Merlin Properties multiplies its profits by 15 times after stabilizing property values | Companies
Merlin Properties increased its net result 15-fold through September to reach €225.4 million compared to the previous year’s third quarter. SOCIMI (a listed real estate investment company) is extending this advantage as the company was still hit by declines in the value of its properties last year. These types of real estate companies record both increases in property valuations and depreciation (which can result in accounting losses even if the business remains stable) on their income statement.
At the business level, Merlin earned 5% more through the third quarter, to 383.6 million. The real estate company received rental income of $373.5 million, up 4.7%. FFO, or free cash flow, the primary metric for companies of this type to gauge future dividend distributions, increased 6.7% to 230.5 million.
The real estate firm said on Tuesday evening that it would assess the impact of PSOE and Sumar’s proposal to remove tax breaks under which Socimis pays no corporate tax. Business sources told the publication that the company was even considering moving its tax residence outside of Spain. This company is engaged in leasing in the office, shopping center, data center and logistics segments and is not part of the residential sector.
The real estate company, whose CEO is Ismael Clemente, earned 2.5% more in office leasing on a like-for-like basis to $203.1 million. In logistics there was an increase of 63.2 million, an increase of 3.2%, in shopping centers – 94.7 million, an increase of 2.3%. In his new data center business, he received his first $1.5 million in leases from technology companies. The company recently built these data centers in Madrid, Barcelona and Alava and started work on a new one in Lisbon.
As part of the first phase data centers, building 60 megawatts (MW) of infrastructure, the real estate company notes the reservation with a major AI operator of a 15 MW block in Barcelona, which is now at 100% capacity. The impact of the entire building on gross rent in 2025 will be 23 million. “Stunningly, this is the largest IT equipment rental contract ever signed in the Iberian Peninsula and the only data center entirely dedicated to artificial intelligence in Spain and Portugal to date,” the Ibex 35-listed company said .
According to the company, Merlin office occupancy remains stable, increasing slightly, with it expected to exceed an all-time high later in the year, exceeding 93% occupancy. In addition, the real estate company celebrates the implementation of the comprehensive redevelopment of Asca, with the signing of an agreement by all major property owners in the area and the Madrid City Council.
The company also says that at the end of last month it donated one million euros to areas affected by the dana. “In light of the recent tragic events in Valencia, Merlin sought and received council approval to provide a package of financial support to flood victims. The total amount contributed is one million, equivalent to approximately 0.0018 euros per share, and will be supplemented by employee donations,” the company said in a press release.
In the logistics sector, the real estate company has signed a preliminary lease agreement with MRL on a turnkey basis for the supply of three logistics warehouses in the Lisbon Logistics Park, covering an area of 134,695 square meters.
Dividend of 18 cents per share.
In addition to announcing the results, Merlin announced a dividend of €0.18 per share. The last date on which the shares will be traded with the option to choose payment is set for November 21, and payment will be made on December 10. The Company remembers that applicable income taxes payable will be deducted from the gross dividend per share, if applicable. “The payment of dividends will be carried out through organizations participating in the Sociedad de Gestión de los Sistemas de Registración, Compensación y Liquidación de Valores, SA (Iberclear), with Banco Santander acting as the paying agent,” the company clarifies.