Derivative financial instruments (Note 14.3)
Embedded derivatives (Note 10)
Financial results at fair value with changes in profit and loss
(Note 10)
corporate purpose. The remainder of these profits must be reinvested in other property or
investments used for the pursuit of said activity within three years after the transfer date.
Otherwise these profits should be distributed in full together with any profit arising in the year
in which the reinvestment period expires. If the items to be reinvested are transferred prior to
the end of the holding period, that profit must be distributed in full together with, if applicable,
the profit generated during the year in which the items were transferred. The obligation to
distribute profit does not apply to the portion of the profit attributable to prior years in which the
Company was not included under the special tax regime established by this statute.
\u2013At least 80% of the remaining profits obtained. When dividend distributions are charged to
reserves generated from profits in a year in which the special tax regime applied, the
distribution must necessarily be approved as set out above.
5.10 Cash and cash equivalents
The Group includes under this heading cash and short-term highly liquid investments maturing in less
than three months that are readily convertible to cash and which are subject to an insignificant risk of
changes in value. The interest income associated with these transactions is recognised as income
when accrued while unmatured interest is presented in the consolidated statement of financial position
as an addition to the balance of the aforementioned heading.
5.11 Provisions
When preparing the consolidated financial statements the Parent\u2019s directors made a distinction
between:
\u2013Provisions: credit balances covering present obligations arising from past events with respect
to which it is probable that an outflow of resources embodying economic benefits that is
uncertain as to its amount and/or timing will be required to settle the obligations; and
\u2013Contingent liabilities: possible obligations that arise from past events and whose existence will
be confirmed only by the occurrence or non-occurrence of one or more future events not
wholly within the Group\u2019s control.
The consolidated financial statements include all the provisions with respect to which it is likely that the
obligation will have to be settled. Contingent liabilities are not recognised in the consolidated financial
statements but rather are disclosed in the notes to the consolidated financial statements, unless the
possibility of an outflow in settlement is considered to be remote.
Provisions are measured at the present value of the best possible estimate of the amount required to
settle or transfer the obligation, taking into account the information available on the event and its
consequences. Where discounting is used, adjustments made to provisions are recognised as finance
cost on an accrual basis.
The compensation receivable from a third party on settlement of the obligation is recognised as an
asset, provided there is no doubt that the reimbursement will take place, unless there is a legal
relationship whereby a portion of the risk has been externalised, as a result of which the Group is not
liable, in which case, the compensation will be taken into account when estimating the amount of the
related provision.
5.12 Revenue recognition
Revenue and expenses are recognised on an accrual basis, i.e. when the actual flow of the related
goods and services occurs, regardless of when the resulting monetary or financial flow arises. Rental
income is measured at the fair value of the consideration received, net of discounts and taxes.
Discounts (rent waivers and rebates) granted to lessees are recognised as a reduction in rental
income when it is probable that conditions precedent will be fulfilled requiring them to be granted.
Discounts are recognised by expensing the total rent waiver or rebate on a straight-line basis over the
term of the lease agreement in force. If a lease agreement is cancelled earlier than expected, any
outstanding rent waiver or rebate is recognised in the last period prior to the end of the agreement.
Leasing of investment property to third parties
The Group companies\u2019 principal activity comprises the acquisition and leasing of primarily shopping
malls, logistics units and offices. The Group\u2019s ordinary income is generated from the leasing of this
investment property to third parties.
Ordinary income from the leasing of investment property is recognised taking into account the stage of
completion of the transaction at the reporting date, provided the result of the transaction can be
reliably estimated. Income from the Group\u2019s leases is recognised by Group companies on a monthly
basis pursuant to the terms and amounts agreed with the tenants in the various leases. This income is
only recognised when it can be measured reliably and it is probable that the economic benefits from
the lease will be received.
Where the outcome of services rendered cannot be measured reliably, revenue is recognised to the
extent that the expenses incurred are deemed recoverable.
Service charges rebilled to tenants are recognised net of other operating expenses.
5.13 Income tax
5.13.1 General regime
Tax expense (tax income) comprises current tax expense (current tax income) and deferred tax
expense (deferred tax income).
The current income tax expense is the amount payable by the Group as a result of income tax
settlements for a given year. Tax credits and other tax benefits, excluding tax withholdings and pre-
payments, and tax loss carryforwards from prior years effectively offset in the current year reduce the
current income tax expense.
The deferred tax expense or income relates to the recognition and derecognition of deferred tax
assets and liabilities. These include temporary differences measured at the amount expected to be
payable or recoverable on differences between the carrying amounts of assets and liabilities and their
tax bases, and tax loss and tax credit carryforwards. These amounts are measured at the tax rates
that are expected to apply in the period when the asset is realised or the liability is settled.
Deferred tax liabilities are recognised for all taxable temporary differences, unless the temporary
difference arises from the initial recognition of goodwill, goodwill for which amortisation is not
deductible for tax purposes or the initial recognition of other assets and liabilities in a transaction that
affects neither accounting profit (loss) nor taxable profit (tax loss).
Deferred tax assets are recognised for temporary differences to the extent that it is considered
probable that the consolidated companies will have sufficient taxable profits in the future against which
the deferred tax asset can be utilised, and the deferred tax assets do not arise from the initial
recognition of other assets and liabilities in a transaction that affects neither accounting profit (loss) nor
taxable profit (tax loss). The other deferred tax assets (tax loss, temporary differences and tax credit
carryforwards) are only recognised if it is considered probable that the consolidated companies will
have sufficient future taxable profits against which they can be utilised.
The deferred tax assets recognised are reassessed at the end of each reporting period and the
appropriate adjustments are made to the extent that there are doubts as to their future recoverability.
Also, unrecognised deferred tax assets are reassessed at the end of each reporting period and are
recognised to the extent that it has become probable that they will be recovered through future taxable
profits.
5.13.2 REIT regime
The REIT special tax regime, as amended by Law 16/2012 of 27 December, is based on a 0%
corporation tax rate, provided certain requirements are met. Particularly noteworthy amongst those
conditions is that at least 80% of income must come from urban real estate used for leasing purposes
and acquired in full ownership or through holdings in Spanish or foreign companies, regardless of
whether or not they are listed on organised markets, that meet the same investment and profit
distribution requirements. Likewise, the main sources of income for these entities must come from the
real estate market, either through leasing the properties, their subsequent sale after a minimum lease
period, or the income generated from holdings in entities with similar characteristics. Nevertheless, tax
is accrued in proportion to dividend distributions. Dividends received by the shareholders are exempt,
unless the recipient is a legal person subject to corporation tax or a permanent establishment of a
foreign entity, in which case a deduction in the tax liability is established, so that these earnings are
taxed at the shareholder\u2019s rate. However, the remaining earnings will not be taxed so long as they are
not distributed to shareholders.
As established in Transitional Provision Nine of Law 11/2009, of 26 October, amended by REIT Act
2012, the entity will be subject to a special tax rate of 19% on the total dividends or profit shares
distributed to unitholders with a shareholding in the entity of 5% or more, when these dividends are
exempt or taxed at a rate below 10% in the unitholders. The Group has therefore established the
procedure guaranteeing confirmation by shareholders of their tax rate, proceeding where applicable,
to withhold 19% of the dividend distributed to shareholders that do not meet the aforementioned tax
requirements.\u00a0 \u00a0 \u00a0 \u00a0
With effect for the years beginning on or after 1 January 2021, the Spanish Measures to Prevent and
Combat Tax Fraud Act 11/2021 of 9 July [Ley de medidas de prevenci\u00f3n y lucha contra el fraude
fiscal] amended section 9(4) of REIT Act 2009 [Ley de las Sociedades An\u00f3nimas Cotizadas de
Inversi\u00f3n en el Mercado Inmobiliario]. Specifically, a special tax of 15% was introduced on the amount
of profit obtained in the year that is not distributed, in the part that comes from: (a) income not taxed at
the general tax rate of income tax and; (b) income not from the transfer of eligible assets, once the
three-year maintenance period has elapsed, which has been included in the three-year reinvestment
period stipulated in section 6(1)(b) of Law 16/2012, of 27 December. This special tax will be
considered income tax and will accrue on the day of the resolution to apply profit for the year by the
General Shareholders Meeting or equivalent body. The tax must be self-assessed and paid within two
months of its accrual.
5.14 Share-based payments
The Parent recognises, on the one hand, the goods and services received as an asset or as an
expense, depending on their nature, when they are received and, on the other, the related increase in
equity, if the transaction is equity-settled, or the related liability if the transaction is settled with an
amount based on the value of the equity instruments.
In the case of equity-settled transactions, both the services rendered and the increase in equity are
measured at the fair value of the equity instruments granted, by reference to the grant date. In the
case of cash-settled share-based payments, the goods and services received and the related liability
are recognised at the fair value of the latter, by reference to the date on which the requirements for
recognition are met.
Additionally, the General Meeting held on 26 April 2017 approved a remuneration plan for the
management team and other important members of the Group\u2019s workforce (which includes, inter alia,
the Executive Directors and Senior Management), the measurement period of which was from 1
January 2017 to 31 December 2019 (the \u201c2017-19 Incentive Plan\u201d). In accordance with that plan, the
beneficiaries may be entitled to receive (i) a certain monetary amount based on the increase in the
share price; and (ii) shares in the Parent, provided that certain objectives are met.
