Merlin Properties, the largest real estate company on the Spanish Stock Exchange, already has the first tenant for its future data centers, a business that it is about to enter (it has obtained a license to build a property of this type in Bilbao ) and that he hopes that in five years it will contribute 15% of his billing. “Our intention is to become market leaders”, said the CEO of the company, Ismael Clemente, at the general meeting of shareholders that was held this Wednesday in Madrid.
The meeting has served to review the plans of the socimi (listed real estate investment company) in this segment of the market that is making its way in Spain. Data centers are ships that house servers where the enormous amount of data required by technology companies is stored, necessary to carry out a successful banking operation or to play a video on streaming platforms. streaming. Merlin’s plans are to develop four centers on the Iberian Peninsula (in addition to the one in Bilbao, another three pending license to be located in the vicinity of Barcelona, Madrid and Lisbon) that will add 70 megawatts of capacity in their first two phases (in these properties, the rents are not based on square meters, but on this measure) and will report about 75 million in rental income. Although in the presentation to the shareholders it is not specified, Clemente has detailed in a subsequent meeting with the press that these objectives are set approximately when the current five-year plan of the company ends; that is, between the end of 2026 and the beginning of 2027.
The real estate agency has been working on these plans for three years, the chief executive has indicated, and despite the fact that it still does not have a center (the construction of the first one is expected to be completed next year) it already has a pre-rental agreement with a tenant. As the data centers are surrounded by great security measures, confidentiality is mandatory and the socimi has only revealed that it is a tenant “of the highest quality”. However, the firm proposes a scalable bet in which the 70 megawatts of the first phases could be expanded up to 236 megawatts in successive expansions of capacity in those same locations.
Socimis with companies whose business comes from the rental of real estate assets. It is a corporate figure that exists in many other countries (internationally known by the acronym REIT) with relatively similar tax advantages. In Spain, they pay corporate tax at a zero rate (that is, they do not pay it) in exchange for distributing 80% of their profit annually in dividends, which does have a fiscal impact on their recipients. In the case of Merlin, its focus is three markets on the Iberian Peninsula (Madrid, Barcelona and Lisbon) and what it rents the most are office buildings (57%), shopping centers (20%) and logistics warehouses (16%). As a result of the flourishing of data centers in its business, by 2026 it expects offices and shopping centers to lose weight in its portfolio (to represent 50% and 15%, respectively), while logistics will grow slightly (to twenty%).
The shareholders’ meeting this Wednesday has also served to ratify the accounts of last year, when the company earned 512 million, and all the points that were put to the vote. These included the company’s new remuneration policy, an issue that in the past generated punishment votes at meetings and anxiety on the board of directors. Last December, the firm faced an unusual crisis in which the main shareholder (Banco Santander) called the emergency council to dismiss Clemente. Although disagreements between the CEO and the president (Javier García-Carranza, appointed at the proposal of Santander) were alleged, sources close to the board also alluded to differences over remuneration.
The crisis ended with unanimous support for the renewal of Clemente and all the directors who were leaving this year and with the development of a new remuneration policy that considerably limits what the two executive directors (Clemente and his right-hand man, Miguel Ollero). These earned last year 6.9 and 6.4 million, respectively. With the new policy, his base salary is set at one million, with variables that in the case of the CEO cannot exceed two million and, in the case of the general operating director, is capped at another million. The shares of the socimi, the only one listed on the Ibex-35 together with Colonial, have lost 1.08% of their value this Wednesday (up to 10.10 euros), in line with the decline that experienced the main Spanish selective (-1.04%).
He knows in depth all the sides of the coin.