Download PDF

1. Company Snapshot

1.a. Company Description

MERLIN Properties SOCIMI, SA, one of the main real estate companies listed on the Spanish Stock Exchange (IBEX-35), has as its main activity the acquisition and management of tertiary real estate assets in the Iberian Peninsula.The Company is a public limited company incorporated as a SOCIMI.The main activity of the Company is the acquisition, active management, operation and selective rotation of quality commercial real estate assets in the investment segment “Core” and “Core Plus”, mainly in Spain and, to a lesser extent, in Portugal.


The Company focuses on the office, retail and logistics market.

Show Full description

1.b. Last Insights on MRL

MERLIN Properties SOCIMI's recent performance has been influenced by a Madrid office deal, which may impact its valuation in 2025. The company's steady long-term growth, with a 23% year-to-date increase, is notable. With no direct headline news, investors are reassessing their stance. A recent report highlights the stock's strong return over the past year. Analysts are evaluating the company's prospects, considering factors such as its valuation signals and risk profile. MERLIN Properties' impressive five-year growth of 131.6% underscores its potential.

1.c. Company Highlights

2. Merlin Properties Posts Resilient 2024 Results Despite Operational and Financial Headwinds

Merlin Properties delivered a solid financial performance in 2024, with Funds From Operations (FFO) per share reaching €0.55, down from €0.61 in the prior year. This decline was primarily attributed to a 16.7% dilution effect from a mid-year capital increase, which, however, was partially offset by organic growth. The company maintained its strong financial position, with a loan-to-value (LTV) ratio of 28.3% and a net debt-to-EBITDA ratio of 8.8x. As highlighted by CFO Miguel Ollero, "Our financial position remains robust, with all debt at fixed rates and no maturities until November 2026, providing us with significant flexibility to navigate the current economic landscape."

Publication Date: Mar -07

📋 Highlights
  • Strong Rental Growth and Record Occupancy:: MERLIN Properties reported robust performance across its portfolio, with offices achieving a 3.9% like-for-like rental increase, logistics hitting a historical high of 99.4% occupancy, and shopping centers delivering a 2.7% like-for-like increase with a record-low occupancy cost ratio of 11.2%.
  • Financial Resilience and Capital Management:: The company maintained a strong financial position with an LTV of 28% and no debt maturities until November 2026. FFO was robust, though FFO per share decreased to €0.55 due to dilution from a capital increase, which also boosted interest income and supported valuations.
  • Data Center Expansion and Growth Potential:: MERLIN Properties made significant progress in its data center strategy, with key leases in Barcelona and advanced negotiations for an 18-megawatt lease. The company aims to double cash flow and dividends by 2027, driven by its data center expansion plans.
  • Occupancy Trends and Market Insights:: Overall occupancy reached 96.7%, with logistics and shopping centers near full capacity. Offices saw mixed performance, with Barcelona weakness offset by Madrid's strength. The company highlighted a trend of converting offices to residential, which could tighten supply and boost rents.
  • 2025 Outlook and Challenges:: Guidance for 2025 is flattish, reflecting unknown lease impacts and rising financial expenses. The company expects data center construction to drain resources but remains optimistic about long-term growth, with a proposed dividend of €0.22 per share and a focus on reinvesting capital for future profitability.

Operational Highlights: Strong Occupancy and Strategic Progress

Merlin Properties completed its landmark development plan, including the successful delivery of the Grid building in Madrid. In logistics, the company fully leased its development capacity in Lisbon, while in data centers, it secured a 5-megawatt lease in Barcelona and advanced negotiations for an 18-megawatt lease. These achievements underscore the company's ability to execute on its strategic initiatives despite macroeconomic uncertainties.

Valuation Analysis: Reasonable Valuation with Growth Potential

The company's net asset value (NAV) per share declined to €1,432 from €1,508, primarily due to dilution and impairments, though this was partially offset by gains in data centers. With a strong balance sheet and a focused strategy, Merlin Properties appears well-positioned to navigate the challenges of 2025 and deliver long-term value for shareholders.

3. NewsRoom

Card image cap

Merlin Properties SOCIMI SA (MRPRF) Q3 2025 Earnings Call Highlights: Strong Growth Amidst ...

Nov -19

Source:

Card image cap

MERLIN Properties (BME:MRL): Exploring Valuation Signals After Recent Share Price Swings

Sep -11

Source:

Card image cap

What Recent Madrid Office Deal Means for MERLIN Properties SOCIMI Valuation in 2025

Sep -09

Source:

Card image cap

Merlin Properties SOCIMI SA (MRPRF) Q1 2025 Earnings Call Highlights: Strong FFO Growth Amidst ...

May -15

Source:

Card image cap

The Mayor of Barcelona Jaume Collboni Inaugurates Data Center Hosting CoreWeave's Leading AI Cloud Platform, in Partnership with MERLIN Edged

May -13

Source:

Card image cap

Merlin Properties SOCIMI SA (MRPRF) (Q4 2024) Earnings Call Highlights: Record Occupancy and ...

Mar -01

Source:

Card image cap

Merlin Properties SOCIMI SA (MRPRF) Q3 2024 Earnings Call Highlights: Strong FFO Growth Amidst ...