Vesting of the incentive will independently be conditional upon the total rate of return obtained by the
shareholder during the three-year period due to:
\u2013an increase in the Parent\u2019s share price plus the dividends distributed by the Company to
shareholders during the measurement period; and
\u2013an increase in the Parent\u2019s EPRA NAV plus the dividends distributed by the Company to
shareholders during the measurement period;
For the right to the share-based incentive and to the EPRA NAV-based incentive to be vested, the total
shareholder rate of return (TSR) must be at least 24%, as detailed below:
TSR NAV rate / TSR rate
Share price
Percentage assigned to beneficiaries
(\u201cPR\u201d)
Percentage assigned to shareholders
To calculate the TSR, (i) the percentage assigned to the Beneficiaries in accordance with the above
table will be applied to the result of multiplying the Share Price TSR multiplied by the number of
Shares of the Company as of 31 December 2019; (ii) the result of that transaction will be balanced
through an adjustment mechanism in favour of the Beneficiaries, as, once a minimum return is
reached, the Beneficiaries will be entitled to the assigned percentage of the total return generated
from the start.
The date for calculating the amount of the incentive tied to the EPRA NAV per share and the amount
of the incentive tied to the quoted price of the shares was 31 December 2019. The maximum amount
to be received for the incentive tied to the share price from 2017 to 2019 amounted to EUR 37.5
million, which was paid out in 2020.
Also, the maximum amount of the incentive tied to EPRA NAV per share will be EUR 75 million and a
maximum of 6,000,000 shares have been allocated for its payment. At 31 December 2019, there were
5,874,111 shares that were ultimately allocated to the incentive benchmarked to the EPRA NAV. 50%
of the allocated shares will be paid out on the second settlement date, i.e., on the second business
day after the formulation of the 2020 annual financial statements. The remaining 50% of the allocated
shares will be paid out on the third settlement date, i.e., on the second business day after the
formulation of the 2021 annual financial statements.
In this regard, as of 31 December 2021, the Group has recorded an expense of EUR 8,758 thousand
corresponding to the portion accrued for the LTIP 2017-2019 against reserves.
5.15 Obligations to employees
Under current labour legislation, the Group companies are required to pay termination benefits to
employees terminated under certain conditions.
When a restructuring plan is approved by the directors, made public and communicated to employees,
the Group recognises the provisions required to meet any future payments resulting from their
application. These provisions are calculated in accordance with the best estimates available of the
foreseeable costs.
In this sense, at 31 December 2021, the Group does not have commitments for this item, and there is
no Downsizing Plan in force.
5.16 Current assets and liabilities
The Group classifies its assets and liabilities as current and non-current in the consolidated statement
of financial position. To this end, current assets and current liabilities are those that meet the following
criteria:
\u2013Assets are classified as current when they are expected to be realised, or are intended for
sale or consumption, during the course of the Group\u2019s normal operating cycle, when they are
held primarily for the purpose of being traded, when they are expected to be realised within
twelve months after the reporting date, or when they constitute cash or a cash equivalent,
unless they are restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting date.
\u2013Liabilities are classified as current when they are expected to be settled during the course of
the Group\u2019s normal operating cycle, when they are held primarily for the purpose of being
traded, when they are expected to be settled within twelve months after the reporting date, or
when the Group does not have an unconditional right to defer repayment of the liability for at
least twelve months after the reporting date.
\u2013Derivative financial instruments not held for trading are classified as current or non-current
according to the period of maturity or periodic settlement.
5.17 Segment information
The Group groups its segments based on the nature of the assets in the various areas in which it
implements its strategy. In this sense, each operating segment is a component of the Group that
performs business activities from which it can earn revenue and incur expenses. The operating results
of each segment are regularly reviewed by the Group's management to decide on the resources to be
allocated to each segment, assess its performance and for which differentiated financial information is
available.
5.18 Earnings per share
Basic earnings per share are calculated by dividing net profit or loss attributable to the Parent\u2019s
shareholders by the weighted average number of ordinary shares outstanding during the year,
excluding the average number of shares of the Parent held by the Group companies.
For the calculation of the diluted profit per share, the Group calculates the amounts of the diluted
earnings per share for the profit for the year attributable to the shareholders of the Parent and, where
applicable, the profit for the year of the ongoing activities attributable to those holders of equity
instruments.
To calculate the diluted earnings per share, the Group takes the profit or loss for the year attributable
to the holders of ordinary equity instruments and the weighted average number of shares in circulation
for all the dilutive effects inherent to the potential ordinary shares.
5.19 Environment
The Group carries out activities whose primary purpose is to prevent, mitigate or repair environmental
damage caused by its operations. See climate change management policies in Note 23.
Expenses incurred in connection with these environmental activities are recognised as other operating
expenses in the year in which they are incurred. However, because of their nature, the Group\u2019s
business activities do not have a significant environmental impact.
5.20 Consolidated statements of cash flows
The following terms are used in the consolidated statements of cash flows (prepared using the indirect
method) with the meanings specified:
1.Cash flows: inflows and outflows of cash and cash equivalents, which are short-term, highly
liquid investments that are subject to an insignificant risk of changes in value.
2.Operating activities: the principal revenue-producing activities of the entities composing the
consolidated Group and other activities that are not investing or financing activities.
3.Investing activities: the acquisition and disposal of long-term assets and other investments not
included in cash and cash equivalents.
4.Financing activities: activities that result in changes in the size and composition of the equity
and liabilities that are not operating activities.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjMxOGEwZjhkNjcyYjRkNmY4ZTczNmY4NDZjMzEyYTQ2L3NlYzozMThhMGY4ZDY3MmI0ZDZmOGU3MzZmODQ2YzMxMmE0Nl80Ni9mcmFnOjQ0ZTcwY2UwODUwZDQ4ZWQ4NDY0M2YxMWU3ZmM0MzlkL3RleHRyZWdpb246NDRlNzBjZTA4NTBkNDhlZDg0NjQzZjExZTdmYzQzOWRfOTg5NTYwNDY1MzU2NA_98890d83-3108-48e1-8ae2-8df7099d39ea": {
"value": "
6.\u00a0 \u00a0 Segment reporting
a.Basis of segmentation
The Group's management has segmented its activities into the business segments detailed below
according to the type of assets acquired and managed:
\u2013Office buildings.
\u2013Net leases:
Portfolio of assets (bank branches and stand-alone buildings) leased to BBVA. Until the sale of 32
supermarkets in 2021, this segment also included these assets (see Note 7).
\u2013Shopping centres.
\u2013Logistics assets.
\u2013Other.
Assets not included in the above segments, which mainly correspond to three hotels, non-strategic
land and other smaller assets.
32
Any revenue or expense that cannot be attributed to a specific line of business or relate to the entire
Group are attributed to the Parent as a \u201cCorporate unit/Other\u201d, as are the reconciling items arising
from the reconciliation of the result of integrating the financial statements of the various lines of
business (prepared using a management approach) and the Group\u2019s consolidated financial
statements.
The profits of each segment, and each asset within each segment, are used to measure performance
as the Group considers this information to be the most relevant when evaluating the segments\u2019 results
compared to other groups operating in the same businesses.
The Group carried out its business activities in Spain and Portugal in the year ended 31 December
2021.
b.Basis and methodology for business segment reporting
The segment information below is based on monthly reports prepared by Group management and is
generated using the same computer application that prepares all the Group\u2019s accounting information.
The accounting policies applied to prepare the segment information are the same as those used by
the Group, as described in Note 5.
Segment revenue relates to ordinary revenue directly attributable to the segment plus the relevant
proportion of the Group\u2019s general income that can be allocated on a reasonable basis to that segment.
Ordinary revenue of each segment does not include interest or dividend income, gains on the disposal
of investment property, debt recoveries or cancellation.
Segment expenses are calculated as the directly attributable expenses incurred in the operating
activities, plus the corresponding proportion of the expenses that can be reasonably allocated to the
segment.
The segment profit or loss is presented before any adjustment for non-controlling interests.
Segment assets and liabilities are those directly related to each segment\u2019s operations, plus the assets
and liabilities that can be directly attributed thereto using the aforementioned allocation system, and
include the proportional part of the assets and liabilities of joint ventures.
Segment reporting
Segment information about these businesses at 31 December 2021 is presented below:
Revenue from non-Group customers:
Gains or losses on disposals of non-
current assets
Depreciation and amortisation charge
Changes in fair value of investment
property
Negative goodwill on business
combinations
Profit/(loss) from operations
Changes in the fair value of financial
instruments-
Changes in fair value of financial
instruments - Embedded derivative
Changes in fair value of financial
instruments - Other
Profit/(loss) on disposal of financial
instruments
Share of results of companies accounted
for using the equity method
Profit/(Loss) for the year
Non-current financial assets-
Other current financial assets
Non-current bank borrowings
Other non-current liabilities
Segment information about these businesses at 31 December 2020 is presented below:
Income from services rendered
Gains or losses on disposals of non-current
assets
Depreciation and amortisation charge
Changes in fair value of investment
property
Profit/(loss) from operations
Changes in the fair value of financial
instruments-
Changes in fair value of financial
instruments - Embedded derivative
Changes in fair value of financial
instruments - Other
Profit/(loss) on disposal of financial
instruments
Share of results of companies accounted for
using the equity method
Profit/(Loss) for the year
Non-current financial assets-
Other current financial assets
Non-current bank borrowings and
debenture issues
Other non-current liabilities
c.Geographical segment reporting
For the purposes of geographical segment reporting, segment revenue is grouped according to the
geographical location of the assets. Segment assets are also grouped according to their geographical
location.
