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O C T O B E R 2 0 1 7
MERLIN PROPERTIES COMPANY OVERVIEW
ı 2 ı
This presentation has been prepared by MERLÍN Properties, SOCIMI, S.A. (the Company) for informational use only.
The information contained in this presentation does not purport to be comprehensive or to contain all the information that a prospective purchaser of securities of the Company may desire or require in deciding whether or not to purchase such securities, and has not been verified by the Company or any other person. The information contained in this document is subject to change without notice. Neither the Company nor any of affiliates, advisors or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of any information contained or referred to in this document. Each of the Company and its employees, officers, directors, advisors, agents or affiliates expressly disclaims any and all liabilities whatsoever (in negligence or otherwise, whether direct or indirect, in contract, tort or otherwise) for any loss howsoever arising from any use of this presentation, the information contained or referred to therein, any errors therein or omissions therefrom or otherwise arising in connection with this presentation. Neither the Company, nor any of its affiliates, advisors or agents undertakes any obligation to provide the recipients with access to additional information or to update this document or to correct any inaccuracies in the information contained or referred to therein.
Certain statements in this document regarding the market and competitive position data may be based on the internal analyses of the Company, which involve certain assumptions and estimates. These internal analyses may have not been verified by any independent sources and there can be no assurance that the assumptions or estimates are accurate. Additionally, certain information in this presentation may be based on management accounts and estimates of the Company and may have not been audited or reviewed by the Company’s auditors, whereas the information on Metrovacesa S.A. and on certain competitors contained herein is based on publicly available information which has not been verified by the Company. Accordingly, recipients should not place undue reliance on this information.
This information is provided to the recipients for informational purposes only and recipients must undertake their own investigation of the Company. The information providing herein is not to be relied upon in substitution for the recipient’s own exercise of independent judgment with regard to the operations, financial condition and prospects of the Company.
Neither this presentation nor any copy of it shall be taken, transmitted into, disclosed, diffused, send, published or distributed in the United States, Canada, Australia or Japan. The distribution of this
presentation in other jurisdictions may also be restricted by law and persons into whose possession this presentation comes should inform themselves about and observe any such restrictions. In particular, any offer that might result from the transaction herein escribed will not be made, directly or indirectly, in the United States of America, or by use of mails, or by any means or instrumentality (including, without limitation, facsimile transmission, telephone and internet) of interstate or foreign commerce of, or any facilities of any national securities exchange of, the United States, Canada, Australia or Japan. The securities of the Company have not been and, should there be an offering, will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act) and, subject to certain exceptions, may not be offered or sold in the United States. The securities of the Company have not been and, should there be an offering, will not be registered under the applicable securities laws of any state or jurisdiction of Canada or Japan and, subject to certain exceptions, may not be offered or sold within Canada or Japan or to or for the benefit of any national, resident or citizen of Canada or Japan.
THIS PRESENTATION DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER FOR SALE OR SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES IN THE UNITED STATES OR IN ANY OTHER JURISDICTION, NOR SHALL IT OR ANY PART OF IT FORM THE BASIS OF OR BE
RELIED ON IN CONNECTION WITH ANY CONTRACT OR COMMITMENT TO SELL OR PURCHASE SHARES. ANY DECISION TO SELL OR PURCHASE SHARES IN ANY OFFERING SHOULD BE MADE SOLELY ON THE BASIS OF PUBLICLY AVAILABLE INFORMATION.
This presentation may include forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause such actual results, performance or achievements, or industry results, to be materially different from those expressed or implied by these forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of the Company and the environment in which they expect to operate in the future. Forward-looking statements speak only as of the date of this presentation and the Company expressly disclaim any obligation or undertaking to release any update of, or revisions to, any forward-looking statements in this presentation, any change in their expectations or any change in events, conditions or circumstances on which these forward-looking statements are based.
