Merlin Properties Socimi, S.a. · BME:MRL
Merlin Properties Socimi — IPO Roadshow (July 2015)
48 slides from Merlin Properties Socimi's IPO roadshow presentation, Jul 14, 2015
Slide 1: Roadshow presentation
Roadshow presentation July 2015 1
Slide 2: Disclaimer
Disclaimer The material in this presentation (the “Presentation”) has conduct your own independent investigation and analysis this Presentation is based on matters as they exist as of the Company and their authorized dealer agents, that the been prepared and is the sole responsibility of, Merlin of
Slide 3: Presenting team and index
Presenting INDEX team 1. T esta: a unique real estate platform A. Overview of Testa B. Acquisition rationale C. Acquisition terms ISMAEL CLEMENTE Executive Chairman / CEO 2. C reating the largest Spanish property company DAVID BRUSH CIO MIGUEL OLLERO CFO / COO 3
Slide 4: MERLIN rights issue
MERLIN rights issue Capital increase with preferential subscription rights for MERLIN’s existing shareholders Offer structure Public offering in Spain Private placement to institutional investors including U.S. QIBS (144A) and outside the U.S. (RegS) €1,034m Offer size Proposed placing of 129,212,00
Slide 5: Key dates timeline
Key dates Timeline Capital Preferential Additional increase Admission subscription subscription record to listing period period date July July 20 August 16 to 30 to July 31 6 to 7 August 11 July 17 July 18 to August 6 August 10 August 1 Rights Discretionary New shares Roadshow trading allocation sta
Slide 6: Section 1. Testa: a unique real estate platform
Section 1. Testa: a unique real estate platform A. Overview of Testa 6
Slide 7: Testa at a glance
Testa at a glance Portfolio key highlights Key metrics by asset class GAV1 (€m) GRI2 (€m)/ • Monthly GRI2 (€/sqm/m) €3.2bn GAV1 1,710 349 388 114 275 93 22 22 8 11 24.5 • 1,043,901sqm • 17 16.2 • 3.4 7.4 GLA Office Shopping Hotels Logistics Rented Office Shopping Hotels • Logistics • Rented Centres
Slide 8: Office portfolio key highlights
Office portfolio key highlights Direct exposure to prime office rents recovery Key figures 36 assets €93.3m GRI1 475k sqm GLA 5.2 years WAULT (3.7 pro-forma2) Geographical breakdown by GLA Change in prime office rents3 20% Other 5 % 0% Barcelona 20 % Madrid 75% (20)% Trough to Current Peak to Trough
Slide 9: Office portfolio: top-tier, diversified tenant base
Office portfolio key highlights Top-tier, diversified tenant base 9
Slide 10: Office portfolio: performance affected by real estate crisis
Office portfolio key highlights Portfolio performance affected by real estate crisis 36% upside potential trough to peak 25,0 23.1 22.0 22.6 GRI historical 1 22,5 21.5 21.2 21.5 21.2 20.4 evolution 20,0 18.0 (€/sqm/month) 17.0 17.0 17,5 17,5 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 15 7%
Slide 11: Shopping centres portfolio key highlights
Shopping centres portfolio key highlights Key figures 4 assets 72k sqm GLA €21.7m GRI1 2.2 years WAULT Urban, affluent catchment areas Centre Location Opening year Annual footfall Occupancy (MM) Plaza de los Cubos Madrid 1972 N/A 100.0% Porto Pi Mallorca 1994 7.6 95.2% Centro Oeste Madrid 1996 6.7 1
Slide 12: Logistics portfolio key highlights
Logistics portfolio key highlights Key figures 7 assets 210k sqm GLA €8.1m GRI1 1.6 years WAULT Best-in-class locations Premium location with easy access to major highways with special focus in A2 corridor in Madrid Significant upside on rents 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Q1 15
