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Merlin & Colonial Will Lose More than 11% of their Rental Income, According to Barclays

The British bank estimates that the two Socimis will experience a decrease in gross rental income of between 11% and 15% this year.

Cuatro torres Fuente Merlin
Cuatro Torres in Madrid. The PwC Building (third from the left) is owned by Merlin Properties.

Barclays forecasts a difficult immediate future for the large property owners in Europe due to the crisis caused by the Covid-19 coronavirus. The bank has carried out a study of the large listed real estate companies on the continent and predicts a significant impact on rental income in segments such as hotels, student residences and retailers, as well as in offices. In its analysis, the financial institution has reduced its income forecast for the two large Spanish Socimis: Merlin and Colonial.

“We believe Merlin will be impacted by Covid-19, especially in the retail sector,” said Barclays. The financial institution points out that Merlin has already communicated to the market that its rental income will fall by a small proportion, as a result of rent renegotiations with the tenants of commercial premises that are closed and cannot afford to pay. For this reason, the bank’s report reflects a decrease in gross rental income this year of 15% as a result of the effects of the coronavirus crisis, although it expects rents to recover by 10% in 2021.


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