Tag: Torre Glòries

Merlin Earned €1.1bn in 2017 & Will Pay A Complementary Dividend

28 February 2018 – Expansión

The Socimi in which Santander and BBVA hold stakes doubled its earnings last year to €1.1 billion, compared with €582.6 million the previous year.

The Socimi Merlin Properties closed 2017 with revenues of €484.3 million, up by 34% compared to the previous year. Of that figure, €469.4 million stemmed from gross rental income.

Operating profits grew by 49% to €1.215 billion, whilst recurring EBITDA reached €396.6 million, up by 29% compared to 2016.

At the end of the year, the company owned a portfolio worth €11.254 billion, up by 15% compared to the previous year and 10% larger in terms of comparable surface area. Of that figure, €5.219 billion corresponds to its office portfolio, the value of which grew by 4.1% like for like.

At the end of the year, Merlin had gross financial debt amounting to €5.413 billion, placing its level of indebtedness (LTV) at 43.6%, compared with 45.5% a year ago. The CEO of Merlin, Ismael Clemente, said that he was satisfied with that reduction and assured that his firm would continue working to reduce the liability (…).

For this year, the company has set itself the objective of repositioning its assets, such as the case of Torre Gloriès (Barcelona), whose marketing is forecast to begin during the first half of the year. In the case of new acquisitions, the directors of Merlin indicated that they are going to be “very selective” in their purchases, with the focus placed primarily on Portugal and logistics assets.

Complementary dividend

The real estate investment company has announced an increase in its complementary dividend, payable in May, of 26 cents per share, which will be added to the 20 cents already allocated to the account. In total, shareholder remuneration for this year is going to grow by 15% to reach 46 cents, compared with the 40 cents disbursed in the previous year.

Merlin revealed that for the year ahead, corresponding to the accounts for 2018, it is going to distribute a minimum of €235 million amongst its shareholders, a disbursement that it will pay in full in cash, which will correspond to more than €0.50 per share. This remuneration will be distributed partly as a dividend and partly as a refund of the share premium.

Executive salaries

The real estate company in which Santander and BBVA hold stakes also published the salaries of its main executives. In this way, it was revealed that the CEO, Ismael Clemente, was paid €2.557 million last year, compared to €2.155 million in 2016. Of that figure, €1 million corresponds to his salary, whilst €1.55 million corresponds to his bonus.

Meanwhile, Miguel Ollero, also CEO of Merlin Properties, was paid €2.5 million in 2017, compared to €2.1 million the previous year; meanwhile, the directors Rodrigo Echenique, Francisco Javier García-Carranza and Agustín Vidal did not receive any remuneration whatsoever for their roles on the Socimi’s Board of Directors.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

The Profits Of Spain’s Top 5 Socimis Rise By 68%

16 November 2017 – Expansión

Spain’s principal Socimis are continuing to register record-breaking numbers and improve their balance sheets thanks to the on-going real estate boom and the appreciation of their assets. In this way, during the first nine months of the year, Merlin, Colonial, Hispania, Axiare and Lar España saw their combined net profits soar by 68% and the value of their property portfolios rise by 35%.

In total, the largest five Socimis that trade on the Spanish stock market earned €1,306 million during the nine months to September 2017. Their revenues during the same period amounted to €797 million, up by 30% compared to the first nine months of 2016. The reason why these companies earn more (profits) than they turnover (revenue) stems from the significant capital gains that they record from the appreciation of their real estate portfolios. In this way, for example, Merlin Properties and Hispania recorded €332.6 million and €204.82 million, respectively, for this concept, during the first 9 months of 2017.

These five real estate companies, which, with the exception of Colonial, debuted on the stock market just three years ago, currently own combined assets worth €24,295 million. Of that volume, two of the companies stand out due to their size: Merlin, which although it did not update its portfolio in the third quarter, is still the largest entity with an asset volume of €10,556 million; and Colonial, which owns properties worth €8,253 million.

Consolidation

The success of the Socimis, together with the good times that the real estate sector is enjoying, has led these companies to enter a new phase. In this way, after years of intense competition, the companies are starting to rotate their assets, by selling the properties that are not strategic as well as those that have reached a certain degree of maturity in their portfolios.

Such is the case of Merlin, which at the start of the year sold its hotel portfolio to Foncière de Murs Lar, for €535 million, and has deconsolidated its residential branch through Testa. Lar España has done something similar, given that in September it sold an office building to Colonial for €32.5 million, to focus on its current strategy of commercial assets.

Meanwhile, Hispania, which will focus its activity on hotels until its extinction, planned for 2020, is continuing with the unitary sale of homes and is also preparing the sale of its office portfolio, although it has had to postpone that operation until the first quarter of next year in light of the Catalan crisis.

