Merlin closed 2023 with revenues of €488M

Merlin closed 2023 with revenues of €488M

MERLIN Properties closed FY2023 with total revenues of 488.3 million euros (including gross rents of €475.6 million), EBITDA of €367.0 million and operating profit of €284.2 million (61 cents per share).

Gross asset value stood at 11,270 million, affected by a significant expansion of yields (+42 bps) with a moderate impact on valuations (-3.4% LfL vs. 2022) thanks to an operating performance, based on rental growth and higher occupancy rate, plus the increase in value of new logistics projects and data centres. The net asset value amounted to 7,083 million, down 3.8% vs. 2022.

The net accounting result is negative (-83.5 million), as the fall in asset valuation (336 million) is deducted from the operating profit.

After the distribution to shareholders of €207 million, the level of debt (LTV) stood at 35%, with a liquidity position of €1,309 million and an average maturity of 5.1 years.


The office portfolio saw a significant increase in like-for-like rents (+6.1%) thanks to indexation and the rise in rents in renovations. The market occupancy rate was beaten, reaching 92.5%.

Under the Landmark Plan, the first tenants of Plaza Ruiz Picasso 11 started occupying the building in the last quarter of the year, while others are occupying the building throughout 2024. These are first class tenants, at prime rents, in line with the quality of the property.


The logistics portfolio performed very well in the year, with like-for-like rents up 4.8% thanks to improved occupancy, indexation and higher rents in renovations. In terms of marketing, more than 297,000 sqm were signed. Occupancy is virtually full in both MERLIN (99%) and ZAL Port (96.9%).

The development of the Best II and III plans continues, with 478,000 square metres delivered to date at an average yield of 7.8%. The company has completed and leased to Pepco in the first quarter of 2024 the only warehouse developed during 2023 (A2-Cabanillas Park II B), with 47,000 sqm.

MERLIN has more than 550,000 sqm of additional land for development, which allows the company to accompany the expansion of its tenants in the future. In the coming months, construction will start on a further 140,000 sqm for delivery in early 2025, with a very high level of pre-commercialisation (+80%).

Shopping centres

Occupancy in shopping centres (96.2%) has increased 122 bps in 2023 with a solid operating performance. Tenant sales are above pre-COVID levels (+14%), December inflows are also already above the 2019 figure (+1.2%) and continue to improve versus 2022 (+5.0%), with the effort rate at historic lows (11.7%).

Mega Plan (Data Centers)

The Madrid-Getafe, Barcelona-PLZ and Bilbao-Arasur data centres have been operational since 30 September 2023, with 9 MW IT installed of the 60 MW IT capacity they allow.

MERLIN has decided to accelerate the reception and installation of equipment in view of the strong demand in commercialisation, derived from the rise of generative artificial intelligence. In this regard, pilot technical modifications have begun in Barcelona-PLZF to adapt cooling systems to the high densities required in this industry and work is underway to repower those centres that allow it, capitalising on the space savings generated by these densities.

This category of assets will come to represent a very significant percentage of the company's revenues in the medium term, with long leases and high credit quality tenants, leaders in the technology sector. 

Investment and divestment activity

Investment activity in the year was moderate, limited to the acquisition of the department store in Marineda and the final payment of €22.8 million for logistics land in Valencia.

In terms of divestment activity, non-strategic assets were sold in 2023 for €38.3 million, including two secondary shopping centres, a residential unit, a supermarket and an industrial asset.


MERLIN's good year was strongly endorsed in sustainability ratings, improving its score compared to 2022 in six of the seven indices (GRESB, CDP, S&P Global, Sustainalytics, Bloomberg, ISS and Vigeo Eiris). Two milestones stand out: MERLIN's inclusion in one of the most prestigious sustainability ratings in the world (and where there are only five European real estate companies), the Dow Jones Sustainability World Index and, for the third consecutive year, in the Dow Jones Sustainability Europe Index.

Outlook for 2024

In the absence of macroeconomic and/or political externalities, occupancy levels in the three main asset classes (offices, logistics and shopping centres) are expected to remain broadly unchanged, while rents will continue to benefit from inflation, as leases are index-linked.

Data centres will affect negatively (in the short-term) net cash flow. This is a consequence of the time lag between expenses (practically those corresponding to an ordinary year, as the centres are already operational) and revenues, which will gradually increase as they have electricity power and IT equipment installed in the different locations until reaching their maximum potential, expected for the end of the second half of 2025.

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