In reviewing this presentation, the recipient is agreeing to, and accepting, the foregoing restrictions and limitations.
DISCLAIMER
Contents
Strategy
Positioning
Offices
Shopping Centers
Logistics
Subsidiaries
Value creation
Capital Structure
Appendix
Governance
Portfolio in detail
ı 4 ı
MERLIN today | Overview
(1) Fully consolidated excluding assets where MERLIN holds a minority stake(2) GAV: appraised value as of June 2017. GAV of land under development included in its respective category (offices and logistics)(3) Annualized gross rents calculated as passing gross rent as of June 30, multiplied by 12. GRI includes fully consolidated assets(4) Includes 3 hotels, non-core yielding assets and non-core land
LARGEST AND MOST DIVERSIFIED SPANISH REIT
Fast facts
ASSETS(1)
1,159
OCCUPANCY RATE(4)
93.1%
GAV(2)
€ 10.5bn
GRI(3)
€ 467.3m
GROSS YIELD4.9%
GLA OWNED(1)
3,210 k sqm
WAULT(4)
6.7 years
Portfolio breakdown
48.4%
21.1%
16.2%
6.9% 7.4%
46.6%
22.3%
19.6%
8.8% 2.7%
by GAV(2)
by GRI(3)
48.4%
21.1%
16.2%
6.9% 7.4%
46.6%
22.3%
19.6%
8.8% 2.7%
by GAV(2)
by GRI(3)
High Street retail Logistics
Offices Shopping Centers Other(4)
Capital structure
MARKET CAP> €5.0 bn
EPRA NAV PER SHARE€ 5.6 bn / € 11.89
LTV45.6%
AV. MATURITY6.2 years
STANDARD & POOR’SBBB
AV. INTEREST RATE2.2%
MOODY’SBaa2
STRATEGY
ı 6 ı
Strategy | Strategy pillars
Core & Core Plus Spain & Portugal
Investment grade capital structure
Dividend policy: 80% of AFFO
One of the world’s
most cost efficient
REIT’s
Best governance
practices
Breadth of prime space Madrid, Barcelona and Lisbon
Urban or Dominant National scale
Office
40%Shopping Centers
20%
A CLEARLY DEFINED STRATEGY INSPIRED BY THE BEST U.S. REIT PRACTICES
National footprint “One-stop shop” solution for 3PL
Logistics
20%High triple net cash flow
Inflation multiplier
High Street Retail
20%
POSITIONING
ı 8 ı
Positioning | Fast facts
#1 REIT IN OFFICE, HIGH STREET RETAIL AND LOGISTICS + #2 REIT IN SHOPPING CENTERS
(1) Excluding non-core land(2) Data for Minority Stakes is reported for 100% of the subsidiary(3) Total expected gross rents. GAV includes acquisition cost plus estimated Capex(4) Deducting ground lease expenses
MINORITY STAKES(2)
#1 Office
• Flexibility to offer multitenant or headquarter buildings
• Capacity to adapt to the needs of the tenant
138 ASSETS
1,255 K SQM
€ 4.8 BN GAV
€ 218 M GRI
FULLY CONSOLIDATED(1)
#1 High Street
retail
• Excellent conditions of BBVA lease agreement: triple net lease with 1.5x HICP annual uplift
• Optimization of retail space in office buildings
929 ASSETS
460 K SQM
€ 2.2 BN GAV
€ 104 M GRII
• “One-stop-shop” solution for logistics operators wishing to operate across Spain
• Big footprint to match the rapid development of 3PL activity
ZAL PORT 32%43 ASSETS
431 K SQM
€ 26 M GRI(4)
38 ASSETS
921 K SQM
€ 0.6 BN GAV
€ 41 M GRI
Existing
Existing
WIP
WIP
13 ASSETS
580 K SQM
€ 0.3 BN GAV(3)
€ 24 M GRI(3)
3 ASSETS
96 K SQM
€ 0.4 BN GAV(3)
€ 24 M GRI(3)
#1 Logistics
#2 Shopping
Centers
• Mainly urban footprint in high GDP/capita areas in Spain
• Reference landlord for top retailers
• Critical mass with retail brands
TRES AGUAS 50%1 ASSET
67 K SQM
€ 10 M GRI
17 ASSETS
455 K SQM
€ 1.7 BN GAV
€ 92 M GRI
ı 9 ı
FY 16 Financial ResultsPositioning | GAV summary
Gross yield
€/sqm AG
LfL growth
O
ffices
3,803
4,772
4.6%
4.7%
Sh
op
pin
g c
en
ters
3,721
1,694
5.1%
5.4%
Lo
gis
tics
7.0%
641
590
6.0%
Hig
h S
treet
Reta
il
4.7%
4,798
2,208
0.2%
Oth
er 294
2,487
-
-
Lan
d f
or
develo
pm
en
t (i
ncl W
IP)(1
)
422
625
-
-
TO
TA
L
10,113
2,371
4.9%
3.7%
Eq
uit
y m
eth
od
346
3.6%
TO
TA
L
10,459
3.7%
No
n-c
ore
lan
d
132
348
-1.5%
-
GAV(€ million)
Source: Company(1) Including Non income producing assets such us Logistic WIP and office WIP (Torre Charmatin and Torre Glories)
ı 10 ı
Positioning | Trading update 6M2017
GOOD PERFORMANCE AND PROSPECTS ACROSS THE BOARD
Rent LfL
YoY(1)
sqm contracted
Release spread(2) #contracts
Occ. 30/06/17
Occupancy vs 31/12/16 (bps)
Office +2.7% 236,084 +3.4% 99 89.3% +132
Shopping Centres +3.0% 71,587 +5.5% 84 89.3% +68
High street retail +0.9% - n.m. - 100% -
Logistics +6.9% 183,121 +16.3% 6 98.6% +329
Other +11.2% - n.m. - 76.1% (36)
TOTAL +2.6% 490,797 189 93.1% +177
(1) EPRA standard porfolio in operation for the 6M16 and for the 6M17(2) Change in rent in renewals and relets that have taken place in 6M16 (all portfolio)
ı 11 ı
0,0
€60.0m
€160.2 m
€206.7m
€ 9.4m(Guidance Update)
New guidance
Previous guidance
€ 216.1m
2014 2015 2016 2017E
(Eurm
illio
n)
(€ per share)
0.19 p.s.
0.40 p.s.
+15% +4.6%0.44 p.s.
0.46 p.s.