The following tables summarises ordinary income and non-current investment property for each of the
assets held by the Group by geographical area:
2021
(a) Also includes the amount of the embedded derivative described in Note 10.
2020
(a) Also includes the amount of the embedded derivative described in Note 10
d.Main customers
The table below lists the most significant tenants as of 31 December 2021, and the primary
characteristics of each of them:
2021
Logistics and shopping centers
PricewaterhouseCoopers, S.L.
2020
Logistics and shopping centers
PricewaterhouseCoopers, S.L.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjMxOGEwZjhkNjcyYjRkNmY4ZTczNmY4NDZjMzEyYTQ2L3NlYzozMThhMGY4ZDY3MmI0ZDZmOGU3MzZmODQ2YzMxMmE0Nl80Ni9mcmFnOjQ0ZTcwY2UwODUwZDQ4ZWQ4NDY0M2YxMWU3ZmM0MzlkL3RleHRyZWdpb246NDRlNzBjZTA4NTBkNDhlZDg0NjQzZjExZTdmYzQzOWRfMzU3OQ_cbb53e6b-0839-451d-a024-71a1e40c73b5": {
"value": "The Group carried out its business activities in Spain and Portugal in the year ended 31 December 2021.",
"dimensions": {
"concept": "ifrs-full:PrincipalPlaceOfBusiness",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjMxOGEwZjhkNjcyYjRkNmY4ZTczNmY4NDZjMzEyYTQ2L3NlYzozMThhMGY4ZDY3MmI0ZDZmOGU3MzZmODQ2YzMxMmE0Nl80OS9mcmFnOmIxOGJmYTllM2ZmNjRmZjRiM2MxNWRkZjFlOWJiYTUwL3RleHRyZWdpb246YjE4YmZhOWUzZmY2NGZmNGIzYzE1ZGRmMWU5YmJhNTBfOTg5NTYwNDY2MDM5Mg_0d794e12-f581-4c65-928e-c2c625550066": {
"value": "
7.\u00a0 \u00a0 Investment property
The breakdown of and changes in items included under the Investment Property heading in the
consolidated statement of financial position in 2021 and 2020 were as follows:
Changes in value of investment property
Investment property is recognised at fair value. The income recognised in the 2021 consolidated
income statement from measuring investment property at fair value amounted to EUR 177,008
thousand (EUR 84,468 thousand in losses in 2020).
Investment property mainly includes property assets in the office, net lease, shopping centre and
logistics segments.
The additions and assets acquired in 2021 and 2020 were as follows:
The additions made in 2021 correspond to the purchase of an office building and the purchase of
vertical building rights on a plot zoned for office use in Madrid for an amount of EUR 21 million, and
the acquisition of two plots of land zoned for logistics use in Madrid and Valencia for a total amount of
EUR 19 million.
The remaining additions in 2021 corresponded to improvement and adaptation works carried out in
certain properties owned by the Group, including, among others, the office buildings at Castellana 85,
Avenida de Burgos 208, Plaza Ruiz Picasso and Castellana 280 in Madrid, in Torre Glories, Pere IV in
Barcelona and the Monumental building in Lisbon. In the Porto P\u00ed and Saler shopping centers and in
the logistics developments located in the Madrid region.
The disposals made in 2021 correspond mainly with the sale of 32 Caprabo supermarkets, an office
building in Madrid and four logistics warehouses, having obtained a positive result of EUR 4,057
thousand recorded under the heading \"Gains or losses on disposals of non-current assets\" of the
consolidated profit and loss account.\u00a0
The additions made in 2020 corresponded to an office building in Barcelona in the amount of EUR 15
million and to the acquisition of a logistics landplot in Azuqueca (Guadalajara).
The other additions in 2020 refer to the improvement and adaptation work carried out on certain
properties owned by the Group, most notably the El Saler Shopping Centre in Valencia, X Madrid and
Porto Pi in Palma de Mallorca, and the development of Monumental, Castellana 85, Torre Gl\u00f3ries and
39
Diagonal 605 in the Office segment and certain logistics warehouses in Azuqueca, Lisbon, San
Fernando de Henares and Seville.
The losses in 2020 correspond to the contribution of three trading venues to the investee Silicius Real
Estate Socimi (see Note 3) and to the sale of certain assets leased from subsidiary Tree, having
obtained a positive result of EUR 161 thousand registered under the heading \u2018Profit/(losses) on
disposal of assets\u2019 of the attached consolidated income statement.
At 31 December 2021, the Group had pledged real estate assets totalling EUR 2,039,558 thousand
(EUR 1,980,286 thousand in 2020) to secure various loans and derivative financial instruments, the
balances of which at 31 December 2021 amounted to EUR 756,498 thousand and EUR 73,265
thousand (EUR 764,937 thousand and EUR 112,298 thousand in 2020), respectively (see Note 14).
The Group holds no rights of use, seizure or similar situations with regard to its investment property.
The Group did not hold financial leases in 2021 and 2020.
All the properties included under \u201cInvestment property\u201d were insured as of 31 December 2021.
As of 31 December 2021, the Group had firm purchase commitments for investment property
amounting to EUR 7,455 thousand, without considering the investments committed in constructions
and improvements.
In 2021 and 2020 no finance costs were capitalised in the cost of constructing the properties.
In relation to the Group's commitment to climate change management (see note 23), on 31 December
2021, 91% of its office buildings, 85% of its logistics assets and 97% of its shopping centers were
certified under BREEAM and LEED standards, with 26 new assets having been certified during the
2021 financial year
Fair value measurement and sensitivity
All investment property leased or to be leased through operating leases are classified as investment
property.
In accordance with IAS 40, the Group periodically determines the fair value of its investment property
so that the fair value reflects the actual market conditions of the investment property items at that date.
This fair value is determined each year based on the appraisals undertaken by independent experts.
The market value of the Group\u2019s investment property as of 31 December 2021 and 2020, calculated
based on appraisals carried out by Savills Consultores Inmobiliarios, S.A., CBRE Valuation Advisory,
S.A. and Jones Lang LaSalle, S.A. independent appraisers not related to the Group, amounted to
EUR 12,402,279 thousand (EUR 12,180,759 in 2020). This valuation includes the value of the implied
derivative of the lease income with BBVA amounting to EUR 167,080 thousand and EUR 107,910
thousand as of 31 December 2021 and 2020, respectively; it does not include advances paid by the
Group to third parties for the purchase of assets amounting to EUR 27,253 thousand (EUR 34,450
thousand in 2020) and does not include the value of the rights of use registered by application of IFRS
16 amounting to EUR 34,805 thousand (EUR 32,048 thousand in 2020). The valuation was carried out
in accordance with the Appraisal and Valuation Standards issued by the Royal Institute of Chartered
Surveyors (RICS) of the United Kingdom and the International Valuation Standards (IVS) issued by the
International Valuation Standards Committee (IVSC). In relation to the fair value of the rights of use,
the group also obtains valuations from independent third parties.
The method used to calculate the market value of investment property, except the BBVA portfolio,
involves drawing up ten-year projections of income and expenses for each asset, adjusted at the
reporting date using a market discount rate. The residual amount at the end of year 10 is calculated by
applying an exit yield or cap rate to the net income projections for year 11. The market values obtained
are analysed by calculating and assessing the capitalisation of the returns implicit in these values. The
projections are designed to reflect the best estimate of future income and expenses from the
investment properties. Both the exit yield and discount rate are determined taking into account the
national market and institutional market conditions.
The method used by CBRE to value the BBVA portfolio analyses each property individually, without
making any adjustments for inclusion in a large portfolio of properties. For each property, a
capitalisation rate has been assumed for the estimated market rent and subsequently adjusted on the
basis of the following parameters:
-\u00a0 \u00a0 \u00a0 Term of the lease, collateral terms and guarantees and creditworthiness of the tenant.
-\u00a0 \u00a0 \u00a0 Location of the premises within the city (downtown, metropolitan area or suburbs).
-\u00a0 \u00a0 \u00a0 Immediate vicinity of the property.
-\u00a0 \u00a0 \u00a0 Level of upkeep of the property (outside and inside).
-\u00a0 \u00a0 \u00a0 Above and below-ground distribution of the floor area.
-\u00a0 \u00a0 \u00a0 Fa\u00e7ade on one street or more than one (corner, three-sided).
-\u00a0 \u00a0 \u00a0 Lease situation with respect to current market rent.
The fees paid by the Group to valuers for appraisal services rendered up to 31 December 2021 and
2020 were as follows
2020
Total assets measured at fair value
No assets were reclassified from one level to another during 2021 or 2020. At 31 December 2021, the
gross surface areas and occupancy rates of the assets were as follows:
2021
(*) Not including square metres of ongoing projects or land
2020
(*) Not including square metres of ongoing projects or land
Hypotheses used in the valuation
In relation to the determination of the value of the fair value of investment property, the significant
unobservable input data used in the measurement of fair value relates to market rents (considered in
each cash flow projection period), the exit yield (as a key factor in the exit value of the asset in year
10), and the required internal rate of return (the \"IRR\", the rate used for the discounted cash flow
projections).
The quantitative information on the significant non-observable input data used in measuring fair value
is shown below.
