Merlin Properties Socimi, S.a. · BME:MRL
Merlin Properties Socimi — Shareholder Meeting (July 2015)
25 slides from Merlin Properties Socimi's shareholder meeting presentation, Jul 14, 2015
Slide 1: Extraordinary General Shareholders Meeting 2015
EXTRAORDINARY GENERAL SHAREHOLDERS MEETING 2015 Madrid, 14 July 2015
Slide 2: Extraordinary general shareholders meeting
Extraordinary general shareholders meeting 14 July 2015 © MERLIN Properties SOCIMI, S.A
Slide 3: Agenda
Agenda 1 Testa: a unique real estate platform A Overview of Testa B Acquisition rationale C Acquisition terms 2 Creating the largest Spanish property company © MERLIN Properties SOCIMI, S.A
Slide 4: Testa: a unique real estate platform - Overview of Testa
Section 1 Testa: a unique real estate platform A Overview of Testa
Slide 5: Testa at a glance
Testa at a glance Portfolio key highlights Key metrics by asset class • €3.2bn 1,710 50.0 45.0 GAV1 40.0 93 24.5 35.0 30.0 25.0 16.2 20.0 • 1,043,901sqm GLA 349 388 15.0 114 275 17.0 22 22 8 3.4 11 7.4 10.0 5.0 0.0 Office Shopping Hotels Logistics Rented Office Shopping Hotels Logistics Rented Centr
Slide 6: Office portfolio key highlights (I)
Office portfolio key highlights (I) Office: 36 assets / 475k sqm GLA / €93.3m GRI1 / 5.2 years WAULT (3.7 years2) Geographical breakdown Geographical breakdown by GLA by GLA Change inprime Change in prime office office rents rents 20% Trough to Current Other Direct exposure to 5% Peak to Trough 0% p
Slide 7: Office portfolio key highlights (II)
Office portfolio key highlights (II) GRI1 historical evolution (€/sqm/month) 25.0 23.1 36% upside potential trough to peak 22.6 22.0 22.5 21.5 21.2 21.5 21.2 20.4 20.0 18.0 17.0 17.0 17.5 Portfolio 15.0 performance 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 15 affected by real estate crisi
Slide 8: Shopping centres and logistics portfolio key highlights
Shopping centres and logistics portfolio key highlights Shopping Centres: 4 assets / 72k sqm GLA / €21.7m GRI1 / 2.2 years WAULT Centre Location Opening year High income areas Annual footfall (MM) Physical Occupancy Plaza de los Cubos Madrid 1972 N/A 100.0% Urban, affluent catchment Porto Pi Mallorc
Slide 9: Testa: a unique real estate platform - Acquisition rationale
Section 1 Testa: a unique real estate platform B Acquisition rationale
Slide 10: Transformational acquisition positioning MERLIN as the leading player
Transformational acquisition positioning MERLIN as the leading player to benefit from the attractive Spanish real estate market 1 Transformational acquisition in terms of scale, footprint and portfolio diversification 2 Creating a leader in office and logistics and a reference player in retail 3 Uni
Slide 11: An ideal fit with MERLIN's investment mandate
An ideal fit with MERLIN’s investment mandate Testa’s fit with MERLIN’s strategic pillars MERLIN Commercial assets in the Core / Core+ segments Prime office properties located in Madrid and Barcelona Dominant and urban shopping centres with good catchment area Logistic properties located in cl
Slide 12: Testa: a unique real estate platform - Acquisition terms
Section 1 Testa: a unique real estate platform C Acquisition terms
Slide 13: Acquisition terms
Acquisition terms Phase 1 Phase 2 Phase 3 Stake 25% 25.1% 49.5% acquired1 €431 million €861 million €694 million Consideration Capital increase at Acquisition of Acquisition of Testa fully subscribed secondary shares secondary shares by Merlin from Sacyr from Sacyr Not before 30 September 2015 Timin
Slide 14: Transaction price breakdown