• Calculated on the basis of 80% of AFFO
• Payment in two instalments
• All cash
Positioning | Dividend distribution evolution
DPS GUIDANCE REPRESENTS +15% GROWTH YOY 2017 VS 2016
Source: Company
OFFICES
ı 13 ı
Reversion in MVC assets
By geography By location By product
Top 10 tenants
35% GRI
Breadth of prime space in Madrid, Barcelona
and LisbonCapex program
Selective development
Reversion in MVC assets
Breakdown
Value drivers
PRIME SPACES IN BOTH CBD AND NBA OFFERING A WIDE VARIETY OF SOLUTIONS TO CLIENTS
Offices | Overview
(1) Annualized gross rental income calculated as passing gross rents as of June 30, multiplied by 12(2) GAV includes acquisition cost plus estimated Capex. Total expected gross rents
Fast facts
# ASSETS 138 3GLA (sqm) 1,255 k 96 kGAV (€ M)
218(1)
GROSS YIELD 4.8%
Existing WIP
OCCUPANCY 89%
4,772 392(2)
24(2)GRI (€ M)
990K MAD (76%)249K BCN (19%)48 K LISBON (4%)
• Barcelona 13%
• Lisbon 5%
• Other Spain 1%
• Madrid 81%
• Prime + CBD 37%
• Periphery 12%
• NBA 51% • Multi tenant 64%
• Single tenant 36%
Otros
Lisbon
Barcelona
�Madrid
• Barcelona 13%
• Lisbon 5%
• Other Spain 1%
• Madrid 81%
• Prime + CBD 37%
• Periphery 12%
• NBA 51% • Multi tenant 64%
• Single tenant 36%
Otros
Lisbon
Barcelona
�Madrid
• Barcelona 13%
• Lisbon 5%
• Other Spain 1%
• Madrid 81%
• Prime + CBD 37%
• Periphery 12%
• NBA 51% • Multi tenant 64%
• Single tenant 36%
Otros
Lisbon
Barcelona
�MadridBy GAV By GAV By GAV
ı 14 ı
Offices | Developments
GLA 37,614 sqm
ERV € 10.3m
ERV YoC 6.5%
Acquisition € 142m
Investment € 15m
Delivery Mar-18
• One of the most iconic buildings in Barcelona, located in the prime area of Diagonal junction with Plaza de les Glòries (22@)
• New lobby almost completed, floors redesign works recently commenced
• LEED Platinum tower, located in the junction between A-1 and M-30
• AAA specifications, led by arquitect Miguel Oriol
• Works well advanced with good savings over original budget
GLA 16,639 sqm
ERV € 3.9m
ERV YoC 6.25%
Acquisition € 31.0m
Investment € 31.0m
Delivery Mar-18
• A tower with highest standards in the market
• Located in the heart of Adequa business park
GLA 41,670 sqm
ERV € 10.1m
Capex € 57.2m
Delivery 2021
Torre Glòries
Torre Chamartín
Torre Adequa
ı 15 ı
Offices | Up-coming refurbishments
Avda. Europa
Puerta de las Naciones
Eucalipto 33
Balmes
Juan
Esplandiu
Scope
Full refurb
Full refurb
Lobby +
common areas
Full refurb
Façade + lobby +
individual floors
Budget
€ 6.6m
€ 5.0m
€ 3.4m
€ 1.8m
€ 1.8m
% executed
100%
86%
11%
1%
58%
GLA (sqm)
12,605
10,619
7,185
6,187
28,008
Delivery
Sep-17
Dec-17
Oct-17
Jun-18
Dec-17
Pre-let
100%
100%
Initial phase
100%
84%
SHOPPING CENTERS
ı 17 ı
(1) 100% of Tres Aguas of which MERLIN owns 50%(2) Annualized gross rental icome calculated as passing gross rent as of June 30, multiplied by 12
By geography By type By size(2)
Top 10 tenants
28% GRI
Capex Program
Dominant and urban
Integration with e-commerce
Value drivers
Reversion in MVC assetsFast facts Breakdown
URBAN AND DOMINANT ASSETS OFFERING NATIONAL SCALE IN HIGH GDP/CAPITA AREAS
# ASSETS 17 1GLA (sqm) 455 k 67 k
GAV (€ M) 1,694GROSS YIELD 5.4%
Fully Consol.
Tres Aguas(1)
OCCUPANCY 89%ANNUAL FOOTFALL 100 m pax
GRI (€ M) 92 10
Shopping Centers | Overview
• Medium 31%
• Extra-large 18%
• Small 8%
• Large 43%• Catalonia 19%
• Galicia 18%
• Madrid 17%
• Valencia 13%
• Andalusia 8%
• Murcia 5%
• Lisbon 1%
• Other Spain 19%
Other Spain
Lisbon
Murcia
Andalusia
Valencia
Madrid
Galicia
Catalonia• Urban 61%
• Secondary 21%
• Dominant 18%
• Medium 31%
• Extra-large 18%
• Small 8%
• Large 43%• Catalonia 19%
• Galicia 18%
• Madrid 17%
• Valencia 13%
• Andalusia 8%
• Murcia 5%
• Lisbon 1%
• Other Spain 19%
Other Spain
Lisbon
Murcia
Andalusia
Valencia
Madrid
Galicia
Catalonia• Urban 61%
• Secondary 21%
• Dominant 18%
• Medium 31%
• Extra-large 18%
• Small 8%
• Large 43%• Catalonia 19%
• Galicia 18%
• Madrid 17%
• Valencia 13%
• Andalusia 8%
• Murcia 5%
• Lisbon 1%
• Other Spain 19%
Other Spain
Lisbon
Murcia
Andalusia
Valencia
Madrid
Galicia
Catalonia• Urban 61%
• Secondary 21%
• Dominant 18%
By GAV By GAV By GAV
ı 18 ı
Shopping Centers | Up-coming refurbishments
Marineda
El Saler
Thader
Arturo Soria
Scope
Sports area
creation
Extension (+3,100 sqm), façade and accesses
Nickelodeon park and
common areas
Façade, accesses,
installations, lighting
and floors
Budget
€ 1.6m
€ 13.1m
€ 8.9m
€ 2.8m
% executed
100%
5%
85%
16%
GLA (sqm)
3,402
23,086
5,096
5,974
Delivery
Sep-17
Dec-18
Oct-17
April-18
Pre-let
91%
n.a.
100%
n.a.