2021
31 December 2020
Consolidated profit/loss before tax
The effect of a 1%, 5% and 10% change in the rents from investment property considered would have
the following impact on consolidated assets and on the consolidated income statement:
31 December 2021
Consolidated profit/loss before tax
31 December 2020
Consolidated profit/loss before tax
The effect of one-quarter, one-half and one point changes in the considered exit yields, in the
assumption based on return calculated as the result of dividing the net operating income of the last
year of the period analysed by the estimated exit yield, on investment property in the consolidated
asset and in the consolidated income statement, would be as follows:
31 December 2021
Consolidated profit/loss before tax
31 December 2020
Consolidated profit/loss before tax
The details of the \u2018Change in value of investment property\u2019 in the consolidated income statement are
as follows:
Accordingly, the impact on the consolidated income statement of the revaluations of the Group\u2019s real
estate assets in 2021, taking into consideration all headings affected in the consolidated income
statement, is as follows:
Changes in fair value of investment property
Changes in the fair value of derivatives
Effect on the income statement
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentPropertyExplanatory",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjMxOGEwZjhkNjcyYjRkNmY4ZTczNmY4NDZjMzEyYTQ2L3NlYzozMThhMGY4ZDY3MmI0ZDZmOGU3MzZmODQ2YzMxMmE0Nl81Mi9mcmFnOjY0MTBmOGJkOTNjOTQ1ZjViNTJjYWVhYWU0NGJkOGYzL3RleHRyZWdpb246NjQxMGY4YmQ5M2M5NDVmNWI1MmNhZWFhZTQ0YmQ4ZjNfMTc2OQ_b5d1cb99-42af-4f41-a6d8-75b35016f78e": {
"value": "
8.\u00a0 \u00a0 Operating leases
8.1 Operating leases \u2013 Tenant
The Group, in its position as a tenant, only maintains short-term and low-value leases, which, following
an analysis of the application of IFRS 16, recognises them as a straight-line expense over the lease
term. In 2021, the Group recorded an expense of EUR 699 thousand (EUR 698 thousand in 2020)
included under \u2018Other operating expenses\u2019 in the accompanying consolidated income statement.
8.2 Operating leases \u2013 Landlord
The occupancy rates of the leased buildings at 31 December 2021 were as follows:
At 31 December 2021, the ordinary income from and the fair value of each of the assets were as
follows:
2021
(a)The gross income indicated in the table above refers to the rental income (Note 6) of the
properties, accrued since their incorporation into the Group, without taking into account
credits (including those related to COVID-19), and rental income straight-lining.
(b)Includes investment property and the embedded derivative (Note 10).
46
2020
(a)The gross income indicated in the table above refers to income from leases (Note 6) of
the properties accrued since their incorporation into the Group, without taking into
account credits and rental income straight-lining.
(b)Includes investment property and the embedded derivative (Note 10).
The leases held between the Group and its customers include a fixed rent and, where applicable, a
variable rent linked to the lessee\u2019s performance.
At 31 December 2021, the future minimum lease payments under non-cancellable operating leases
(calculated at the nominal amount) are as follows:
Between one and five years
In 2021, the Group recorded EUR 4,477 thousand (EUR 4,895 thousand in 2020) due to lease income
relating to variable lease payments not fixed to a rate or an index.
.
",
"dimensions": {
"concept": "mer:DisclosureOfOperatingLeasesTextBlock",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjMxOGEwZjhkNjcyYjRkNmY4ZTczNmY4NDZjMzEyYTQ2L3NlYzozMThhMGY4ZDY3MmI0ZDZmOGU3MzZmODQ2YzMxMmE0Nl81NS9mcmFnOjQzZTI1MDY0ODYxNzQ0MTViNjFhM2NmY2M0MWFlMGMzL3RleHRyZWdpb246NDNlMjUwNjQ4NjE3NDQxNWI2MWEzY2ZjYzQxYWUwYzNfMjQ3NQ_e55e6196-c76e-417c-8cca-4836185789d2": {
"value": "
9.\u00a0 \u00a0 Investments accounted for using the equity method
The changes in 2021 in investments in companies accounted for using the equity method are as
follows:
Additions made during the year
Derecognitions made during the year
Profit/(Loss) for the year
In relation to the investments held by the equity method, the additions for the year correspond mainly
to the capital contribution made in Distrito Castellana Norte, S.A. as a result of the capital increase
made during the year, which has led to an increase of EUR 2,922 thousand for the Group. On the
other hand, the decrease corresponds to the effect of the refund of the share premium of Silicius Real
Estate SOCIMI, S.A.
In 2021, the amount associated with the value of the purchase option held by Silicius Real Estate
SOCIMI, S.A. on the interest held by the Group was transferred to \"Other non-current financial
liabilities\" (Derivatives). This amount was presented, to date, by adjusting the fair value of the stake
held. Its final settlement will not be made in cash but will involve, where appropriate, an adjustment to
the value of the holding in Silicius Real Estate SOCIMI, S.A.
The other changes relate to the results obtained by the investees in 2021 and to the acquisition of
Edged Spain, S.L. (Note 3).
The main changes in 2020 were as follows:
On 27 February 2020, the Parent acquired a stake in Silicius Real Estate, S.L., which represented an
increase of EUR 91,021 thousand corresponding to 17.19% of the shares (see Note 3). In 2020,
Silicius Real Estate, S.L., carried out capital increase by means of non-monetary contribution, in which
the Parent did not participate, and the percentage of ownership was therefore diluted. At 31 December
2020, this ownership stake was 15.29% with a consolidated net value of EUR 70,542 thousand as a
result of including the profit/loss attributable to the Parent Company after standardising the accounting
criteria on fair value.
The detail of investments in companies accounted for using the equity method and the profit/loss
attributable to the Group at 31 December 2021 is as follows:
48
2021
Profit/(loss)
Attributable
to the Group
Distrito Castellana
Norte, S.A
\u2018Operaci\u00f3n Chamart\u00edn\u2019
construction development and
property operation
Silicius Real Estate
SOCIMI, S.A.
Sale and lease of property
Management of the port
concession of the logistics
activity area
2020
Distrito Castellana
Norte, S.A
\u2018Operaci\u00f3n Chamart\u00edn\u2019
construction development and
property operation
Silicius Real Estate,
S.L. (*)
Sale and lease of property
Gesti\u00f3n de la concesi\u00f3n
portuaria de la Zona de
(*) Includes change in value of the derivative held
All companies detailed in the table above are accounted for using the equity method.
The key business indicators at 100% for the Group\u2019s associates (standardised using the regulatory
framework applicable to the Group) are as follows:
2021
Provitae
Centros
Asistenciales
, S.L.
Paseo
Comercial
Carlos III,
S.A.
Centro
Intermodal
de Log\u00edstica
S.A.
(CILSA)
Distrito
Castellana
Norte, S.A.
Silicius Real
Estate
SOCIMI S.A
Profit/(loss) from operations
At the end of the year, there were no indications of impairment on the recoverable value of the
investments held, aside from those already recorded.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfInvestmentsAccountedForUsingEquityMethodExplanatory",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjMxOGEwZjhkNjcyYjRkNmY4ZTczNmY4NDZjMzEyYTQ2L3NlYzozMThhMGY4ZDY3MmI0ZDZmOGU3MzZmODQ2YzMxMmE0Nl81OC9mcmFnOjc3MzBmNTlkOWIwNTQ5YzE5YjlkZDcwY2ExOTI0NWU5L3RleHRyZWdpb246NzczMGY1OWQ5YjA1NDljMTliOWRkNzBjYTE5MjQ1ZTlfNDM0Mg_e0122bea-db38-486c-ab2c-74c9f5fb7c83": {
"value": "
10.\u00a0 \u00a0 Current and non-current financial assets
The breakdown, by type, of the balance of this heading in the consolidated statement of financial
position at 31 December 2021 is as follows:
Classification of financial assets by category:
\u00a0 Derivative embedded in BBVA lease
\u00a0 Financial assets at fair value with changes in profit and loss
\u00a0 Equity instruments
\u00a0 Loans to third parties
\u00a0 Loans to associates
\u00a0 Deposits and guarantees
\u00a0 Financial assets at fair value with changes in profit and loss
\u00a0 Investments in associates
\u00a0 Loans to third parties
\u00a0 Other financial assets
\u00a0 Trade and other receivables
The carrying amount of financial assets recognised at amortised cost does not differ from their fair
value.
Derivatives
\u201cDerivatives\u201d includes the value of the embedded derivative corresponding to the inflation multiplier
included in the lease with BBVA to revise rents annually (see Note 7). The increase in the value of the
derivative in 2021 amounts to EUR 59,212 thousand (EUR 16,775 thousand decrease in 2020). Of the
variation, EUR 42 thousand, corresponds to the sum the Group collected as part of the sale of the
BBVA branches sold in 2021. The rest of the variation, amounting to EUR 59,170 thousand, is
recognised under \u201cChange in fair value of financial instruments\u201d in the accompanying 2021
consolidated income statement. The measurement approach used is described in Note 5.7 and is
applicable to Level two of the fair value measurement hierarchy established in IFRS 7, as observable
inputs but not quoted prices are reflected.
Sensitivity to fluctuations of percentage points in the inflation curves is analysed below:
51
2021
Consolidated profit/loss
before tax
2020
Consolidated profit
before tax
Financial assets at fair value with changes in profit and loss
On 30 July 2021, the Parent sold its ownership interest in Aedas Homes, S.A. equal to 1.70% of its
share capital, with no significant impact on the accompanying consolidated financial statements.