Slide 13: B. Acquisition rationale
Section 1. Testa: a unique real estate platform B. Acquisition rationale 13
Slide 14: Transformational acquisition in scale, footprint and diversification
Transformational acquisition positioning MERLIN as the leading player to benefit from the attractive Spanish real estate market Transformational acquisition in terms of scale, footprint and portfolio diversification Creating a leader in office and logistics and a reference player in retail Unique op
Slide 15: An ideal fit with MERLIN's investment mandate
An ideal fit with MERLIN’s investment mandate MERLIN’s strategic pillars Testa’s fit with 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 close pr
Slide 16: C. Acquisition terms
Section 1. Testa: a unique real estate platform C. Acquisition terms 16
Slide 17: Acquisition terms
Acquisition terms Phase 1 Phase 2 Phase 3 Stake acquired1 25% 25.1% 49.5% €431 million €861 million €694 million Capital increase at Acquisition of Acquisition of Consideration Testa fully subscribed secondary shares secondary shares by Merlin from Sacyr from Sacyr Not before 30 September 2015 Timin
Slide 18: Transaction price breakdown
Transaction price breakdown Bridge to implied equity value and premium to NAV €1,986m €1,994m €1,555m2 €186m3 €186m3 €1,721m €186m3 Premium €1,800m4 €1,800m €1,535m to Mar-15 EPRA NAV: 15.9 €431m1 %4 Capital Direct acquisition Total purchase Implied 100% Testa EPRA NAV increase of a 74.6% stake pric
Slide 19: Acquisition done at attractive capital values
Valuation 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 4,000-7,350 Market €/Room: €178 – 369k 5,000 - 5,357 641 - 1,000 2,178 – 3,560 Market Transactions 2014-15 YTD €/sqm Range2 4,088 2
Slide 20: Transaction financing: sources and uses
Transaction financing Purchase price fully funded Transaction fully-funded: 1 Cash of €871 million Uses1 Sources available at MERLIN following the May 694 8 644 Rights Issue •€ 644 million used to fund the transaction 1 •€ 227 million of remaining cash at 861 350 MERLIN to fund general operations 2
Slide 21: Section 2. Creating the largest Spanish property company
Section 2. Creating the largest Spanish property company 21
Slide 22: Combined portfolio KPIs
Combined portfolio KPIs MERLIN9 Testa10 New MERLIN GAV1 (€m) 2,331.0 3,202.4 5,533.8 Total GLA (sqm) 2 758,851 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 yield
Slide 23: Transaction creates the leading Spanish real estate player
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 3.2 158 1353 160 4.5 2.33 30 26 0.5 0.5 0.5 60 23 1.3 New Comp Comp Comp Comp New Comp Comp Comp Comp Merlin 1 2 3 4 Merlin
Slide 24: Creating a leading company in offices and logistics
Creating a leading company in offices and logistics in Spain… Offices1 Logistics1 (€m) (€m) 222 Largest 1,984 410 MERLIN prime office 17 becomes the player in 112 554 third largest Spain4 Spanish platform by 114 8 210 Stronger GLA4 presence in Largest player those areas 1,710 93 475 in the A-2 that
Slide 25: 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) 373 1,670 630 178 89 Becomes a 40 reference for key tenants with five 349 22 72 strategically located, dominant and urban retail assets recovery 281 19 106 GAV1 GRI2 GLA GAV1 GRI2 GLA
Slide 26: New MERLIN: portfolio breakdown by asset class (I)