Transaction price breakdown Bridge to implied equity value and premium to NAV €1,555m² €1,986m €1,994m €186m³ €186m³ €1,721m €186m³ Premium €1,800m4 €1,808m to Mar-15 €431m¹ €1,535m EPRA NAV: 15.9%4 Capital increase Direct acquisition Total purchase price Implied 100% Testa EPRA NAV at Testa for a o
Slide 15: Acquisition done at attractive capital values
Acquisition done at attractive capital values Acquisition implied capital values by asset class1 vs. recent market transactions # of deals 17 7 2 8 6 Selected Market Transactions 4,000-7,350 Market €/Room: €178 – 369k 5,000 - 5,357 641 - 1,000 2,178 – 3,560 2014-15 YTD €/sqm Range2 5,738 4,088 €225k
Slide 16: Purchase price fully-funded
Purchase price fully-funded Uses1 Sources Transaction fully-funded: 8 1• Cash of €871 million available at MERLIN following the May Rights Issue 694 1 644 ̶ €664 million used to fund the transaction ̶ €227 million of remaining cash at 350 MERLIN to fund general 2 operations 861 150 2• Syndicated bri
Slide 17: Creating the largest Spanish property company
Section 2 Creating the largest Spanish property company
Slide 18: Combined portfolio KPIs
Combined portfolio KPIs MERLIN9 Testa10 New MERLIN GAV1 (€m) 2,331.0 3,202.4 5,533.8 Total GLA2 (sqm) 758,851 1,043,901 1,802,753 Total annualized gross rents3 (€m) 135.4 157.9 293.4 Total annualized net operating income4 (€m) 131.4 146.7 278.2 EPRA gross yield5 (%) 5.81% 5.49% 5.63% EPRA net yield6
Slide 19: Transaction creates the leading Spanish real estate player by far
Transaction creates the leading Spanish real estate player by far GRI1: Spanish players benchmarking GAV2: Spanish players benchmarking (€m) (€bn) 5.8 293 5.5 Spain France 220 4.5 3.2 158 3 135 3 160 2.3 30 26 1.3 0.5 0.5 0.5 60 23 New New MERLIN Comp 1 Comp 2 Comp 3 Comp 4 MERLIN Comp 1 Comp 2 Comp
Slide 20: Creating a leading company in offices and logistics in Spain
Creating a leading company in offices and logistics in Spain… Offices1 Logistics1 (€m) (€m) • Largest • MERLIN prime office 222 becomes the 1,984 410 player in 17 third largest 112 554 Spain4 Spanish • Stronger platform by presence in GLA4 those areas 114 • Largest that will 210 player in the 8 expe
Slide 21: Critical mass in shopping centres and high street retail
…with critical mass in shopping centres and high street retail Shopping centres High street retail - Tree (€m) (€m) • Becomes a 373 reference 1,670 630 178 89 for key tenants 40 with six strategically located, 72 dominant 349 and urban 22 retail assets 106 281 19 GAV 1 GRI 2 GLA ('000 sqm) GAV 1 GRI
Slide 22: New MERLIN: Portfolio breakdown by asset class (I)
New MERLIN: Portfolio breakdown by asset class (I) GAV1 GRI2 Rented Rented Other 2 Other 2 residential 7% Hotels residential 1% 7% 4% 5% Hotels Logistics 7% 6% Office Office Logistics 36% 38% 4% Shopping Shopping centres centres 14% 11% High street retail High street retail 30% 30% Total GAV = €5,53
Slide 23: New MERLIN: Portfolio breakdown by asset class (II)
New MERLIN: Portfolio breakdown by asset class (II) EPRA gross yields1 (based on appraisal, i.e. excluding premium paid for Testa) 7.8% 6.4% 5.6% 5.6% 5.6% 5.3% 4.6% Average 4.0% gross yield 5.7% Average gross Office High Shopping Logistics Hotels Rented Other 2 yield excl. street retail centres res
Slide 24: Pro-forma capital structure
Pro-forma capital structure New MERLIN1 GAV (€m) 5,494 Gross debt (€m) 3,202 Cash (€m) (401) Net debt (€m) 2,803 Average cost of debt (%) 2.9%2 LTV3 (%) 51.0% 1 Based on pro-forma accounts as of 31 March 2015 (and therefore excluding Meco and Lisbon-Expo acquisitions) including the following adjustm
Slide 25: Extraordinary General Shareholders Meeting 2015
EXTRAORDINARY GENERAL SHAREHOLDERS MEETING 2015 Madrid, 14 July 2015
MERLIN Properties SOCIMI — Shareholder Meeting (July 2015) on 6ix