Intermoney| Merlin Properties (MRL) (Buy, Target Price €12/share) has contracted with two US investment banks for a capital increase of up to €1 billion, which it expects to be completed before the end of this year, according to Cinco Días. The REIT expects the funds to be used for the start-up of data centres, its current main avenue for growth. Merlin expects a large part of the capital increase to be subscribed by a partner, which could be a sovereign wealth fund or a pension fund, always with a conservative profile.
Assessment: This move by Merlin comes as no surprise, as there has been talk since the middle of last year of the REIT’s willingness to turn to a partner for its investment in datacenters. It currently has 3MW in service, which, it is estimated, can generate around €3 million in annual revenues.
Among its most immediate plans is to increase this figure to 60MW, involving an investment of around €600Mn by 2025-26. The €1bn capital increase, together with a debt increase of a similar amount, would finance a second phase of growth to a total of 260MW, bringing this asset class to more than 15% of Merlin’s GAV in the long term.
