 91
Slide 12: Shopping Centers Performance
SHOPPING CENTERS PERFORMANCE
Slide 13: A dominant and urban portfolio showing strength
Shopping Center performance | Rents bridge and breakdown A DOMINANT AND URBAN PORTFOLIO SHOWING STRENGTH (€m) LfL(2) +27.7 Primarily MVC 47.3 Shopping +3.0% centers 19.0(1) +0.6 6M 2016 Like-for-Like growth Balance acquisitions 6M 2017 and disposals Gross rents 6M 17 Breakdown by type 12.1 21% 8.5 B
Slide 14: Meaningful release spread (+5.5%)
Shopping Center performance | Leasing activity and occupancy MEANINGFUL RELEASE SPREAD (+5.5%) Release spread #contracts Main actions All portfolio +5.5% 84 Contracted Net Occupancy Change vs Main sqm Absorption 30/06/17 31/12/16 (bps) actions All portfolio 71,587 +2,974 89.3% +68 In spite of Shana
Slide 15: Over 100M visitors to our portfolio
Shopping centers | Footfall and sales evolution OVER 100M VISITORS TO OUR PORTFOLIO Visitors(1) Sales(1) +2.7% +3.9% 91.4 787.6 89.0 758.1 Previous LTM LTM Previous LTM LTM (1) Excluding assets impacted by the “opening effect” of a new shopping center in the previous 24 months (Porto Pi) ı 15 ı
Slide 16: Logistics Performance
LOGISTICS PERFORMANCE
Slide 17: Logistics performance | Rents bridge and breakdown
Logistics performance | Rents bridge and breakdown Primarily WIP (€m) +9.8 19.5 LfL(1) program +6.9% 9.8 +0.5 (0.5) 6M 2016 Like-for-Like growth 2 old leases 6M16(2) Balance acquisitions 6M 2017 and disposals Gross rents 6M 17 Breakdown by location Passing rent (€/sqm/m) 5.4 4.9 25.1% 3.6 3.5 5.0 An
Slide 18: Strong market dynamics driving a very positive release spread
Logistics performance | Leasing activity STRONG MARKET DINAMICS DRIVING A VERY POSITIVE RELEASE SPREAD Release spread #contracts Main actions Madrid +16.3% 6 Barcelona - - Other - - TOTAL +16.3% 6 ı 18 ı
Slide 19: Portfolio is virtually fully occupied
Logistics performance | Occupancy STRONG LEASING PERFORMANCE: THE PORTFOLIO IS VIRTUALLY FULLY OCCUPIED Contracted Net Occupancy Change vs Main sqm Absorption 30/06/17 31/12/16 (bps) actions Madrid 130,952 +49,793 100.0% - Barcelona 31,102 +26,730 99.1% +1,253 Other 21,066 (2,585) 95.8% (103) TOTAL
Slide 20: Valuation and Debt Position
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Slide 21: Valuation and debt position | GAV summary
Valuation and debt position | GAV summary LfL growth 4.7% 5.1% 6.0% 0.2% - - -1.5% 3.7% 3.6% 3.7% Gross yield 4.6% 5.4% 7.0% 4.7% - - - 4.9% 10,459 10,113 4,772 Land for development (incl WIP)(1) GAV (€ million) 2,208 1,694 Shopping centers High Street Retail Equity method Non-core land 590 422 346
Slide 22: Ample room for future growth
Valuation and debt position | GAV prospects AMPLE ROOM FOR FUTURE GROWTH LfL growth 6M 17 Yield compression 6M 17 Office 4.7% (11 bps) Shopping centers 5.1% (27 bps) Logistics 6.0% (18 bps) High Street retail 0.2% (0 bps) MERLIN 3.7% (11 bps) Lowest yield compression among Spanish peers Yields on GA
Slide 23: Long-term, balanced maturity profile
Valuation and debt position | Debt position LONG-TERM, BALANCED MATURITY PROFILE Unsecured loans 81 41 Unsecured bonds 10 Secured bank loans 19 158 Leasing 840 850 839 800 700 600 124 5 15 10 84 2 5 5 27 2 2017 2018 2019 2020 2021 2022 2023 2024 2025 +2026 30/06/17 31/12/16 Gross financial debt € 5,
Slide 24: Value Creation
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Slide 25: Value creation | Delivered: Balmes
Value creation | Delivered BALMES 236 THE PLAN Occupancy 6,187 sqm • Transformation of a 59% GLA multi-tenant C asset in an excellent location into a B+ mono-tenant HQ 100% 100% Occupancy (€/sqm/m) ACTIONS • Commercialization by 12.4 € 8m Capex internal leasing team +29% mostly borne • Technical sup
Slide 26: Value creation | Delivered: Marineda Sports Area
Value creation | Delivered MARINEDA SPORTS AREA THE PLAN 91% 3,402 sqm GLA • Transformation of an Occupancy unborn luxury brands area, with high vacancy, into a sports related area Succesful retenanting € 2.5m Total Cost ACTIONS 1st store in a shopping center in Spain • Redesign to improve € 0.45m v
Slide 27: Value creation | Delivered: Merlin-Cabanillas Park I
Value creation | Delivered MERLIN-CABANILLAS PARK I THE PLAN 202,607 sqm • Development of a large GLA logistics park in the main hub in Spain, with the highest specifications to meet the needs of 100% Largest Park built 3PLs and e-commerce Occupancy companies since 2007 € 7.8m ACTIONS • Forward purc
Slide 28: Excellent value creation (+31% uplift)
Value creation | EXCELLENT VALUE CREATION (+31% UPLIFT) December 2015 December 2016 April 2017 September 2017 Testa portfolio Testa + Metrovacesa Testa + Metrovacesa Testa + Metrovacesa + portfolio + banks portfolio banks + Acciona portfolio NAV 177 618 1,377 1,816 MRL stake 100% 34.2% 16.2% 12.7% M
Slide 29: Future growth drivers
Value creation | Future growth drivers Delivery Pending Expected Year Capex Rent Torre Glòries 2018 Development Torre Chamartin 2018 € 97m € 24m Adequa 2021 Offices 2017-2020 Refurbishment € 174m € 12m Shopping centers 2017-2020 Meco II 2017 Pinto I 2017 Pinto II 2017 Gavilanes 2018 Logistics WIP Se
Slide 30: Potential rental growth
Cash flow | Potential rental growth (€m) +22% 12.0 568.7 48.3 41.1 467.3 30/06/17 Reversionary(1) WIP Refurbishment Potential Annual potential & Development(2) Annual Gross rents Gross rents Not considering any rental market growth nor inflation (1) Includes Torre Glòries, Torre Chamartín, Adequa an
Slide 31: Closing Remarks
CLOSING REMARKS
Slide 32: Outlook 2017
Outlook 2017 | • MERLIN very well positioned to capture strong upwards market dynamics • Strong reversion through rents, occupancy, developments and refurbishments program (€ 467m of annual rents to reach € 569m) • AFFO per share and DPS guidance upgraded: € 0.58 (vs € 0.55) and € 0.46 (vs € 0.44),
Slide 33: Contact
Paseo de la Castellana, 257 28046 Madrid +34 91 769 19 00 info@merlinprop.com www.merlinproperties.com
MERLIN Properties SOCIMI — 6M 2017 Earnings Presentation on 6ix