Nov -16

Source:

Card image cap

Spain's Merlin Properties bets on AI boom to drive revenue growth

Sep -30

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.75%)

6. Segments

Office Buildings

Expected Growth: 8%

MERLIN Properties SOCIMI, S.A.'s 8% growth in Office Buildings is driven by increasing demand for prime office spaces in central business districts, fueled by a growing economy and urbanization. Additionally, the company's strategic focus on renovating and repositioning existing assets, as well as its ability to attract and retain high-quality tenants, contributes to its growth momentum.

Shopping Centres

Expected Growth: 9%

MERLIN Properties SOCIMI's 9% growth in Shopping Centres is driven by increasing foot traffic, strategic location renovations, and a strong tenant mix. Additionally, the company's focus on experiential retail, omnichannel integration, and data-driven marketing strategies have contributed to the segment's growth.

Logistics

Expected Growth: 11%

MERLIN Properties SOCIMI, S.A.'s 11% logistics growth driven by increasing e-commerce demand, strategic location of warehouses, and efficient supply chain management. Additionally, growing demand for cold storage and last-mile delivery solutions, as well as investments in digitalization and automation, contribute to the segment's rapid expansion.

Other

Expected Growth: 7%

MERLIN Properties SOCIMI, S.A.'s 7% growth is driven by increasing demand for logistics and industrial spaces, strategic acquisitions, and a strong focus on ESG initiatives. Additionally, the company's diversified portfolio and solid financial position enable it to capitalize on market opportunities, further fueling growth.

Data Centers

Expected Growth: 12%

MERLIN Properties SOCIMI, S.A.'s 12% growth in Data Centers is driven by increasing demand for cloud computing, big data, and IoT, coupled with the need for secure and efficient data storage. Growing adoption of digital technologies, expansion of 5G networks, and rising importance of data analytics also contribute to this growth.

Corporate Unit

Expected Growth: 8%

MERLIN Properties SOCIMI, S.A.'s Corporate Unit growth of 8% is driven by increasing demand for logistics and industrial spaces, strategic acquisitions, and a strong focus on ESG initiatives. Additionally, the unit benefits from a solid financial position, allowing for investments in value-enhancing projects and a disciplined capital allocation strategy.

7. Detailed Products

Office Buildings

MERLIN Properties SOCIMI, S.A. offers high-quality office spaces for rent, providing companies with modern and flexible work environments.

Logistics and Industrial Properties

The company provides logistics and industrial properties for rent, catering to the needs of companies in the logistics and industrial sectors.

Retail Properties

MERLIN Properties SOCIMI, S.A. offers retail properties for rent, providing retailers with prime locations and modern facilities.

Hotel Properties

The company provides hotel properties for rent, catering to the needs of hotel operators and tourists.

8. MERLIN Properties SOCIMI, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for MERLIN Properties SOCIMI, S.A. is medium due to the presence of alternative investment options in the real estate market.

Bargaining Power Of Customers

The bargaining power of customers is low for MERLIN Properties SOCIMI, S.A. as the company has a diversified portfolio of properties and a strong brand reputation.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for MERLIN Properties SOCIMI, S.A. as the company relies on a network of contractors and suppliers for its development projects.

Threat Of New Entrants

The threat of new entrants is high for MERLIN Properties SOCIMI, S.A. due to the relatively low barriers to entry in the real estate market.

Intensity Of Rivalry

The intensity of rivalry is high for MERLIN Properties SOCIMI, S.A. due to the presence of several established players in the Spanish real estate market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.89%
Debt Cost 3.95%
Equity Weight 59.11%
Equity Cost 10.87%
WACC 8.04%
Leverage 69.18%

11. Quality Control: MERLIN Properties SOCIMI, S.A. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
MERLIN Properties

A-Score: 6.4/10

Value: 5.8

Growth: 4.0

Quality: 6.9

Yield: 6.9

Momentum: 6.5

Volatility: 8.7

1-Year Total Return ->

View Full Report
Stock-Card
LondonMetric Property

A-Score: 6.4/10

Value: 4.5

Growth: 5.7

Quality: 7.3

Yield: 8.8

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
Cofinimmo

A-Score: 6.4/10

Value: 4.8

Growth: 2.3

Quality: 5.9

Yield: 10.0

Momentum: 7.0

Volatility: 8.3

1-Year Total Return ->

View Full Report
Stock-Card
Covivio

A-Score: 5.7/10

Value: 4.0

Growth: 4.2

Quality: 3.9

Yield: 9.4

Momentum: 5.0

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
LandSec

A-Score: 5.7/10

Value: 4.5

Growth: 3.2

Quality: 6.2

Yield: 8.1

Momentum: 4.0

Volatility: 8.3

1-Year Total Return ->

View Full Report
Stock-Card
Unite

A-Score: 5.6/10

Value: 4.5

Growth: 6.3

Quality: 6.2

Yield: 6.9

Momentum: 2.0

Volatility: 7.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

12.4$

Current Price

12.4$

Potential

-0.00%

Expected Cash-Flows