LOGISTICS
ı 20 ı
By geography By reach By tenant type
Top 10 tenants
54% GRI
National footprint to offer “one stop shop”
solutionsTurn-key and development program
Location and access in main logistics hubsValue drivers
Reversion in MVC assetsFast facts Breakdown
(1) Figures reported for 100% of ZAL Port(2) Annualized gross rental icome calculated as passing gross rent as of June 30, multiplied by 12(3) Total expected gross rents. GAV includes acquisition cost plus estimated Capex
NATIONAL FOOTPRINT IN MAIN LOGISTICS HUBS
Existing WIP
# ASSETS 38 13 43
GLA (Sqm) 921 k 580 k 431 k
GAV (€ m) 590 298(3)
GRI (€ m) 41(2) 24(3) 26
GROSS YIELD 7.0%
ZAL Port(1)
OCCUPANCY 99% 96%
Logistics | Overview
• 3PL mono-client 19%
• End user 30%
• 3PL multi-client 51%
• Basque Country 5%• Sevilla 8%• Catalonia 24%• Madrid 57%
• Other Spain 6%• Production related 4%• Ports 24%• Regional 28%• National 44%
Other Spain
Basque country
Seville
Barcelona
�Madrid
• 3PL mono-client 19%
• End user 30%
• 3PL multi-client 51%
• Basque Country 5%• Sevilla 8%• Catalonia 24%• Madrid 57%
• Other Spain 6%• Production related 4%• Ports 24%• Regional 28%• National 44%
Other Spain
Basque country
Seville
Barcelona
�Madrid
• 3PL mono-client 19%
• End user 30%
• 3PL multi-client 51%
• Basque Country 5%• Sevilla 8%• Catalonia 24%• Madrid 57%
• Other Spain 6%• Production related 4%• Ports 24%• Regional 28%• National 44%
Other Spain
Basque country
Seville
Barcelona
�MadridBy GAV By GAV By GAV
ı 21 ı
Logistics | Up-coming refurbishments
Budget
% executed
GLA (sqm) Delivery Pre-let
Meco II € 29.4m 100% 59,891 Jul-17 100%
Pinto I € 5.8m 100% 11,098 Jul-17 100%
Pinto II € 20.2m 50% 59,017 Jul-17 100%
Azuqueca II € 47.4m - 98,000 Built to suit
-
Sevilla ZAL I € 2.7m 10% 5,400 Jan-18 100%
Madrid-Getafe
(Gavilanes)
€ 32.1m 100% 39,576 Dec-17 -
ı 22 ı
Logistics | Location of main hubs (Madrid)
Stock Name GLA (sqm)
1 Madrid - Coslada 28,490
2Madrid - Coslada Complex
36,234
3 Madrid - Meco I 35,285
5Guadalajara - Azuqueca I
27,995
8Guadalajara - Alovera
38,763
9Guadalajara - Cabanillas I
70,134
10Guadalajara - Cabanillas Park I
202,600
12 Madrid - Getafe 16,242
13Madrid - Getafe (Los Olivos)
11,488
WIP Name GLA (sqm)
4 Madrid - Meco II 59,891
6Guadalajara - Azuqueca II
98,000
7Guadalajara - Azuqueca III
51,000
11Guadalajara - Cabanillas Park II
210,678
14Madrid - Getafe (Gavilanes)
39,576
15 Madrid - Pinto 70,115
16 San Fernando I 11,165
ı 23 ı
Logistics | Location and access in main hubs (Barcelona)
Stock Name GLA (sqm)
1 Barcelona - ZAL Port 415,907
2 Barcelona - PLZF 131,003
3 Barcelona - Lliça del Vall 14,911
4 Barcelona - Sant Esteve 16,812
5 Barcelona - Granada Penedés 16,758
6 Barcelona - Castellbisbal 21,508
SUBSIDIARIES
ı 25 ı
Ownership
13% 1%
Other
39% 26% 21%
Subsidiaries | Testa Residencial
# Units 9,084
Free 6,991
Protected 2,093
GRI (€m) 70
Gross Yield 3.2%
GAV (€m) 2,179
Net debt (€m) 361.5
NAV (€m) 1,875.5
CREATING THE NATIONAL LEADER
Description Key Metrics
• National leader in the attractive rented residential market in Spain
• Mostly comprising free housing (77%) and Madrid representing the largest location by units (64%)
• Internally managed under MERLIN’s supervision
ı 26 ı
Subsidiaries | CILSA
PLZF
El Prat AirportPort of Barcelona
ZAL BCN
ZAL Prat
Description Key Metrics
• ZAL Port manages the logistics area of the Port of Barcelona. Conveniently located in Barcelona’s primest logistics area, enjoys direct access to railway and port services, only 4 km away from El Prat airport.
• ZAL Port is divided into 2 main logistics areas (ZAL Prat and ZAL Barcelona) which together comprise over 431k sqm of built warehouses, 400k sqm of land for potential development and more than 400k sqm of land let under leasehold schemes.
