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Merlin Consolidates Assets Following Merger With Metrovacesa

21 October 2016 – Expansión

Merlin Properties is entering a new phase. After completing the merger with Metrovacesa, the Socimi wants to initiate a new phase of asset consolidation. “Our goal is to not grow any larger”, said Ismael Clemente (pictured above), Chairman of the firm, speaking yesterday at the Barcelona Meeting Point real estate fair, which is being held from 19-23 October in the Catalan capital.

This new phase is looking for a soft landing following the merger with Metrovacesa. The primary objective of this process is to increase the value of the assets in Merlin’s portfolio. To this end, capital investments will be made in offices and in other assets owned by the Socimi.

Clemente also confirmed that 75% of Merlin’s offices are more than 10 years old and that the consolidation will be based on improving these spaces, in accordance with the new upwards cycle in the sector, which is leading to price rises and improved facilities. The recovery in the value of offices, above all in Madrid and Barcelona, is “just in its first phase”, said Clemente.

The Director said he was confident in the opportunities being offered in this segment compared with the situation in other European markets – such as the German, French and British markets – where prices are more mature. Even so, the Chairman of Merlin thinks that Spain is still a secondary country within the European real estate sector, given the insufficient legal security here and the lower presence of overseas investment compared with other markets across the Continent.

The merger with Metrovacesa is expected to be definitively formalised this month, following the payment of a €60 million dividend on 25 October, which was approved in a Board Meeting held last Wednesday.

Clemente regards the logistics sector as one of the best positioned in terms of investment following the downturn it suffered during the economic crisis. “Historically, the logistics sector has been undeveloped in Spain”, said the Chairman of Merlin.

Nevertheless, the recovery and development of online commerce is allowing the logistics sector to return to pre-crisis levels. Merlin considers that there are few investment opportunities left in the shopping centre segment and that only shopping macro-complexes, with flexible legislation, will offer the right conditions for investment.

Meanwhile, Clemente said that the disputes over forming the new government, and the nationalist tensions “have both gone too far”.

The merger with Metrovacesa will turn Merlin into the largest real estate company in Spain, with assets worth more than €9,000 million. The Socimi generated profits of €211 million during the first half of the year, up by 77% compared with the same period in 2015.

Original story: Expansión (by Eric Galián)

Translation: Carmel Drake