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The magnitude of what we have achieved
is remarkable but so are the challenges we
now face. The integration of Testa and Merlin
Properties has been completed in record
time; an exemplary merger that enhances
the best of both companies, successfully
managing to bring together a team and a
corporate structure that is working at full
capacity. We have taken important measures
to combine an exceptional array of assets,
thus creating a diversified portfolio located
in the most attractive areas of the market.
Merlin Properties is currently the leading
operator in logistic facilities, offices and high
street retail. Beyond our leadership in rental
activity or property space, it is the diverse
range of assets that allows us the capacity
to be versatile and flexible with our clients,
granting us the ability to offer comprehensive
solutions to current and future tenants.
These assets possess great value and it
is our job to extract this value. We are
implementing the appropriate measures
required to optimise the value of our portfolio
by renovating and improving many of our
buildings, logistic facilities and shopping
centres over the medium term. We are
convinced that the quality of the assets is
intimately linked to their liquidity and future
profitability.
The logistic facilities business has been
of great importance to us from the onset.
E-commerce penetration, although still quite
low, is significantly on the increase in Spain in
relation to traditional retail and we observe a
growing tendency in companies to outsource
the logistics’ chain to specialised service
providers. That was our initial proposition and
it appears to be paying off. We are currently
the number one owner of logistic warehouses
in Spain, with facilities in all the main
corridors in the country and our assets are
equipped with the technical specifications
demanded by the most important operators
in the market.
We do not lose sight of the challenge, or
rather, the need to optimise our corporate
management model, whose sole aim is to
maximise the return to our shareholders.
We reaffirm our commitment to develop
and redefine, as far as possible, the model
we created through the selection of quality
assets, cautious and secure financing,
highly rated tenants, and a highly efficient
management structure that generates
predictable cash flows in the long term.
Standard & Poor’s, the world’s most
important credit rating company, has valued
all these unique characteristics of Merlin
Properties, assigning a preliminary BBB
rating. It is the highest rating obtained by a
real estate company in Spain and, above all,
validates the sustainability, consistency and
strength of our business model.
We have immediate challenges. Meeting
them successfully depends on our efforts and
skills but, not completely. We also depend
on a political, economic and regulatory
environment that provides security and
stability. Much of our uncertainty lies there.
“The magnitude of what we have
achieved is remarkable but so are
the challenges we now face”.
Ismael Clemente
Executive Chairman