63.0% 5.0%
31/06/2017
GRI (post canon) € 26m
Occupancy (%) 96%
OwnershipTop tenants
32.0%
VALUECREATION
ı 28 ı
Value creation | Delivered
BALMES 236
6,187 sqmGLA
100% Occupancy
THE PLAN
• Transformation of a
multi-tenant C asset in
an excellent location into
a B+ mono-tenant HQ
ACTIONS
• Commercialization by
internal leasing team
• Technical supervision
by internal technical team
• Pre-let to Eugin, Spanish
leader in fertility
investigation
€ 8m Capexmostly borne by tenant (€1.8 by MRL)
Occupancy59%
100%
(€/sqm/m)
12.4+29%
16.0
39%ROI
ı 29 ı
Value creation | Delivered
MARINEDA SPORTS AREA
3,402 sqm GLA
€ 2.5m Total Cost
€ 0.45mRents
18%ROI
THE PLAN
• Transformation of an
unborn luxury brands area,
with high vacancy, into a
sports related area
ACTIONS
• Redesign to improve
visibility, vertical
connections and interior
design
• Change of flooring, lighting,
furniture and digitalization
• Re-tenanting plan
• In-house project
management
91% Occupancy
1st store in a shopping center in Spain
Succesful retenanting
Largest gym operation in NW Spain
2nd store in a shopping center in Spain
1st store in Galicia
ı 30 ı
Value creation | Delivered
MERLIN-CABANILLAS PARK I
202,607 sqm GLA
Largest Park built since 2007
100% Occupancy
8.2% Yield on cost
30% valuation uplift
THE PLAN
• Development of a large logistics park in the main hub in Spain, with the highest specifications to meet the needs of 3PLs and e-commerce companies
ACTIONS
• Forward purchase agreement with two developers
• Price set in an inflationary
market
• No construction risk
• Leasing risk reduced through
rental guarantees
• Project monitored “in-house”
• MRL leasing team led commercialization
100% Occupancy
€ 7.8m Annual rents
Top tier tenants
ı 31 ı
#units 1,519 4,706 7,992 9,084
GRI 12 35 56 70
GAV 288 980 1,738 2,179
NAV 177 618 1,377 1,816
MRL stake 100% 34.2% 16.2% 12.7%MRL attributed NAV 177 212 223 231
Value creation |
EXCELLENT VALUE CREATION (+31% UPLIFT)
December 2015 December 2016
Testa + Metrovacesa portfolio
Testa portfolio
April 2017
Testa + Metrovacesa + banks portfolio
September 2017
Testa + Metrovacesa + banks + Acciona portfolio
SIMULTANEOUSLY IMPROVING TESTA RESIDENCIAL PROFILE: THE LEADER IN THE MARKET
ı 32 ı
Delivery Year
Pending Capex
Expected Rent
Development
Torre Glòries 2018
€ 129m € 29mTorre Chamartin 2018
X-Madrid 2018
Adequa 2021
RefurbishmentOffices 2017-2020
€ 174m € 12mShopping centers 2017-2020
Logistics WIP
Meco II 2017
€ 230m € 24m
Pinto I 2017
Pinto II 2017
Gavilanes 2018
Sevilla ZAL 2018
Azuqueca II 2018
Azuqueca III 2018
San Fernando 2018
Cabanillas Park II 2021
Value creation | Future growth drivers
ı 33 ı
Cash flow | Potential rental growth
+23%(€m)
30/06/17Annual
Gross rents
467.3
WIP & Development(2)
53.1
Refurbishment
12.0
Potential Annual
Gross rents
573.5
Reversionary(1) potential
41.1
(1) Not considering any rental market growth nor inflation(2) Includes Torre Glòries, Torre Chamartín, Adequa, X-Madrid and Logistic WIP
CAPITAL STRUCTURE
ı 35 ı
Debt position | Debt schedule and metrics 6M 2017
Source: Company
BBB
Baa2
30/06/17 31/12/16
Gross financial debt € 5,216m € 5,193m
Cash € 451m € 722m
Net financial debt € 4,765m € 4,471m
GAV € 10,459m € 9,824m
LTV 45.6% 45.5%
Average cost 2.24% 2.26%
Floating interest rate 1.6% 11.3%
Average maturity (years) 6.2 6.2
Liquidity € 871m € 949m
Non-mortgage debt 75.8% 75.6%
LONG-TERM, BALANCED MATURITY PROFILE
Unsecured loans
Secured bank loans
Leasing
Unsecured bonds
2 55
2017
510
124
2018
27
15
2019284
2020
840
81
2021
700
19
2022
850
41
2023
839
2024
600
158
2025
800
10
+2026
APPENDIX
GOVERNANCE
ı 38 ı
Governance | BoD composition | BoD / Audit &Control / Remuneration & Nomination
BOARD REDUCED TO 13 MEMBERS: 8 INDEPENDENT / 3 PROPIETARY / 2 EXECUTIVE
Mr. Javier García-Carranza Non-Executive Chairman
Mr. Ismael Clemente CEO & Executive Vice-Chairman
Mr. Miguel Ollero Executive Director
Mrs. Francisca OrtegaPropietary Director
Mr. José Ferrís Propietary Director
Mrs. María Luisa Jordá Independent Director Chairman A&C Committee
Mrs. Ana García Fau Independent Director
Mr. Alfredo Fernández Independent Director
Mr. Fernando Ortiz Independent DirectorMr. Donald Johnston
Independent Director Chairman A&R Committee
Mr. John Gómez Hall Independent Director
Mr. Juan María Aguirre Independent Director
