trending Market Intelligence /marketintelligence/en/news-insights/trending/uxhhwozqpxndwsd3pugdww2 content esgSubNav
In This List

Merlin Properties sees 'sun, moon and stars all aligned' in logistics market

Blog

Using ESG Analysis to Support a Sustainable Future

Video

S&P Capital IQ Pro | Powered by Expert Insights

Blog

Q&A: Streamlining Analytics for TCFD Reporting

Blog

Evergrande and the wider impact: a sentiment analytics based perspective


Merlin Properties sees 'sun, moon and stars all aligned' in logistics market

Logistics properties were the "star performer" in 2017 for Spanish real estate investment trust MERLIN Properties, leading the company's management to reaffirm its aim to take its logistics holdings to a fifth of its portfolio.

The company's logistics assets recorded 8.4% like-for-like valuation growth in 2017, the largest increase among MERLIN's diversified portfolio, which also includes office, high street retail and shopping centers.

The growth of e-commerce in Spain is driving performance in the sector, with 22% of the company's like-for-like growth attributable to online retail, according to Chief Investment Officer David Brush, speaking during a full-year earnings call. Third-party logistics also made a significant contribution, he added.

"The sun, the moon and the stars are all aligned when you look at the logistics market. And that's produced very, very strong performance," said Brush.

MERLIN regrets not investing more in logistics assets in recent years, given the success of the sector, CEO and Vice Chairman Ismael Clemente said. "Logistics is a success story. We only wish we had bought more in 2015 and 2016, but we only bought what we bought."

MERLIN is spending €213 million on various logistics developments throughout Spain, expecting an additional €25 million in rent from these ongoing projects, Clemente said.

Clemente reaffirmed the company's aim to make logistics assets 20% of its total portfolio. Logistics currently makes up 13% of the company's portfolio value, up from 5% in 2013, Brush said.

The company's focus for investment in 2018 is Portugal, where MERLIN aims to become "one of the leading office and logistics players and also gain some prime retail presence," said Clemente.

MERLIN's result for fiscal year 2017 showed profit attributable to shareholders of the parent company of €1.10 billion, a gain of 89% from €582.6 million in 2016. Earnings per share for the full year amounted to €2.35, an increase of 45% from €1.62 per share a year earlier.

For the full year 2018, the company expects to distribute at least 50 cents per share in two installments in October 2018 and May 2019.