At the end of 2020, this heading included 15.29% in Silicius Real Estate, SOCIMI, S.A. for EUR
86,521 thousand, acquired by the Parent through an asset contribution. In the first half of 2021, the
Parent sold 353,966 shares for EUR 5,418 thousand, which did not have a significant impact on profits
or losses. The ownership stake was reduced to EUR 80,964 thousand after the sale, which the Group
reclassified under \u2018Current financial assets,\u2019 classified as available-for-sale assets, on the
accompanying consolidated statement of financial position due to the maturity of the put option in the
short term, with its holding at the end of 2021 being 15.26%.
At 31 December 2021, it is very likely that the Parent Company will exercise its option to sell at the
purchase price of the transaction, and Management's analysis did not indicate signs of impairment in
the investment.
Loans to third parties
The \u201cOther non-current financial assets\" heading includes the loan provided to Desarrollos
Urban\u00edsticos Udra, S.A.U., shareholder of Distrito Castellana Norte, S.A., for a sum of EUR 86,397
thousand, which accrues market rate interest. At 31 December 2021, the outstanding amount was
EUR 89,262 thousand in principal and EUR 307 thousand in interest. In relation to the aforementioned
loan, the Group has guarantees from the creditor associated with 10% of the shares in the company
Distrito Castellana Norte, S.A., not having identified credit risk of the debtor.
Likewise, this heading also includes tenant rent linearisation, marketing expenses and installation
expenses amounting to EUR 30,700 thousand.
At the close of 2020, the \u201cOther current financial assets\u201d heading included the loan provided to Juno
Holdings 1, S.a.r.l. for EUR 70,000 thousand, which has a bullet repayment on maturity in November
2021. That loan accrues an annual interest rate of 2% due at maturity. On 15 December 2021, the
Group received EUR 73,010 thousand, with EUR 70,000 thousand in principal and the rest being
interest.
Deposits and guarantees
\u201cDeposits and guarantees\u201d primarily includes the guarantees provided by lessees as security
amounting to EUR 64,124 thousand (EUR 66,706 thousand at 31 December 2020), which the Group
has deposited with the housing authority (Instituto de la Vivienda) in each region. At 31 December
2021, guarantees provided by lessees as security amounted to EUR 73,842 thousand (EUR 73,376
thousand at 31 December 2020) and were recognised under \u201cNon-current liabilities \u2013 Other financial
liabilities\u201d on the liability side of the accompanying consolidated statement of financial position for
2021 (see Note 15).
Classification of financial assets by maturity:
The classification of financial assets by maturity at 31 December 2021 and 2020 is as follows:
2021
\u00a0 Derivative embedded in BBVA lease
\u00a0 Equity instruments
\u00a0 Loans to third parties and associates
\u00a0 Deposits and guarantees
\u00a0 Financial assets at fair value with changes in
profit and loss
\u00a0 Other financial assets
\u00a0 Trade and other receivables
2020
Derivative embedded in BBVA lease agreement
Available-for-sale financial assets
Loans to third parties and associates
Investments in Group companies and associates
Trade and other receivables
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialAssetsExplanatory",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjMxOGEwZjhkNjcyYjRkNmY4ZTczNmY4NDZjMzEyYTQ2L3NlYzozMThhMGY4ZDY3MmI0ZDZmOGU3MzZmODQ2YzMxMmE0Nl82MS9mcmFnOjc2MTFjOTAxMDMyMDQ4NmE4ZjI0YTliMmU1ZWE2MTNhL3RleHRyZWdpb246NzYxMWM5MDEwMzIwNDg2YThmMjRhOWIyZTVlYTYxM2FfMTM5Mg_c3dfd51c-706a-484e-b3ad-dbd97596eb78": {
"value": "
11.\u00a0 \u00a0 Trade and other receivables
At 31 December 2021, the heading \u201cTrade and other receivables\u201d includes the following items:
Trade and notes receivable
Sundry accounts receivable
Other receivables from public authorities (Note 17)
Impairment of trade receivables
\u201cTrade and notes receivable\u201d in the accompanying consolidated statement of financial position at 31
December 2021 mainly included the balances receivable from leasing investment property. In general
these receivables are interest free and the terms of collection range from immediate payment on
billing to payment at 30 days, while the average collection period is approximately 5 days (5 days in
2020).
At 31 December 2021, a breakdown by age of overdue receivables not considered impaired is as
follows:
At 31 December 2021 and 2020, no collection rights had been transferred to financial institutions.
In accordance with IFRS 9, the Group periodically analyses the risk of insolvency of its accounts
receivable by updating the related provision for impairment losses. The Group\u2019s directors consider that
the amount of trade and other receivables approximates their fair value.
The changes in the impairment losses and bad debt in 2021 and 2020 were as follows:
54
Balance at 31 December 2019
Balance at 31 December 2020
Balance at 31 December 2021
Bilbao and Valencia and Lisbon Stock Exchanges. The market price of the Parent\u2019s shares at 31
December 2021 and the average market price for the fourth quarter amounted to EUR 9.57 and EUR
9.54 per share, respectively.
At 31 December 2021, according to information extracted from the CNMV, in relation to Royal Decree
1362/2007, of 19 October and Circular 2/2007, of 19 December, the shareholders with significant
holdings in the share capital of Merlin Properties SOCIMI, S.A., both direct and indirect, in excess of
3% of the share capital, are the following according to public information:
55
Nortia Capital Investment
Holding, S.L.
13.3 Other reserves
The detail of reserves at 31 December 2021 and 2020 is as follows:
Reserves of consolidated companies
To legal reserve
The legal reserve will be established in accordance with section 274 of the Consolidated Text of the
Corporate Enterprise Law, which stipulates, in all cases, that 10% of net profit for each year must be
transferred to the legal reserve until the balance of this reserve reaches at least 20% of the share
capital.
This reserve cannot be distributed, and if it is used to offset losses, in the event no other reserves are
available for this purpose, it must be restored with future profits.
At 31 December 2021, the Group had not yet reached the legally required minimum established in the
Consolidated Text of the Corporate Enterprise Law.
The legal reserve of companies which have chosen to avail themselves of the special tax regime
established in Law 11/2009, of 26 October, governing REITs, must not exceed 20% of share capital.
The Articles of Association of these companies may not establish any other type of restricted reserves.
Reserves of consolidated companies
The detail of the reserves of consolidated companies is as follows:
Merlin Properties SOCIMI, S.A.
Tree Inversiones Inmobiliarias, SOCIMI, S.A.
Merlin Log\u00edstica, S.L.U.
Varitelia Distribuciones, S.L.
La Vital Centro Comercial y de Ocio, S.L.
Global Carihuela Patrimonio Comercial, S.A.
Parques Log\u00edsticos de la Zona Franca, S.A.
Sevisur Log\u00edstica, S.A.
Innovaci\u00f3n Colaborativa, S.A.
Desarrollo Urbano de Patraix, S.A.
Global Murex Iberia, S.L.
The Exhibitions Company, S.A.U.
Milos Asset Management, S.L.
MPCVI- Compra e venda Imobili\u00e1ria, S.A.
MPEP-Properties Escrit\u00f3rios Portugal, S.A.
Promosete Investimentos Imobiliarios, S.A.
Pra\u00e7a do Marqu\u00e9s-Servi\u00e7os auxiliares, S.A.
Forum Almada \u2013 Gestao Centro Comercial, Lda.
Torre dos Oceanus Investimentos Inmobiliarios, S.A.
Torre Fernao Magalhanes, S.A.
Dividends
On 27 April 2021, the General Meeting approved the distribution of EUR 140,066 thousand charged to
the \u2018share premium\u2019 reserve.
On 11 November 2021, the Company's Board approved the distribution of a dividend of EUR 70,033
thousand charged to the profit for 2021.
13.4 Treasury shares
\u00a0 \u00a0 \u00a0 At 31 December 2021, the Parent held treasury shares amounting to EUR 32,305 thousand.
\u00a0 \u00a0 \u00a0 The changes in 2021 were as follows:
Balance at 1 January 2020
Balance at 31 December 2020
Balance at 31 December 2021
(a)Includes current financial assets, net of option value corresponding to 15.26% of the shares from Silicius Real
Estate SOCIMI S.A. (see Note 10) amounting to EUR 80,964 thousand. In 2020, includes current financial
assets, net of option value, corresponding to 15.29% of the shares acquired from Silicius Real Estate SOCIMI
S.A. (see Note 10) amounting to EUR 86,521 thousand, and the loan granted by the Parent to Juno Holdings
I, S.A.R.L. in 2019 amounting to EUR 70,000 thousand, as an integral part of the sale of a group of real estate
assets. In both years, the amount of treasury shares is included as other current financial assets.
(b)Gross debt amounts without considering debt formalisation expenses and unpaid interest due.
13.6 Earning per share
Basic
Basic earnings per share are calculated by dividing the net profit attributable to common equity
holders of the Parent by the weighted average number of ordinary shares outstanding during the
period, excluding treasury shares.
The detail of the calculation of basic earnings per share is as follows:
Profit for the year attributable to holders of equity instruments net of the Parent
Company (thousands euros)
Weighted average number of shares outstanding (thousands)
Basic earnings per share (euros)
Diluted
In accordance with paragraph 41 of IAS 33, potential ordinary shares are treated as dilutive when, and
only when, their conversion to ordinary shares could reduce the earnings per share of the continuing
activities.