Mrs. Pilar Cavero Independent Director
Appointments and Remuneration CommitteeAudit and Control Committee Independent Directors
Mrs. Mónica Martín de Vidales Secretary
Mr. Ildefonso Polo del Mármol Vice-Secretary
Next year target:
11 members
ı 39 ı
Governance | Remuneration policy | 2017-2019 Plan
INVESTOR ALIGNED, LONG - TERM ORIENTED INCORPORATING BEST MARKET PRACTICES
(1) Ultimate authority over the size and distribution of the STIP is the Nominations and Remunerations Committee and BoD
Overheads reduction as from 2018 onwards
Long - term incentive plan (“LTIP”) long-term oriented 3 years performance period
LTIP linked to
LTIP Caps, both globally and individually for Executive Directors
Other best practices provisions Clawback + malus
Non - compete
Severance regime: 2x (fixed + STIP)
Policy to own MERLIN shares: 3x fixed salary
Share price (1/3)
EPRA NAV (2/3)
2017 2018-19 2020 onwards
GRI 6% 5.75% 5.5%
NAV 0.6% 0.575% 0.55%
TOTAL OVERHEADS
- RUNNING COSTS
= BONUS POOL(1)
OVERHEADS - HIGHER OF:
ı 40 ı
Governance | Remuneration policy | LTIP 2017-2019
LONGER-TERM ORIENTATION (3 YEARS) AND GLOBAL + EXECUTIVE DIRECTORS CAPS
Plan for 2017–2019 period only
3-year measurement period
Metrics: 1/3 based on Share price TSR + 2/3 based on EPRA NAV TSR
Pillars
Hurdles on both Metrics
Caps
INCENTIVE
6% of TSR1ST HURDLE
TSR Rate ≥ 24%
31/12/16 31/12/19
9% of TSR2ND HURDLE
TSR Rate ≥ 36%
31/12/16 31/12/19
TSR =
TSR Rate =
(Share Price or EPRA NAV per share End of Period)
minus (Share Price or EPRA NAV per share Beginning of Period)
plus (dividends per share in the period)
TSR divided by Share Price or EPRA NAV per share Beginning of Period
Absolute global Caps (for 3 year period):
• On Share price TSR: €37.5m
• On EPRA NAV TSR: €75.0m
TOTAL: €112.5m
Executive Directors Cap: 625% of fixed salary
Maximum number of shares for Executive Directors: 2 million
(6 million shares, 1.26% fully diluted)
(€ 1.9 bn of return to shareholders generated)
ı 41 ı
Governance | Remuneration policy | Potential maximum dilution
GLOBAL CAP REPRESENTS 1.26% OF POTENTIAL MAXIMUM DILUTION IN 3 YEARS, WHICH EQUALS 0.42% ANNUALIZED DILUTION
Source: Company
TOTAL POTENTIAL MAXIMUM ANNUAL DILUTION IS ONE OF THE LOWEST
IN EUROPE
MERLINToday
MERLIN2020
Spanishpeers average
Europeanpeers average
1.02%
0.42%LTIP
0.97%
1.86%
1.14%
0.6%Overheads & Salaries
0.42%LTIP
0.55%Overheads & Salaries
PORTFOLIO IN DETAIL
ı 43 ı
Portfolio in detail | Office - Madrid
ı 44 ı
Portfolio in detail | Office - Madrid prime and CBD
Bernabeu Stadium
Retiro
Paseo de la Castellana
Parliament
Ventas bullring
M-30
Calle Alcalá
Gran Vía
Azca
Lima
Cuzco
Cibeles
Colón
Nuevos Ministerios
Bank of Spain
Serrano
José Abascal
Avd
a. A
mer
ica
Gregorio Marañón
Maria de Molin
a
Emilio Castelar
Puerta de Alcalá
Príncipe de Vergara
Bravo Murillo
Castellana, 259
Alcalá, 40
Castellana, 83 - 85
Ppe. Vergara, 187
P. Valdivia, 10
Madrid Town Hall
Alfonso XI, 6
Pza. Trias Bertran, 7
Castellana, 278Plaza Castilla
Castellana, 93
Princesa, 3 Princesa, 5
V. Rodríguez, 7
J.M. Churruca
Eucalipto, 25
Eucalipto, 33
Castellana, 280
ı 45 ı
Portfolio in detail | Office - Madrid (I)
City: Madrid
Location: CBD
GLA: 9,315 sqm
11. Alcalá, 38-40
City: Madrid
Location: CBD
GLA: 11,651 sqm
4. Castellana, 93 (Cadagua)
City: Madrid
Location: CBD
GLA: 10,732 sqm
7. Príncipe de Vergara, 187
City: Madrid
Location: CBD
GLA: 16,979 sqm
10. Beatriz de Bobadilla, 14
City: Madrid
Location: CBD
GLA: 16,918 sqm
2. Castellana, 280
City: Madrid
Location: CBD
GLA: 31,576 sqm
5. Plaza Pablo Ruíz Picasso (Sollube)
City: Madrid
Location: CBD
GLA: 9,945 sqm
8. Alfonso XI, 6
City: Madrid
Location: CBD
GLA: 14,468 sqm
3. Castellana, 278
City: Madrid
Location: CBD
GLA: 15,254 sqm
6. Castellana, 83-85
City: Madrid
Location: CBD
GLA: 6,721 sqm
9. Pedro de Valdivia, 10
City: Madrid
Location: CBD
GLA: 21,390 sqm
1. Torre Castellana, 259
City: Madrid
Location: CBD
GLA: 17,810 sqm
12. Princesa, 3
ı 46 ı
Portfolio in detail | Office - Madrid (II)
City: Madrid
Location: CBD
GLA: 5,788 sqm
13. Princesa, 5
City: Madrid
Location: CBD
GLA: 28,008 sqm
15. Juan Esplandiú, 11-13
City: Madrid
Location: NBA
GLA: 9,575 sqm
18. Ulises, 16-18
City: Madrid
Location: NBA
GLA: 7,515 sqm
22. Manoteras, 18
City: Madrid
Location: NBA
GLA: 4,482 sqm
23. Fuente de la Mora, 9
