Merlin Properties wrapped up 2022 with notable momentum, a sentiment echoed by its chief executive, Ismael Clemente, who described the year as “extraordinary.” The company, a socimi listed on the Ibex-35, reported rental income reaching 452.8 million euros, representing a 7.3% rise from 2021. This figure excludes the contribution from BBVA branches, which were sold to the bank for 1.987 billion euros in June, marking the largest real estate transaction of the year in Spain.
Operating profit stood at 290 million euros, not accounting for changes in the real estate portfolio’s value, and the year saw a 1.5% decline in performance due to higher interest rates and stronger return expectations from asset holders. The CEO noted that the 40-basis-point value decrease was offset by rent increases, while net profit reached 263 million euros, about half of the previous year’s level. These outcomes align with Merlin’s cautious stance amid rate hikes and market volatility, as outlined in the annual results presentation. (Merlin Properties Annual Report 2022)
What will unfold in 2023
The company laid out a growth plan that centers on disciplined investment and portfolio resilience. It aims to allocate between 300 and 350 million euros for 2023, with approximately 200 million earmarked for a data center program. This initiative involves the construction and development of four data center properties across Spain and Portugal, reinforcing Merlin’s exposure to the growing data and digital infrastructure sector. The remaining funds are planned for logistics projects and a potential corporate contribution of close to 30 million euros to Crea Madrid Nuevo Norte, an Adif-backed venture that will acquire the former Operation Chamartín site.
Throughout the year, Merlin anticipates a conservative approach to divestitures, citing unfavorable market conditions. The focus will be on maintaining recovery rates across assets and avoiding disruptions to asset performance, a strategy reminiscent of the Covid-19 period when stability in occupancy and rent collection was prioritized. In parallel, Merlin has shown openness to opportunities in the market, including the potential acquisition of commercial space from El Corte Inglés that could be managed within Merlin’s portfolio, such as the Marineda City Mall in A Coruña. (Merlin Properties Strategic Update 2023)