As indicated in Note 20, the Group has granted its executives and key personnel a variable
remuneration plan payable in shares on condition that the shareholder return rate during the 3-year
period ending in 2019 reaches a certain level. The amount of this variable remuneration amounts to a
maximum of EUR 75 million, which will be paid with a variable number of shares, limited to a
maximum of 6 million. At 31 December 2019 (the end of the measurement period) and considering the
final share reference price (i.e., the average closing share price for the Company in the 90 trading
sessions before 31 December 2019) 5,874,111 shares were allocated.
Taking into account the characteristics of the plan (detailed in Note 20) and the fulfilment of its terms,
at 31 December 2021 the plan would have a dilutive effect on earnings per share.
Diluted earnings per share are calculated by adjusting the profit attributable to equity holders of the
Parent by the weighted average ordinary shares outstanding after adjusting for the dilutive effects of
potential ordinary shares, i.e., as if all potentially dilutive ordinary shares had been converted.
The potential ordinary shares of the variable remuneration plan, as stated in paragraph 46 of IAS 33,
have been determined as if the plan consisted of a contract to issue a certain number of ordinary
shares at their average market price during the period, which will not have dilutive effect, and a
contract to issue the remaining ordinary shares for free.
The detail of the calculation of the diluted earnings per share is as follows:
Profit for the year attributable to holders of equity instruments net of the
Parent Company (thousands euros)
Weighted average number of shares outstanding (thousands)
Weighted average number of potential ordinary shares to be delivered
under the variable remuneration plan (Note 20).
Weighted average number of potential ordinary shares not provisioned
at market price
Diluted earnings per share (euros)
Measured at amortised cost
\u00a0 Syndicated loan arrangement expenses
\u00a0 Total syndicated loan
\u00a0 Senior syndicated mortgage loan (Tree)
\u00a0 Syndicated mortgage loan arrangement costs (Tree)
\u00a0 Total senior syndicated mortgage loan (Tree)
Revolving credit facility
Loan arrangement expenses
Total debentures and bonds
Derivative financial instruments
Measured at amortised cost
\u00a0 Senior syndicated mortgage loan (Tree)
\u00a0 Debentures and bonds
\u00a0 Revolving credit facility
\u00a0 Loan arrangement expenses
\u00a0 Total amortised cost
Derivative financial instruments
There is no material difference between the carrying amount and the fair value of financial liabilities at
amortised cost.
On 20 April 2016, the Parent Company was given a credit rating of \u201cBBB\u201d with stable outlook by
Standard & Poor\u2019s Rating Credit Market Services Europe Limited. On 24 May 2018, Standard & Poor's
updated this rating to \u201cBBB\u201d with a positive outlook, changing it to stable outlook due to the COVID-19
61
pandemic on 27 March 2020. On 4 June 2021, Standard & Poor's again ratified the rating of \u2018BBB\u2019 with
stable outlook.
Additionally, on 17 October 2016, the Company was given a \u201cBaa2\u201d investment grade credit rating by
Moody\u2019s. On 27 May 2020, Moody's updated this rating to \u201cBaa2\u201d with a negative outlook due to the
Covid-19 pandemic. On 3 December 2021, Moody's updated the rating to \u2018Baa2\u2019 with stable outlook.
14.1 Loams
The detail of loans at 31 December 2021 is as follows:
2021
Expenses
incurred from
formalising
loans (Note
14.5)
Revolving credit facilities
Senior syndicated secured loan (Tree)
Secured loans - other assets
2020
Syndicated loan and revolving credit facilities - Parent
On 25 April 2019, the Group arranged a senior syndicated loan amounting to EUR 1,550 million,
including two tranches, a corporate loan of EUR 850 million and a corporate credit facility of EUR 700
million due in 2024.
The initial maturity date for this revolving credit facility was 2024, with the possibility of two optional
one-year extensions. The second one-year extension was approved on 30 June 2021, and the new
maturity date is 9 May 2026.
The corporate loan accrues an interest rate of the one-month EURIBOR + 120 basis points, while the
revolving credit facility yields an interest rate of the one-month EURIBOR + 90 basis points, and both
incorporate a cost adjustment mechanism based on four sustainability criteria.
On 20 March 2020, the Group drew down EUR 700 million from its corporate credit facility to optimise
and strengthen its financial position in view of the uncertainty generated by Covid-19. On 17 July 2020
the Group repaid the full amount drawn down from its credit facility.
In accordance with IFRS 9, the Group assessed in 2019 the nature of the refinancing undertaken
previously, concluding that it does not represent a substantial change (10% test). Therefore, the
difference between the value of the old debt at amortised cost and the new debt discounted at the
effective interest rate of the old debt was recognised in 2019 as a lower financial expenses of EUR
7,797 thousand under \u201cFinancial expenses\u201d in the consolidated income statement. This amount will
revert to the consolidated income statement for subsequent years in accordance with the effective
interest rate of the debt. In 2021, the application of the amortised cost in relation to these concepts
involved a financial cost of EUR 1,790 thousand (EUR 1,795 thousand in 2020).
This facility maintains the commitments to maintain certain coverage ratios existing in the previous
facility, the Group's bonds and the European Investment Bank loan. These ratios are defined as the
ratio between the value of the assets over the outstanding debt (\u2018Loan to Value\u2019), the ratio between the
group\u2019s income and its debt coverage (\u2018ICR\u2019) and the ratio between assets and debt, both without
collateral (\u2018Unencumbered Ratio\u2019). The Parent\u2019s directors have confirmed that these ratios were met at
31 December 2021 and do not expect that they will not be fulfilled in the coming years.
Unsecured loan of the Parent
On 20 December 2018, the Parent took out an unsecured loan from the European Investment Bank in
an amount of EUR 51,000 thousand and with a 10-year maturity. On 4 November 2019, the Parent
formalised the second tranche of the unsecured loan from the European Investment Bank amounting
to EUR 64,000 thousand, with the two tranches totalling EUR 115,000 thousand. This loan has a
maturity of 10 years. This credit facility shall be allocated to the development of logistical assets in the
Castilla\u2013La Mancha region.
On 10 March 2020 and 26 October 2020, the Group drew down EUR 23,400 thousand and EUR 5,600
thousand corresponding to the first tranche of the facility. This loan accrues a fixed interest rate of 60
basis points.\u00a0 \u00a0
On 16 December 2021, the Parent took out an unsecured loan from the European Investment Bank in
an amount of EUR 45,200 thousand and with a 10-year maturity. This financing will be used to make
investments in energy efficiency. At year-end, this loan was not drawn down.
The credit facility includes commitments to maintain certain coverage ratios. These ratios are defined
as the ratio between the value of the assets over the outstanding debt (\u2018Loan to Value\u2019), the ratio
between the group\u2019s income and its debt coverage (\u2018ICR\u2019) and the ratio between assets and debt, both
without collateral (\u2018Unencumbered Ratio\u2019). The Parent\u2019s directors have confirmed that these ratios
were met at 31 December 2021 and do not expect that they will not be fulfilled in the coming years.
Syndicated loans - Subsidiaries
Syndicated unsecured loan taken out by Sevisur Log\u00edstica, S.A. for EUR 31,000 thousand in principal,
maturing in September 2020. This facility consists of two tranches of EUR 25,000 and 6,000 thousand,
with a market rate of EURIBOR + 125 and 200 basis points, respectively. In 2020, the company repaid
it.
Senior syndicated mortgage loan (Tree):
The senior syndicated secured loan of the subsidiary, Tree Investments Inmobiliarias SOCIMI, S.A.,
was signed on 29 July 2010 and novated for the first time on 30 December 2014.
The refinancing for 2014 and the first application of IFRS 9 \u2018Financial Instruments\u2019 resulted in an
increase in reserves and a decrease in debt amounting to EUR 30,592 thousand at 1 January 2018,
and an increase in financial expenditure amounting to EUR 10,083 thousand in 2018.
On 29 November 2018, the senior syndicated loan was novated so that the initially scheduled maturity
in 2024 was postponed until 31 March 2031 with the possibility of extending the maturity annually for
the next 3 years until 31 March 2034. The second of these extensions was approved in 2021. This
loan accrues interest at a rate of the 3-month EURIBOR + 120 basis points.
In accordance with IFRS 9, the Group evaluated the nature of the refinancing undertaken in 2018 and
concluded that it did not represent a material change (10% test). In accordance with IFRS 9, the
difference between the value of the old debt at amortised cost and the new debt updated at the
effective interest rate of the old debt was recognised as a financial result. This result will revert to the
consolidated income statement for subsequent years in accordance with the effective interest rate of
the debt. In 2021, the application of the amortised cost in relation to these concepts involved a
financial cost of EUR 3,686 thousand (EUR 4,472 thousand in 2020).
The financing includes commitments to maintain certain coverage ratios, which are standard in these
types of real estate companies, such as the loan-to-value ratio, the ratio of the subsidiary\u2019s income
used to service the debt (interest coverage ratio, ICR), and a minimum credit rating of BBVA from
ratings agencies. The Parent\u2019s directors have confirmed that these ratios were met at 31 December
2021 and do not expect that they will not be fulfilled in the coming years.
Secured loans - other assets
At 31 December 2021, the Group\u2019s subsidiaries had taken out the following mortgage loans:
2021
2020
On 26 March 2015, the Group subrogated a secured loan taken out from Caixabank, S.A., with the
Alcal\u00e1 38-40 office building as collateral. This loan has a principal of EUR 21,000 thousand, a term of
15 years, an interest rate of 3-month EURIBOR + 150 basis points, a 4-year grace period for the
principal, and the principal is repayable in full using the French method over the following 11 years.