City: Madrid
Location: CBD
GLA: 10,071 sqm
14. Ventura Rodríguez, 7
City: Madrid
Location: CBD
GLA: 7,185 sqm
16. Eucalipto, 33
City: Madrid
Location: NBA
GLA: 19,893 sqm
19. Josefa Valcárcel, 48
City: Madrid
Location: CBD
GLA: 7,368 sqm
17. Eucalipto, 25
City: Madrid
Location: NBA
GLA: 6,615 sqm
20. Arturo Soria, 343
City: Madrid
Location: NBA
GLA: 13,130 sqm
24. Santiago de Compostela, 94
City: Madrid
Location: NBA
GLA: 3,206 sqm
21. Arturo Soria, 128
ı 47 ı
Portfolio in detail | Office - Madrid (III)
City: Madrid
Location: NBA
GLA: 37,224 sqm
28. Vía Norte
City: Madrid
Location: NBA
GLA: 5,749 sqm
31. María de Portugal, 3
City: Madrid
Location: NBA
GLA: 6,176 sqm
34. Av. de Burgos, 210
City: Madrid
Location: NBA
GLA: 3,623 sqm
35. Manuel Pombo Angulo, 20
City: Madrid
Location: NBA
GLA: 16,639 sqm
26. Torre Chamartin (WIP)
City: Madrid
Location: NBA
GLA: 17,191 sqm
29. María de Portugal, 9-13
City: Madrid
Location: NBA
GLA: 5,641 sqm
32. María de Portugal, 5
City: Madrid
Location: NBA
GLA: 10,856 sqm
27. Aquamarina
City: Madrid
Location: NBA
GLA: 5,749 sqm
30. María de Portugal, 1
City: Madrid
Location: NBA
GLA: 27,073 sqm
33. Las Tablas
City: Madrid
Location: NBA
GLA: 9,195 sqm
36. Miniparc Alcobendas, I
City: Madrid
Location: Periphery
GLA: 16,000 sqm
25. Costa Brava, 2-4
ı 48 ı
Portfolio in detail | Office - Madrid (IV)
City: Madrid
Location: NBA
GLA: 33,718 sqm
40. Av. de Bruselas, 33
City: Madrid
Location: NBA
GLA: 32,928 sqm
43. Alvento
City: Madrid
Location: NBA
GLA: 39,150 sqm
46. Ribera del Loira, 36-50
City: Madrid
Location: NBA
GLA: 54,960 sqm
47. Ribera del Loira, 60
City: Madrid
Location: NBA
GLA: 9,164 sqm
38. Av. de Bruselas, 24
City: Madrid
Location: Periphery
GLA: 25,210 sqm
41. Av. de Europa, 1
City: Madrid
Location: NBA
GLA: 11,707 sqm
44. Cristalia
City: Madrid
Location: NBA
GLA: 8,895 sqm
39. Av. de Bruselas, 26
City: Madrid
Location: Periphery
GLA: 9,896 sqm
42. Francisco Delgado, 9
City: Madrid
Location: NBA
GLA: 18,400 sqm
45. Trianón
City: Madrid
Location: NBA
GLA: 19,609 sqm
48. Partenón, 12-14
City: Madrid
Location: NBA
GLA: 3,347 sqm
37. Miniparc Alcobendas, II
ı 49 ı
Portfolio in detail | Office - Madrid (V)
City: Madrid
Location: Periphery
GLA: 35,498 sqm
52. Cerro Gamos, 1
City: Madrid
Location: Periphery
GLA: 23,567 sqm
55. Alvia
City: Madrid
Location: Periphery
GLA: 32,665 sqm
56. Euronova
City: Madrid
Location: Periphery
GLA: 3,890 sqm
50. Av. de Aragón, 334
City: Madrid
Location: Periphery
GLA: 7,068 sqm
53. El Plantío
City: Madrid
Location: Periphery
GLA: 52,163 sqm
51. Ática
City: Madrid
Location: Periphery
GLA: 5,972 sqm
54. Copenhague, 4-8
City: Madrid
Location: NBA
GLA: 120,814 sqm(1)
57. Adequa
(1) GLA includes WIP projects in Adequa complex. If excluded, GLA would be 75,928 sqm
City: Madrid
Location: NBA
GLA: 18,343 sqm
49. Partenón, 16-18
ı 50 ı
Portfolio in detail | Office - Barcelona
ı 51 ı
Portfolio in detail | Office - Barcelona prime and CBD
Catedral
Barrio Gótico
Montjuïc Stadium
Parc Ciutadella
Barrio de GraciaSagrada Familia
Camp Nou Stadium
Avenida Diagonal
Diagonal, 605
Vilanova 12 - 14
Paseo de Gracia
Gran V
ia d
e Las
Cort
es C
atal
anas
Rambla de CataluñaBarceloneta
Rond
a de
Dal
t B-2
0
Pza. Mª Cristina
Pza. España
Pza. Cataluña
Pza F. Macia
Diagonal, 199Torre Glories
Diagonal, 458Balmes, 236 - 238
Ronda Litoral B-10
Diagonal Mar
Port Olimpic
Port Barcelona
Diagonal, 514
Parc 22@
Pza. Glories
ı 52 ı
Portfolio in detail | Office - Barcelona (I)
City: Barcelona
Location: CBD
GLA: 14,795 sqm
1. Diagonal, 605
City: Barcelona
Location: CBD
GLA: 4,033 sqm
4. Diagonal, 458
City: Barcelona
Location: CBD
GLA: 9,664 sqm
2. Diagonal, 514
City: Barcelona
Location: CBD
GLA: 5,934 sqm
5. Diagonal, 199
City: Barcelona
Location: CBD
GLA: 6,188 sqm
3. Balmes, 236-238
City: Barcelona
Location: CBD
GLA: 37,614 sqm
6. Diagonal, 211 (Torre Glòries)
City: Barcelona
Location: CBD
GLA: 5,190 sqm
9. Gran Vía Cortes Catalanas, 385
City: Barcelona
Location: NBA
GLA: 14,542 sqm
12. WTC 8
City: Barcelona
Location: Periphery
GLA: 12,901 sqm
10. Citypark Cornella
City: Barcelona
Location: CBD
GLA: 16,494 sqm
8. Vilanova, 12-14
City: Barcelona
Location: NBA
GLA: 14,461 sqm
11. WTC 6
City: Barcelona
Location: NBA
GLA: 31,337 sqm
7. Llull, 283 (Poblenou 22@)
ı 53 ı
