Trade the Merlin Properties share!
MERLIN PROPERTIES

Analysis before buying or selling Merlin Properties shares

Trade the Merlin Properties share!
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Before you start trading Merlin Properties shares, you should of course learn more about the stock and the company. In this article, we offer you the opportunity to discover the information that will be useful for your analysis of this stock. In particular, we will present you in detail the activities and sources of revenue of this company, its main competitors on the market or its recent partnerships. Of course, we will also show you how you can perform a quality fundamental analysis on this stock to maximize your chances of detecting its future trends.

Elements to consider before selling or buying Merlin Properties shares

Analysis N°1

First of all, it is important to follow the real estate market as a whole. In this respect, several indicators are available to help you in this analysis and will allow you to know if this market is doing well or not.

Analysis N°2

The same applies to the commercial property market, which is largely dependent on the overall economic situation in the countries in which the Merlin Properties group operates. Strong activity will tend to boost the group's activities and vice versa in the case of weak activity.

Analysis N°3

Naturally, we will closely monitor new investments and acquisitions or participations of this group in new premises, buildings or companies, which will often be followed, in the more or less long term, by new sources of profit.

Analysis N°4

It will also be necessary to keep an eye on the possible partnerships that the group is likely to set up with other companies or groups in similar or complementary sectors.

Analysis N°5

Finally, we will also follow the financial and economic results of this group. These results are published annually and also quarterly in the income statements and are available free of charge online. We will take care here to compare the results actually recorded in terms of turnover, net income or operating margin with the objectives that the group has set itself but also with the expectations of analysts.

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General presentation of Merlin Properties

It is obvious that a good knowledge of Merlin Properties is essential if you want to speculate on this stock with a good basis. That is why we are now offering you a detailed presentation of this group with data on its activities and its main sources of income.

The Merlin Properties group SOCIMI SA is a Spanish company specialised in real estate investment. Specifically, it is a SIIC or a Real Estate Investment Company listed on the Stock Exchange. As such, it buys, actively manages, invests in and selectively rotates commercial property assets in Spain and Portugal. However, it is mainly in Spain that the group generates its revenues, with almost 91% of its rents collected at national level. Portugal generates only 9% of rental income.

To better understand the activities of the Merlin Properties group, it is possible to break them down into different types of assets according to the share of income they generate and in this way:

  • Rental income from offices represents 46.5% of the group's total rental income.
  • Revenues from shopping centres represent 23.8% of total revenues.
  • Next comes net rental income, which represents 16.9% of total rental income.
  • The logistics sites generate 10.1% of the group's rental income.
  • Finally, the remaining 2.8% of the revenue comes from ancillary rental activities.

Currently, or in 2020, Merlin Properties' portfolio of assets is worth €12.2 billion and generates over €500 million in rental income each year.

It is also important to mention that the company aims to remunerate its shareholders through a combination of an annual dividend distribution and the valuation of the company's EPRA NAV.

Analysis before buying or selling Merlin Properties shares
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The major competitors of Merlin Properties

Let us now take a moment to look at the main competitors of the Merlin Properties group in its sector of activity. Indeed, the group faces relatively strong international competition and some players in this field are likely to take market share.

Grand City Properties SA

This residential real estate company is based in Luxembourg and invests in value-added residential opportunities in the largest cities and metropolitan areas in Germany. The group currently owns over 84,000 apartments and is one of the largest real estate companies in Europe.

Covivio

This other real estate company is French and was formerly known as Foncière des Régions. The group's activities are divided between office, residential and hotel real estate with an estimated asset base of nearly €23 billion. The company was established in 2018 and thus owns offices in France and Italy following its merger with its subsidiary Beni Stabilli, residential in Germany through its subsidiary Covivio Immobilien formerly known as Immeo Wohnen, hotels in Europe with the subsidiary Covivio Hotels and which is the European leader in this sector and Wellio which is a company dedicated to flexible office and coworking.

Josh DeShong Real Estate

This other real estate company is also one of the world's leaders in this sector and has been in the market for some 60 years. Thanks to a solid marketing plan, the group sells houses but also manages rental property, a segment in which it is currently diversifying, particularly in Europe.


The major partners of Merlin Properties

As we have just seen, the Merlin Properties group has several major competitors in its industry. But it is also frequent that this group sets up strategic partnerships with other entities in order to boost its growth. We propose you to discover here some concrete examples of partnerships of this type that the company set up during the last years and which will help you to understand the interest of this type of alliance.

Fifth Wall

For many years, the Merlin Properties Group has worked with, among others, the US-based Fifth Wall, which is the world's largest venture capital firm focused on technology solutions for the real estate industry. It has nearly $1 billion in capital under management across three funds and connects major property owners and operators to the technology entrepreneurs who are redefining the future of the physical environment. Merlin Properties is among the many sponsors of this venture such as British Land, CBRE, Cushman & Wakefield, Gecina, MetLife Investment, Prologis, SEGRO, Lennar and many others. Merlin Properties is therefore positioning itself as an important client and partner in the global built asset ecosystem, which is changing the game for investments and partnerships in the most promising portfolio companies focused on retail, residential, multi-family, commercial, industrial and hospitality, among others.

Crédit Agricole CIB

Another interesting partnership for Merlin Properties is with Crédit Agricole. Thanks to this partnership, the Spanish group was able to complete the largest ESG transaction ever carried out in the European real estate sector. Merlin Properties is committed to environmentally friendly initiatives within its portfolio, including major investments in energy efficiency and improvement and certification of its assets with LEED/BREEAM for energy and AIS for disabled access. Crédit Agricole has, around this pillar, conducted with Merlin Properties the largest ESG indexed loan ever made by a European real estate investment fund.

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Frequently Asked Questions

When and how was the Merlin Properties group created?

Merlin Properties Group is a Spanish listed real estate investment company that was founded in 2014 by former Deutsche Bank executives. In order to grow following its creation, the company then received support from investment funds such as BlackRock, Principal Financial, Marketfield and Invesco which allowed it to purchase over 1,000 branches from BBVA. Later on, the group will also acquire the asset management division of Sacyr Vallehermosso and Metrovacesa.

On which stock exchange and stock index is Merlin Properties listed?

Merlin Properties' share price is of course quoted on the Spanish stock market. Specifically, it has a real time and continuous quotation on the Mercado Continuo of the Madrid Stock Exchange. Moreover, it is interesting to note that this company is also part of the composition of the Ibex 35 benchmark stock market index, which includes the 35 largest capitalizations in Spain.

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