Spain's Merlin buys €103m Lisbon assets at 6.5% yield

Spanish REIT Merlin Properties has expanded its presence in Portugal with the purchase of two properties located in Lisbon.

Merlin is forking out a total of €103 mln in cash for the Monumental building and the Torres de Lisboa office tower, representing a 7.4% gross yield and a 6.5% net initial yield.

Located in the heart of the financial district in Duque de Saldanha square, the Monumental building is a retail and office property with 22,387 m2 of gross lettable space. The office component of 16,892 m2 is current 89%-leased to several companies including KPMG, Marsh and Mercer. The retail space counts 41 retail units and is 98%-occupied.

Merlin plans to completely refurbish the property, which was originally built in 1993.

The tower comprises 13,715 m2 of office space over 16 storeys currently fully let to the multinational energy company Galp. It is part of the Torres de Lisboa business park that comprises seven office building and one hospital, over 70,000 m2 and 1,683 parking units.

With this transaction, Merlin increases its Lisbon portfolio to comprise three buildings with 42,842 m2 of gross space and an average occupancy of 95.3%.