Merlin Properties' EBITDA grows 3.6% to €93.6M

Merlin Properties' EBITDA grows 3.6% to €93.6M

Merlin Properties achieved total revenues of €127.3 million, including gross rents of €124.2 million, in the first quarter of 2024. The company remains on a positive path with like-for-like rents increasing and occupancy stable at 95.8%.

Operating profit reached 72 million (15 euro cents per share), while net income was 64.8 million, with both metrics slightly affected by the start-up of data centre operations and higher financial expenses. EBITDA reached €93.6m, up 3.6% compared to the same period of 2023.

The net asset value stood at EUR 7,139 million (€15.20 per share), although no new asset valuation has been performed (it is only performed in June and December each year).

The level of indebtedness (LTV) stands at 35%, with a liquidity position of 1,393 million euros and an average maturity of 4.9 years. All maturities until November 2026 have been covered with a combination of bank debt and bonds.

The rating agency S&P has upgraded MERLIN's credit rating to BBB+ thanks to lower indebtedness and improved cash flow generation profile.

The company will pay 24 euro cents per share in the final 2023 distribution on 4 June, which, added to the distribution in December, amounts to 44 euro cents per share.

Performance by sector

In offices, the company continues to see an increase in renewals (3.4%) despite high inflation in 2022 and 2023 and like-for-like rental growth of 2.8%. Occupancy remains stable at 92.2%. During the first quarter, 7,962 sqm were delivered to Willis Tower Watson and Globant and 6,188 sqm to LOOM (a coworking subsidiary) in Plaza Ruiz Picasso 11.

The performance of the logistics portfolio in the quarter was excellent, with like-for-like rents up 4.9%, an increase in rents in renovations (5.2%) and with the portfolio practically fully occupied (98.4%). In the first quarter, the only warehouse developed during 2023 (A2-Cabanillas Park II B), with 47,000 sqm, was handed over to Pepco. Merlin has more than 550,000 sqm of additional land for development, allowing the company to accompany the expansion of its tenants in the future. A further 140,000 sqm to be delivered over the course of 2025, with a very high level of pre-commercialisation (+80%).

In shopping centres, operating performance remains solid (+4.8% comparable rental growth). Sales (+8.1%) and inflows (+6.6%) comfortably exceed 2023 levels and the effort rate remains at historic lows (11.6%).

The data centres in Madrid-Getafe, Barcelona-PLZF and Bilbao-Arasur are fully operational and delivered to customers. On the other hand, both the construction licence and the power for the Lisbon-VFX data centre have already been obtained and in Bilbao-Arasur the construction licence for Building 2 is expected to be obtained before the end of the year.

Investments and divestments

Investment activity during the year was moderate, limited to the consolidation of 100% ownership in the Plaza Ruiz Picasso extension, a building of nearly 4,500 sqm annexed to the Plaza Ruiz Picasso 11 development.

In terms of divestment activity, non-strategic assets were sold in the first quarter for €3 million. In addition, a further 79.3 million is expected to be signed during the year, at a double-digit premium to 2023 valuations.

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