These real estate companies are also backing investments that involve the revaluation of the assets they have acquired. Such is the case of, for example, Merlin, which after absorbing the real estate portfolio from Metrovacesa, is updating its portfolio, with an investment of €95 million to renovate six shopping centres. The Socimi in which Santander and BBVA hold stakes is also investing another €46 million in the construction of a new office tower (Torre Chamartín) in Madrid and in the renovation of Torre Glòries. Meanwhile, Lar España has managed to increase the value of its portfolio by more than €230 million with respect to the purchase price of its properties.

Moreover, the market is preparing for consolidation between the Socimis. The first move in this sense came last Monday with the launch of a takeover by Colonial for Axiare. The former announced the purchase of an additional 13.3% stake in Axiare on Monday and a takeover bid for the remaining 71%.

Stock market

Merlin, Hispania, Axiare and Lar raised almost €2,560 million in their respective debuts on the stock market and they have a combined market capitalisation of €9,060 million.

Including Colonial, whose General Shareholders’ Meeting approved the adoption of the special tax regime for Socimis in June, with retroactive effect to January, the stock market value of the large Socmis amounts to €12,038 million. In addition, Colonial’s bid for Axiare has raised its stock market value by €154 million in three days.

Original story: Expansión

Translation: Carmel Drake

Merlin To Invest €460M On Improving Its RE Portfolio

24 October 2017 – El Español

Merlin Properties plans to invest around €459 million in the renovation and improvement of several office buildings, shopping centres and logistics facilities that comprise its real estate portfolio. The entity plans to undertake this work between 2018 and 2021, according to reports from the Socimi in which Santander and BBVA hold a stake.

The company led by Ismael Clemente (pictured above) calculates that these improvements will generate additional revenues from rental income amounting to €60.9 million per annum.

Merlin estimates that these improvements, together with its management and the natural growth of the assets, will allow it to raise its current revenue from rental income by 22% and whereby exceed the €500 million threshold, without the need to purchase any new properties.

That is according to the company, which is currently the largest listed real estate firm by asset value. It is holding its “Investor Day” in Barcelona this week, despite the uncertainty currently hanging over Cataluña.

During the event, the firm unveiled a presentation, which has been submitted to Spain’s National Securities Exchange Commission (CNMV), detailing the assets that Merlin plans to renovate.

The list includes the building that houses Sacyr’s headquarters in the centre of Madrid, at numbers 83 and 85 on Paseo de la Castellana, the heart of the capital’s business district.

The Socimi will spend €20 million on a comprehensive renovation of that property, which it expects to complete by 2020 and which will involve a radical change to its external appearance, which will be completely glazed.

Merlin’s list of renovations also includes investments and construction work in Barcelona, in properties as iconic as Torre Glories, the building formerly known as Torre Agbar.

There, the firm will spend €15 million to convert the tower into a “multi-tenant” office building. Moreover, it will install an observatory at the top of the tower, on the 30th floor (…).

Original story: El Español

Translation: Carmel Drake

Savills: Office Inv’t In Barcelona Exceeds Madrid For First Time Ever

25 April 2017 – La Vanguardia

Transactions in the Spanish office market amounted to almost €900 million during the first quarter of 2017, more than twice the figure recorded during the same period in 2016. Moreover, Barcelona exceeded Madrid in terms of investment, for the first time, with a differential of €50 million – investment in Barcelona amounted to €450 million – driven by the purchase of Torre Glòries, according to data from the real estate consultancy firm Savills.

Two mega-operations amounting to more than €100 million each boosted office investment during the first quarter, which represented 30% of the total figure recorded during the whole of 2016. Firstly, during the second week of January, Merlin Properties announced the purchase of Torre Glòries (Torre Agbar) for €142 million.

The second deal saw the sale of the so-called Boston portfolio, comprising 14 BBVA office buildings (eight in Barcelona, five in Madrid and one in Valencia), which were sold to Oaktree and Freo.

According to Savills, the operation involving Torre Glòries is one of the largest recorded in Barcelona in recent years, exceeded only by the €145 million that Deka spent in 2010 on the former headquarters of Caja Madrid on La Diagonal.

The fact that 20 of the 35 assets that changed hands during the quarter were located in Barcelona significantly increased the Catalan capital’s share of the national total. The city accounted for 52% of total investment, which allowed it to exceed Madrid for the first time in the historical series.

The volume of office investment in Barcelona amounted to almost €450 million, compared with €40 million during the same period in 2016. In Madrid, office investment exceeded €400 million, an amount that was distributed between thirteen assets. In interannual terms, the volume of investment in the capital increased by 60%. One of the major operations in Madrid was the sale of Barclays headquarters in Plaza de Colón, which was acquired by CBRE Global Investors for more than €55 million.

Original story: La Vanguardia

Translation: Carmel Drake