Brookfield considers taking over Merlin Properties

Brookfield considers taking over Merlin Properties

Ismael Clemente, CEO for Merlin Properties

To achieve it, Brookfield has already contacted some of Merlin Properties’ shareholders. It should be noted that Santander has a 22.268% share of Merlin Properties, Manuel Lao has 6.271%, BlackRock 3.996% and Invesco 1.013%. According to data compiled by the Comisión Nacional del Mercado de Valores and Bloomberg, the majority of Merlin Properties’ capital (66.452%) is owned by other shareholders.

This interest on the REIT is not new, since, according to newspaper Expansión, the same fund had already revealed its attraction for it before the pandemic. But the strong drop of the company’s shares generated by the crisis will have increased the fund’s interest even further and accelerated the process. Since 2019, the REIT’s capitalisation was reduced to less than half, being set at 3.3262 million euro (data from the 3rd of August).

Tuesday morning Merlin Properties’ shares were valuing 11.66% at the Madrid Stock Exchange compared to the previous day, being set at 7.75 euro. Jornal de Negócios also reported that, after the news was announced, the company’s shares in the Portuguese Stock Exchange increased 3.5% to 7.10.

Despite the high fluctuations on the Stock Exchange, the 30% drop in its net profit during the first semester and the 2.2% drop in its rental revenues, Merlin Properties considers it is ready to face the crisis and assumes it has «very solid» financial health in the mid to long-term. Its portfolio, estimated at 12.755 million euro – 0.2% higher than last year – provides it the confidence to move forward, since 51% of its assets are offices and 31% logistic units, two of the segments to better resist the crisis. Only 18% of its portfolio belongs to retail, one of the segments most affected by the pandemic.

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