«Occupancy has held down the effects of Covid-19 and is set nearly at pre-Covid levels, reaching 94.1%, showing the tenants’ quality and strength», revealed the REIT during the announcement of its third quarter’s results.
It should be noted that the office segment «behaved well during the third quarter with a 3% increase in like-for-like rents». In total, contracts were signed corresponding to 197.975 sqm and renewed contracts were signed for higher numbers than last year, reaching a 4.0% release spread for the quarter. Office occupancy was set at 91.,1%, in line with the rates reached before Covid (91.4% in March).
In terms of retail, Merlin Properties launched a commercial policy in March (for retail spaces which were forced to close) and in June, rent discounts trying to help its clients maintain their businesses within sustainable effort rates. As a trade-off, the tenants extended the end of their contracts until 2022, protecting the portfolio’s occupancy during 2020 and 2021. In September, occupancy reached 93.7%, maintaining pre-Covid levels.
The logistic segment, as was expected, showed «excellent numbers», generated by the «growth of e-commerce and the absolute leading position Merlin holds within the Iberian logistic market, with a solid growth in rents, both like-for-like (+2,9%) and renewed rents (+8,5%)». With this rise, occupancy increased 67% when compared to the previous quarter and reached 97.4%.
After the first 9 months of 2020, Merlin Properties reached a revenue of 385 million euro, of which 380.9 million euro correspond to rents. The company also reached a 275.7 million euro EBITDA and a 197.3 million euro operating profit (FFO). The consolidated net profit in compliance with the IFRS (International Financing Reporting Standards) reached 111.8 million euro and is not comparable to the previous exercise due to atypical factors (assets sold and a lower portfolio revaluation when compared to last year). The assets’ net value reached 7.410 million euro (15.77 euro per share), which represents a 3.3% increase y-o-y.
Despite the restrictions implemented both in Portugal and Spain, Merlin Properties benefitted of liquidity of almost 1.200 million euro and guaranteed a «very solid» balance sheet. Only 9% of contracts end in 2021 when the company will receive a further 20 million euro in additional rents from already signed new leases which will become active then.
For 2021, Merlin conceived a commercial plan «which will have a smaller impact on the results than it did in 2020 and will continue, regardless, maintaining effort rates at reasonable and sustainable levels».