On 26 April 2019, the Group entered into a novation agreement modifying the secured loan signed on
4 December 2015 with ING Bank N.V. by the subsidiary Merlin Log\u00edstica S.L.U. The due date for this
financial arrangement, originally set to be in 2020, was extended until 2026. This financial
arrangement accrues an interest rate of the 3-month EURIBOR + 100 basis points; it includes a cost
adjustment mechanism based on four sustainability criteria. On 26 March 2021, the secured loan
agreement was changed to increase the loan amount by EUR 2,100 thousand to a total of EUR
70,000 thousand.
This loan requires that the company maintain and comply with certain coverage ratios, such as the
loan-to-value ratio and the ratio of the company\u2019s income used to service the debt (interest coverage
ratio, ICR). The Parent\u2019s directors have confirmed that these ratios were met at 31 December 2021
and do not expect that they will not be fulfilled in the coming years.
In accordance with IFRS 9, the Group evaluated the nature of the refinancing undertaken of the
previous ING loan and concluded that it did not represent a material change (10% test). Therefore, the
difference between the value of the old debt at amortised cost and the new debt discounted at the
effective interest rate of the old debt was recognised as a lower financial expenses of EUR 2,291
thousand under \u201cFinancial expenses\u201d on the 2019 consolidated income statement. This amount will
revert to the consolidated income statement for subsequent years in accordance with the effective
interest rate of the debt.
In 2021, the application of the amortised cost in relation to these concepts involved a financial cost of
EUR 363 thousand (EUR 363 thousand in 2020).
On 19 February 2015, the Group took out a secured loan from Allianz Real Estate for the Marineda
shopping centre. The principal of the loan taken out amounted to EUR 133,600 thousand, it has a term
of 10 years, accrues interest at a fixed rate of 2.66% and the principal is repayable in full upon
maturity. On 1 September 2020, the Group repaid this financing early.
On 2 October 2015, the Group took out a first-ranking floating-rate secured loan from Caixabank, S.A.
on the portfolio made up of 33 property assets in Catalonia. This loan has a principal of EUR 45,500
thousand that will be allocated to finance a portion of the acquisition price of the assets portfolio. It
matures in October 2025 and accrues interest at the rate of the 3-month EURIBOR + 150 basis points
until the end of the loan, which is payable on a quarterly basis. On 31 July 2020, the Group repaid this
financing early.
Maturity of debt
The breakdown by maturity of these loans is as follows:
2021
2020
The Group had undrawn loans and credit facilities at 31 December 2021 from a number of financial
institutions totalling EUR 831 million (EUR 786 million at 31 December 2020).
None of the Group\u2019s debt was denominated in non-euro currencies at 31 December 2021 or 2020.
There are no significant differences between the fair values and carrying amounts of the Group\u2019s
financial liabilities.
The finance cost for interest on the loans totalled EUR 19,752 thousand in 2021 (EUR 25,113
thousand in 2020) and is recognised in the accompanying consolidated income statement for 2021.
At 31 December 2021 and 2020, the debt arrangement expenses had been deducted from the
balance of \u201cBank borrowings\u201d. In 2021, the Group charged an expense of EUR 9,617 thousand (in
2020 EUR 13,296 thousand was charged) under the heading \u2018Financial costs\u2019 of the accompanying
consolidated income statement (see Note 18.d) related to the debt. This allocation in the
accompanying consolidated income statement includes both the first application of IFRS 9 and the
allocation of the debt to the income statement at amortised cost.
14.2 Debenture issues
On 12 May 2017, the Parent subscribed a Euro Medium Term Notes (EMTN) issue programme of up
to EUR 4,000 million, which will replace the original bond issue programme and its supplement
subscribed on 06 April 2016 and 14 October 2016, respectively, for an overall maximum amount of
EUR 2,700 million.
On 18 May 2018, the Parent Company extended that bond-issue scheme (Euro Medium Term Notes -
EMTN) up to an amount of EUR 5,000 million.
On June 17, 2020, the General Shareholders' Meeting approved the extension of this bond issuance
programme up to an amount of EUR 6,000 million, and it was extended on 21 March 2021.
On 7 February 2020, the Parent issued a bond of EUR 100 million at 15 years at 102% of the nominal
value and with a coupon of 1.875%, in addition to EUR 500 million of the same bond issued in the
fourth quarter of 2019.
On 13 July 2020, the Parent issued a bond of EUR 500 million at 7 years with a coupon of 2.375%.
Part of the proceeds were used to repurchase EUR 151.7 million of the bonds expiring in 2022 and
EUR 107.2 million of the bonds expiring in 2023. The remainder (EUR 241.1 million) was used for
early settlement of secured loans maturing in 2025.
On 30 June 2021, the Parent issued a bond of EUR 500 million at 9 years and at 99.196% of nominal
value with a coupon of 1.375%. These funds were used to pay in advance the bond maturing in May
2022 on the 23th February 2022 (see Note 24).
The terms of the bonds issued by the Group abide by UK law and are traded on the Luxembourg
Stock Exchange. The bond issue scheme has the same guarantees and ratio compliance obligations
as the syndicated loan and the revolving credit facility. At year-end 2021, the Group complied with the
covenants set forth in this contract and the directors consider that they will also be met in 2022.
The detail at 31 December 2021 of the bonds issued by Parent is as follows:
2021
2020
(a) Due to the business combination with Metrovacesa carried out in 2016, the Group recognised a bond issue launched by
Metrovacesa for EUR 700 million. The terms of the bonds abide by UK laws and are traded on the Irish Stock Exchange.
This issue also includes a series of compliance obligations and guarantees, which is common in these types of transactions.
At year-end 2020, the Group complied with the covenants set forth in this contract and the directors consider that they will
be met in 2022. (See Note 24)
These bond issues include commitments to maintain certain coverage ratios. These ratios are defined
as the ratio between the value of the assets over the outstanding debt (\u2018Loan to Value\u2019), the ratio
between the group\u2019s income and its debt coverage (\u2018ICR\u2019) and the ratio between assets and debt, both
without collateral (\u2018Unencumbered Ratio\u2019). The Parent\u2019s directors have confirmed that these ratios
were met at 31 December 2021 and do not expect that they will not be fulfilled in the coming years.
The finance cost for interest corresponding to bond issues amounted to EUR 89,330 thousand (EUR
82,109 thousand in 2020, which includes EUR 6,026 thousand corresponding to the premium
associated with early bond redemptions) and is included in the accompanying consolidated income
statement for 2021. The accrued interest payable at 31 December 2021 amounted to EUR 40,322
thousand (EUR 36,291 thousand in 2020). Debt arrangement expenses taken to the consolidated
income statement in 2021 amounted to EUR 5,370 thousand (EUR 5,610 thousand in 2020).
14.3 Derivatives
The detail of the financial instruments as of 31 December 2021 is as follows:
Interest rate derivatives
Interest rate derivatives
To determine the fair value of the interest rate derivatives, the Group discounts the cash flows based
on the embedded derivatives determined by the euro interest rate curve in accordance with market
conditions on the measurement date.
These financial instruments are classified as Level 2 as per IFRS 7, except the one related to the
investment in Silicius (see Note 9), which is classified as Level 3.
The detail of the derivative financial instruments included in the consolidated statement of financial
position at 31 December 2021 is as follows:
2021
Interest rate derivatives
Derivative embedded in contract
Interest rate derivatives
Total derivatives recognised
2020
Interest rate derivatives
Derivative embedded in contract
\u00a0 BBVA lease (Note 10)
Interest rate derivatives
Total derivatives recognised
At the end of 2021, the interest rate hedge financial instruments came mainly from the corporate
syndicated loan of the Parent, and from the syndicated secured loan of the subsidiary Tree
Inversiones Inmobiliarias SOCIMI, S.A.
On the occasion of the refinancing of the syndicated loan of the Parent, a new interest rate swap (IRS)
was signed to hedge the extension of the maturity of the financing from 2021 to 2024. The notional
contract amounts to EUR 850,000 thousand at a cost of 0.0154%.
On 26 April 2019, the subsidiary Merlin Log\u00edstica S.L.U., in the framework of the refinancing of the
secured loan from ING Bank N.V., signed a new interest rate swap (IRS) to hedge the extension of the
maturity of the loan from 2020 to 2026. The notional contract amounts to EUR 67,900 thousand at a
cost of 0.31%.
On the occasion of the novation of the secured loan of Tree Inversiones Inmobiliarias SOCIMI, S.A. on
18 December 2018, a new interest rate swap (IRS) was signed to hedge the maturity extension of the
secured loan from 2024 to 2031. The notional contract amounted to EUR 662,514 thousand and a
cost of 1.693%.
The interest rate derivatives arranged by the Group and their fair values are as follows:
2021
Outstanding notional amount at each date
Syndicated Parent starting 2021)
Tree Inversiones (ends in 2024)
Tree Inversiones (starts in 2024)
Outstanding notional amount at each date
Syndicated Parent (ending
2021)
Syndicated Parent starting
2021)
Tree Inversiones (ending 2024)
Tree Inversiones (starting
2024)
with regards to each of the counterparties, if the financial derivatives arranged with them are within a
financial transaction framework agreement that provides for netting positions. For counterparties for
whom credit information is available, the credit spreads have been obtained from the CDS (Credit
Default Swaps) quoted in the market; whereas for those with no available information, references from
peers have been used. The Group hired Chatham Financial Europe Ltd. to measure the fair value of
the derivatives.
