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Merlin will invest around €410M on Operation Chamartín
02 March 2020 | Alicia Navarro

Merlin Properties will invest around 410 million euro on the development of Madrid Nuevo Norte (Madrid New North), formerly known as “Operación Chamartín” (Operation Chamartín).

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Ismael Clemente, CEO, Merlin Properties

Out of this amount, around 240 million euro will be invested in infrastructure and urbanisation, commented Merlin’s CEO, Ismael Clemente, during the presentation of the company’s end of the year results. Merlin intends to invest 49 million euro until 2022 and a little more than 190 million euro after that.

«In order to face this additional capex, the company will retain more funds and sell some non-strategic asset», explained Clemente.

The 169 million euro the REIT invested in the purchase of 14.5% of Company Distrito Castellana Norte (DCN) from construction company San José should be added to this amount.

On the other hand, Merlin reported its annual revenues, with a profit of 563.6 million euro (1.2 euro per share), which was below the previous year’s results. Regardless, the company recalls that 2018 «had an extraordinary result due to the sale of Testa Residencial». Thus, excluding the extraordinary transactions, the ordinary net profit reached 212.5 million euro, a 3.6% yoy increase.

Merlin also announced the closing of an operation through which it transferred three assets (Thader, La Fura and a store in Nassica) to REIT Silicius. The transaction was carried out using the NAV and Merlin received around 34.4% of Silicius’ shares for the three assets.

Analysing by segments, in terms of the office segment, Merlin considered 2019 «an excellent year in terms of occupancy», by increasing 264 base points, reaching 92.8%. The release spread reached excellent numbers, with average increases of 7.2%. By markets, the increase reached 6% in Madrid, 19.5% in Barcelona and 11.2% in Lisbon.

The REIT highlights a 5.9% increase in the GAV (Gross Asset Value), reaching 12.751 million euro, compared to the 12.041 million of the previous year.