Merlin to join Lisbon stock market next year

The Spanish property giant Merlin Properties is to join Lisbon Stock Market’s PSI-20 in March next year in a €6Bn capitalisation.

If it does so, it will become the fifth largest company to operate in the stock market according to João Cristina who heads Merlin in Portugal, adding that its entry date would largely depend on a fine tooth comb analysis by the PSI-20 committee.
The move comes at a propitious time in the Lisbon and Porto office market — an area in which Merlin specialises — due to the current lack of offer in the offices market in Portugal.
However, in the overall non-commercial property market the Belgian real estate investor Kandiyoti has predicted “boom going to bust” in Lisbon after real estate prices for residential have soared 66% since the first quarter of 2016, overtaking salary growth and leading for calls to the government to take measures to see that house prices are compatible with the pockets of local Portuguese residents.
Nevertheless, Merlin, a commercial property player, had indicated its intention to join the stock market earlier this year in order to have a greater visibility in the Portuguese market.
The decision will likely be decided at the next annual review of the PSI-20 when the committee will decide if Merlin fulfils the necessary requirements to join the stock market.
General rules state that a company must have at least €100 million in free float market capitalisation and a minimum of 15% free float.
As a newly listed company in Lisbon it would also have to have a minimum of 20 negotiated sessions.
“The operation will be a pure dual listing since there would be a listing of the same shares listed on the Spanish stock market.
If it goes ahead, it means that Portuguese investors will be able to acquire Merlin shares on the Portuguese stock market.
“If or entry is approved and given that we would have around €6Bn in capitalisation, we would hold the fifth place in terms of the largest companies listed in Portugal” says João Cristina.
The top companies in terms of capitalisation floating shares on the Lisbon stock market are EDP (€12Bn), Galp (€10Bn), Jerónimo Martins (€9Bn), EDPR (€8Bn) and BCP (€3Bn).
Currently, the only dual listing company on the stock market in Portugal is Euronext – the company that manages stock markets, including Portugal’s and which is listed in all of its markets.
In March this year Merlin Properties announced that it had around €1Bn to invest in Portugal where it has already purchased around a dozen assets.
But the REIT (Real Estate Investment Fund) is preparing to increase its exposure in the Portuguese market to at least €2Bn which would make it the No1 player in Portugal In the offices segment of the property market — the area in which it most intends to invest.