New MERLIN: Portfolio breakdown by asset class (I) Other2 7% Office 36% Rented residential 5 % Total GAV1 Hotels 7% €5,534m Logistics 4 % Shopping centres 11 % High street retail 30% Rented residential 4% Other2 1% Hotels 7% Total GRI1 6% Logistics Office 38% €293m Shopping centres 14 % High street
Slide 27: 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% 5.6 % 5.3 % 6.4% 5.6% 5.6% 4.0 % 4.6 % Average gross yield Office High street retail Shopping centres Logistics Hotels Rented residential Other2 5.7% Average gross
Slide 28: 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 ased on pro-forma accounts as of 31 March 2015 (and therefore excluding Meco and Lisbon-Expo acquisitions) including the following adjustments:
Slide 29: Investment pipeline under execution/exclusivity/due diligence
Investment pipeline under execution/exclusivity/due diligence Office 9% Estimated size: c.€370million To be funded within 12 months: €256million €25million already disbursed Retail 37% Logistics 54% Source: Company 29
Slide 30: Appendix
Appendix 30
Slide 31: Testa non-core assets: rented residential
Testa non-core assets key highlights Rented residential Key figures 1,519 units 124k sqm GLA €11.1m GRI1 2.5 years WAULT Enhanced liquidity given exposure to prime markets and favourable market conditions Geographical breakdown by GLA Attractiveness of portolio Toledo 8% Increased investor interest
Slide 32: Testa non-core assets: hotels
Testa non-core assets key highlights Hotels Key figures 11 assets 111k sqm GLA €21.9m GRI1 7.0 years WAULT2 Strategically located urban hotels Geographical breakdown by GLA Attractiveness of portolio Other Spain 19% Barcelona as best-performing hotel market in Spain Madrid urban hotel market expecte
Slide 33: Portfolio Offices Madrid
Juan Espla- Juan Espla- ndiú 11-13 ndiú 11-13 Alcalá 45 Alcalá 45 Juan de Juan de Portfolio Offices Madrid Mariana 17 Mariana 17 Portfolio © MERLINOffices Madrid Properties SOCIMI, MERLIN PropertiesLocation ©S.A SOCIMI, S.A Merlin Testa Merlin Testa 1 1 14 Alcobendas / La Moraleja 4 12 Costa Brava 2
Slide 34: Portfolio Offices Barcelona
Juan Espla- Juan Espla- ndiú 11-13 ndiú 11-13 Alcalá 45 Alcalá 45 Portfolio Offices Barcelona Juan de Juan de Mariana 17 Mariana 17 Portfolio © MERLINOffices Barcelona Properties SOCIMI,©S.A Location MERLIN Properties SOCIMI, S.A Merlin Testa Merlin Testa 1 1 Sant Cugat 15 23 Edificio Sant Cugat I a
Slide 35: Offices (I)
Offices (I) Testa MERLIN 1. Endesa HQ – Ribera del Loira 60 2. Avenida del Partenón 16-18 City: Madrid City: Madrid Location: Business District Location: Business District GLA: 54,960 GLA: 37,632 Parking Lots: 1,253 Parking Lots: 663 3. Madrid A-1 4. Indra HQ – Avenida de Bruselas 33 City: Madrid Ci
Slide 36: Offices (II)
Offices (II) Testa MERLIN 7. Princesa 3, 5 8. Atica City: Madrid City: Madrid Location: CBD Location: Business District GLA: 23,598 GLA: 23,406 Parking Lots: 15 Parking Lots: 502 9. PwC Tower – Paseo de la Castellana 259 10. Josefa Valcárcel 48 City: Madrid City: Madrid Location: CBD Location: Busin
Slide 37: Offices (III)
Offices (III) Testa MERLIN 13. Avenida Vilanova 12-14 14. Costa Brava 2-4 City: Barcelona City: Madrid Location: CBD Location: Business District GLA: 16,494 GLA: 16,000 Parking Lots: 94 Parking Lots: 335 15. Edificio San Cugat I and II 16. Paseo de la Castellana 83-85 City: Barcelona City: Madrid Lo