Portfolio in detail | Office - Barcelona (II)
City: Barcelona
Location: NBA
GLA: 3,783 sqm
14. Muntadas II
City: Barcelona
Location: NBA
GLA: 11,411 sqm
17. Av. Parc Logistic, 12-20 (PLZFA)
City: Barcelona
Location: NBA
GLA: 15,379 sqm
15. Sant Cugat I
City: Barcelona
Location: NBA
GLA: 10,652 sqm
18. Av. Parc Logistic, 22-26 (PLZFB)
City: Barcelona
Location: NBA
GLA: 10,008 sqm
16. Sant Cugat II
City: Barcelona
Location: NBA
GLA: 24,380 sqm
13. Muntadas I
ı 54 ı
Portfolio in detail | Office - Lisbon
ı 55 ı
Portfolio in detail | Office - Lisbon
City: Lisbon
Location: NBA
GLA: 13,715 sqm
2. Torre Lisboa
City: Lisbon
Location: NBA
GLA: 6,740 sqm
3. Lisboa Expo
City: Lisbon
Location: CBD
GLA: 16,892 sqm
1. Monumental
City: Lisbon
Location: NBA
GLA: 10,310 sqm
4. Central Office
ı 56 ı
Portfolio in detail | Shopping centers
ı 57 ı
Portfolio in detail | Shopping centers (I)
City: A Coruña
GLA: 176,000 sqm
MRL GLA: 100,187 sqm
1. Marineda
City: Madrid
GLA: 6,959 sqm
MRL GLA: 5,974 sqm
2. Arturo Soria
(1) MERLIN owns 50%
City: Madrid
GLA: 33,000 sqm
MRL GLA: 10,876 sqm
3. Centro Oeste
City: Madrid
GLA: 65,890 sqm(1)
4. Tres Aguas
City: Bilbao
GLA: 24,323 sqm
6. Artea
City: Barcelona
GLA: 31,918 sqm
5. Las Arenas
City: Mallorca
GLA: 58,779 sqm
MRL GLA: 26,559 sqm
7. Porto Pi
City: Valencia
GLA: 22,967 sqm
10. El Saler
City: Malaga
GLA: 45,076 sqm
8. Larios
City: Lisboa
GLA: 5,495 sqm
9. Monumental
City: Gandía
GLA: 20,853 sqm
11. La Vital
City: Murcia
GLA: 48,646 sqm
12. Thader
ı 58 ı
Portfolio in detail | Shopping centers (II)
City: Valencia
GLA: 27,466 sqm
MRL GLA: 21,504 sqm
15. Factory Bonaire + Medianas
City: Barcelona
GLA: 32,224 sqm
14. Vilamarina
City: Reus
GLA: 29,013 sqm
13. La Fira
City: Madrid
GLA: 37,165 sqm
17. Opción
City: Madrid
GLA: 10,007 sqm
16. Nassica
ı 59 ı
Portfolio in detail | Logistics - Spain
ı 60 ı
Portfolio in detail | Logistics - Madrid
ı 61 ı
Portfolio in detail | Logistics - Madrid (I)
City: Madrid
GLA: 28,490 sqm
1. Madrid – Coslada
City: Madrid
GLA: 59,891 sqm
4. Madrid – Meco II
City: Guadalajara
GLA: 51,000 sqm
7. Guadalajara – Azuqueca III
City: Guadalajara
GLA: 38,763 sqm
8. Guadalajara – Alovera
City: Madrid
GLA: 36,234 sqm
2. Madrid – Coslada Complex
City: Guadalajara
GLA: 27,995 sqm
5. Guadalajara – Azuqueca I
City: Guadalajara
GLA: 70,134 sqm
9. Guadalajara – Cabanillas I
City: Madrid
GLA: 16,242 sqm
12. Madrid-Getafe
City: Madrid
GLA: 35,285 sqm
3. Madrid – Meco I
City: Guadalajara
GLA: 98,000 sqm
Madrid
Barcelona
Azuqueca Plot
6. Guadalajara – Azuqueca II
City: Guadalajara
GLA: 202,600 sqm
10. Guadalajara – Cabanillas Park I
City: Guadalajara
GLA: 210,678 sqm
11. Guadalajara – Cabanillas Park II
ı 62 ı
Portfolio in detail | Logistics - Madrid (II)
City: Madrid
GLA: 11,165 sqm
16. San Fernando - I
City: Madrid
GLA: 70,115 sqm
15. Madrid – Pinto
City: Madrid
GLA: 39,576 sqm
14. Madrid – Getafe (Gavilanes)
City: Madrid
GLA: 11,488 sqm
13. Madrid-Getafe (Los Olivos)
ı 63 ı
Portfolio in detail | Logistics - Barcelona
ı 64 ı
Portfolio in detail | Logistics - Barcelona
City: Barcelona
GLA: 415,907 sqm
1. Barcelona - ZAL Port
City: Barcelona
GLA: 21,508 sqm
6. Barcelona – Castellbisbal
City: Barcelona
GLA: 16,758 sqm
5. Barcelona – Granada Penedés
City: Barcelona
GLA: 131,003 sqm
2. Barcelona – PLZF
City: Barcelona
GLA: 14,911 sqm
3. Barcelona – Lliça del Vall
City: Barcelona
GLA: 16,812 sqm
4. Barcelona – Sant Esteve
ı 65 ı
Portfolio in detail | Logistics - Rest of Spain
City: Zaragoza
GLA: 20,764 sqm
1. Zaragoza – Plaza
City: Vitoria
GLA: 72,717 sqm
4. Vitoria - Jundiz
City: Zaragoza
GLA: 21,579 sqm
2. Zaragoza – Pedrola
City: Sevilla
GLA: 109,724 sqm
5. Sevilla - ZAL Sevilla
City: Valencia
GLA: 26,612 sqm
3. Valencia – Almussafes
City: Lisbon
GLA: 642,540 sqm (buildable)
6. Lisbon - Lisbon Land
ı 66 ı
Portfolio in detail | High Street Retail
Branches
Plaza de los Cubos
Fnac Callao
Torre Madrid
Supermarkets
ı 67 ı
Portfolio in detail | High Street Retail
Location: Spain
GLA: 366,601 sqm
Branches
Location: Madrid
GLA: 4,393 sqm
Torre Madrid
Location: Cataluña
GLA: 64,252 sqm
Supermarkets
Location: Madrid
GLA: 13,479 sqm
Plaza de los Cubos
Location: Madrid
GLA: 11,629 sqm
Callao, 5
Paseo de la Castellana, 257
28046 Madrid
+34 91 769 19 00
www.merlinproperties.com
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