Part of the Merlin Prop discount comes from the risk of a tax change with the new government in Spain

Merlin PropertiesMerlin Properties subscribes to 5-yr syndicated loan for 600 million euros

Morgan Stanley | Merlin trades persistently with a discount against its counterparts while offering one of the most interesting return growth profiles (15-20% total return) among those who give a 20% discount.

We understand that part of the discount comes from the risk of a tax change with the new government (something that basically we see of limited impact for the real estate sector in general), the exposure to the retail segment (about ¼ of the total portfolio), the relatively low yield they have, the risk of overhang (22% in the hands of Santander) and the compensation structure of the management team. But this discount is now at record highs. 2020 should be a good year of selling assets that have already advanced that will begin to announce what should give more visibility and transparency and optimize the portfolio.

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.