Slide 38: Offices (IV)
Offices (IV) Testa MERLIN 19. World Trade Center Almeda Park 8 20. World Trade Center Almeda Park 6 City: Barcelona City: Barcelona Location: Business District Location: Business District GLA: 14,543 GLA: 14,535 Parking Lots: 247 Parking Lots: 213 21. Príncipe de Vergara 187 22. Ventura Rodríguez 7
Slide 39: Offices (V)
Offices (V) Testa MERLIN 25. Lisbon - Expo 26. Pedro de Valdivia 10 City: Lisbon City: Madrid Location: CBD Location: CBD GLA: 6,740 GLA: 6,721 Parking Lots: 176 Parking Lots: 89 27. Edificio Muntadas II 28. Juan de Mariana 17 City: Barcelona City: Madrid Location: Business District Location: Busine
Slide 40: Portfolio Shopping Centres
Juan Espla- Juan Espla- ndiú 11-13 ndiú 11-13 Alcalá 45 Alcalá 45 Juan de Juan de Portfolio Shopping Centres Mariana 17 Mariana 17 Portfolio © MERLINShopping Properties SOCIMI,Centres ©S.A Location MERLIN Properties SOCIMI, S.A Merlin Testa Merlin Testa 1 1 La Coruña Madrid 5 Centro Oeste 1 4 Plaza
Slide 41: Shopping Centres
Shopping Centres Testa MERLIN 1. Marineda 2. Porto Pi City: A Coruña City: Mallorca Units: 150 Units: 124 GLA: 106,276 GLA: 26,559 Annual Footfall: 15.1 m Annual Footfall: 7.6 m Physical Occupancy: 89% Physical Occupancy: 95.2% 3. Larios 4. Plaza de los Cubos City: Málaga City: Madrid Units: 99 Unit
Slide 42: Portfolio Logistics
Juan Espla- Juan Espla- ndiú 11-13 ndiú 11-13 Alcalá 45 Alcalá 45 Juan de Juan de Portfolio Logistics Mariana 17 Mariana 17 Portfolio © MERLINLogistics MERLINLocation Properties SOCIMI,©S.A Properties SOCIMI, S.A Merlin Testa Merlin Testa 1 1 10 1 Vitoria - Júndiz Zaragoza - Plaza (Vitoria) (Zaragoz
Slide 43: Logistics (I)
Logistics (I) Testa MERLIN 1. Vitoria - Júndiz 2. Cabanillas City: Vitoria City: Guadalajara GLA: 72,717 GLA: 70,134 Location: Crossroads of A68/ Location: A-2 Corridor A1/N1 and N240 3. Alovera 4. Coslada I-III City: Guadalajara City: Madrid GLA: 38,763 GLA: 36,234 Location: A-2 Corridor Location:
Slide 44: Logistics (II)
Logistics (II) Testa MERLIN 7. Azuqueca 8. Valencia - Almussafes City: Guadalajara City: Valencia GLA: 27,995 GLA: 26,613 Location: A2-Corridor Location: Access to AP7, A7 and V31 9. Pedrola 10. Zaragoza - Plaza City: Zaragoza City: Zaragoza GLA: 21,579 GLA: 20,764 Location: A-2 Corridor Location: A
Slide 45: Portfolio Hotels
Juan Espla- Juan Espla- ndiú 11-13 ndiú 11-13 Alcalá 45 Alcalá 45 Portfolio Hotels Juan de Juan de Mariana 17 Mariana 17 Portfolio © MERLINHotels MERLINLocation Properties SOCIMI,©S.A Properties SOCIMI, S.A Merlin Testa Merlin Testa 1 1 Madrid Barcelona 9 6 7 NH Sanvy Eurostars 1 AV Vega 4* AC Forum
Slide 46: Hotels (I)
Hotels (I) Testa MERLIN 1. Eurostars GL 5* 2. Eurostars Gran Marina 5* City: Madrid City: Barcelona Location: CBD / Urban Location: Urban GLA: 31,800 GLA: 20,030 # rooms: 474 # rooms: 274 3. Puerta Castilla 4* 4. Tryp Aeropuerto 4* City: Madrid City: Barcelona Location: CBD / Urban Location: Airport
Slide 47: Hotels (II)
Hotels (II) Testa MERLIN 7. NH Sanvy 4* 8. Tryp Alameda 4* City: Madrid City: Malaga Location: CBD / Urban Location: Coast GLA: 12,182 GLA: 6,000 # rooms: 149 # rooms: 136 9. Eurostars Av Vega 4* 10. Tryp Jerez 4* City: Madrid City: Jerez Location: Urban Location: Coast GLA: 3,581 GLA: 4,637 # rooms
Slide 48: Contact
PASEO DE LA CASTELLANA, 42 28046 MADRID +34 91 787 55 30 info@merlinprop.com www.merlinproperties.com 48