The impact for interest rate derivatives on liabilities and profit or loss before tax of a 50 basis point
fluctuation in the estimated credit risk rate at 31 December 2021 and 2020 would be as follows:
2021
Consolidated profit
before tax
5% rise in credit risk rate
5% reduction in credit risk rate
Short-term revolving credit facilities
Loan arrangement expenses
\u00a0 Senior syndicated secured loan
Total current and non-current liabilities
Allocation to profit
and loss account \u2013
Amortised cost
Impact income
statement IFRS
9
Senior syndicated loan (Tree)
Secured loans - other assets
.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjMxOGEwZjhkNjcyYjRkNmY4ZTczNmY4NDZjMzEyYTQ2L3NlYzozMThhMGY4ZDY3MmI0ZDZmOGU3MzZmODQ2YzMxMmE0Nl83My9mcmFnOmQ4OTZkNzE5OWM5MDRkYTlhNDg1ZTYwYjg2ODRmMjI2L3RleHRyZWdpb246ZDg5NmQ3MTk5YzkwNGRhOWE0ODVlNjBiODY4NGYyMjZfOTg5NTYwNDY1MjMwNg_37139c4c-d67c-4f62-88b8-378aae66a4b2": {
"value": "
15.\u00a0 \u00a0 Other current and no-current liabilities
Details of this heading at 31 December 2021 are as follows:
Guarantees and deposits
received
Borrowings from Group
companies and associates
Other current liabilities
\u201cOther provisions\u201d includes provisions for the measurement of risk associated with a number of
lawsuits and claims filed by third parties arising from the Group\u2019s activity, which were recognised in
accordance with the best existing estimates, as well as the provision corresponding to the variable
retribution that will be disbursed in the long term for a total amount of EUR 3,338 thousand (EUR
9,305 thousand in 2020).
The heading \u201cOther provisions\u201d also includes liabilities for tax debts for which there are uncertainties
as to their amount or timing, where it is likely that the Group may have to dispose of resources to
cancel these obligations as the result of a present obligation.
\u201cGuarantees and deposits received\u201d primarily comprise the amounts deposited by lessees to secure
leases, which will be reimbursed at the end of the lease term.
The Parent and the majority of its subsidiaries adhere to the REIT regime. Under this regime, gains
from the sale of assets are taxed at 0%, provided that certain requirements are met (basically, the
assets must have been held by the REIT for at least three years). Any gains from the sale of assets
acquired prior to joining the REIT tax regime will be distributed on a straight-line basis (unless proven
to be distributed otherwise) over the period during which the REIT owned them. Any gains generated
prior to joining the REIT tax regime will be taxed at the general rate, while a rate of 0% will be applied
for the other years. In this regard, the Parent's directors estimated the tax rate applicable to the tax
gain on the assets acquired prior to their inclusion to the REIT regime (calculated in accordance with
the fair value of the assets obtained from expert appraisals at the date of the business combination
and as of 31 December 2021), recognising the related deferred tax liability.
The Parent's directors do not envisage disposing of any of the investment property acquired after the
Parent and its subsidiaries adhered to the REIT regime within three years, and have therefore not
recognised the deferred tax liability corresponding to the changes in fair value since the assets were
acquired as the applicable tax rate is 0%.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjMxOGEwZjhkNjcyYjRkNmY4ZTczNmY4NDZjMzEyYTQ2L3NlYzozMThhMGY4ZDY3MmI0ZDZmOGU3MzZmODQ2YzMxMmE0Nl83Ni9mcmFnOmJmYmIxYmY5MzBiNjQzZGE5ZjdhMTU1Yzk0YTYzNWZiL3RleHRyZWdpb246YmZiYjFiZjkzMGI2NDNkYTlmN2ExNTVjOTRhNjM1ZmJfOTg5NTYwNDY1MTk3MQ_158c5406-5bad-40ad-b347-74a45be49f4b": {
"value": "
16.\u00a0 \u00a0 Trade and other payables
Details of this heading at 31 December 2021 are as follows:
Suppliers - Group companies and associates
Other payables to public authorities (Note 17)
The increase in Remuneration payable relates to the collections made in 2021 of determined amounts
in relation to the agreements that the Group has with third parties for the future sale of residential land
(see Note 5.2).
The carrying amount of the trade payables is similar to their fair value.
Information on the average period of payment to suppliers. Final provision two of Law 31/2014,
of 3 December:
Below are the disclosures required by additional provision three of Spanish Law 15/2010, of 5 July
(amended by final provision two of Spanish Law 31/2014, of 3 December), prepared in accordance
with the Spanish Accounting and Audit Institute (ICAC) Resolution of 29 January 2016 on the
disclosures to be included in the notes to financial statements in relation to the average period of
payment to suppliers in commercial transactions.
Average period of payment to suppliers
Ratio of transactions settled
Ratio of transactions not yet settled
2020
Public finance for withholdings and other items
Payable to the Social Security
b) Reconciliation of the accounting profit/loss with the taxable profit/tax loss
At 31 December 2021, the taxable profit/loss was calculated as the accounting profit/loss for the year
plus the effect of changes in the fair value of investment property, and temporary differences due to
the existing limitations. At the reporting date of these financial statements, the Group did not recognise
any deferred tax assets in this regard, as it is generally subject to a tax rate of 0% as the Parent and
the majority of the subsidiaries adhere to the REIT regime.
The reconciliation of the accounting profit/loss to consolidated income tax expense for the year at 31
December 2021 is as follows:
75
- Negative goodwill on business combination
'- Consolidation adjustments to profit or loss
'- Tax adjustments Operating profit/loss
- Non-deductible finance cost
'- Profit and loss accounted for using the equity method
- Tax adjustments outside the sale of asset
- Other permanent difference
'- Changes in the value of investment properties
'- Adjustments to depreciation and amortisation
Adjusted taxable profit/loss
The Parent and a significant number of its subsidiaries adhere to the REIT regime. As indicated in
Note 5.13, the taxation of this scheme is constructed at a rate of 0%, provided that certain
requirements are met.
In relation to the permanent differences/consolidation adjustments to profit or loss, the results of the
companies integrated by the equity method are mainly included, and the incorporation of the
amortisation expenses of the real estate investments not included under Income before taxes on the
attached Annual Consolidated Financial statements.
Temporary differences arose from the change in value of investment property (IAS 40 - Fair value
model). In this regard it should be stressed that for those investment properties acquired by
companies already under the REIT regime, since the Parent's directors plan and state that investment
property acquired by subsidiaries already subject to the REIT tax regime will not be sold within three
years, the fair value adjustment in 2021 and 2020 is taxed at 0% and therefore the deferred tax liability
is also zero.
c)\u00a0 Reconciliation of tax expense profit/loss
Expense for increase in value of investment property (a)
Expense for disposal of properties within the REIT regime (b)
Expense for disposal of properties outside the REIT regime
Expense for gain/(loss) at standard rate
Income from adjustments to prior years
Total corporation tax expense
Defered tax and other tax items
Total corporation tax expense
a.This corresponds to the increase in the value of the assets of the non-REIT subsidiaries
(resident in Portugal, which meet the requirements of section 2[1][c] REITs Act to be
considered as eligible assets for the purposes of that regime). The amount is the result of
applying the tax rate that the directors consider will be applicable to the capital gains.
b.Adjustment corresponding to the profit arising in the individual financial statements of the
Parent Company as a result of the sale of real estate asset resulting from the integration of
Metrovacesa whose part of the profit is taxed under the general regime even though it was
sold more than 3 years after its acquisition.
d)\u00a0 Deferred tax assets recognised
The detail of the tax loss carryforwards at 31 December 2021 is as follows:
2021
Total tax loss carryforwards
Other deferred taxes recognised
Total capitalized deferred tax assets
The \u201cOther deferred taxes recognised\u201d heading mainly includes the timing differences caused by the
limitation of depreciation of the assets generated by the acquisition of the Testa and Metrovacesa
subgroup, and tax deductions pending application, mainly for reinvestment, as well as credit for losses
from companies absorbed in previous years.
The deferred tax assets indicated above have been recorded in the consolidated statement of financial
position since the Group\u00b4s directors consider that, based on the best estimates of the Company\u2019s
future results, including certain tax planning measures, it is likely that these assets will be recovered.
The detail of the tax assets not recognised at 31 December 2021 is as follows:
e)\u00a0 Deferred tax liabilities
As indicated above, the deferred tax liabilities arise mainly from the business combinations carried out
in recent years and the increase in the value of the assets of Tree Inversiones Inmobiliarias, SOCIMI,
S.A. (assets acquired prior to its incorporation into the REIT regime) and the non-REIT subsidiaries
(resident in Portugal, which meet the requirements of section 2(1)(c) REIT Act to be considered as
eligible assets for that regime).
The changes at 31 December 2021 are as follows:
Total deferred tax liabilities at 31 December 2019
Increase in value of investment property
Total deferred tax liabilities at 31 December 2020
Increase (decrease) in value of investment property
Derecognitions due to sales
Total deferred tax liabilities at 31 December 2021
therefore, even in the event of discrepancies in the interpretation of current tax legislation in relation to
the tax treatment afforded to certain transactions, such liabilities as might arise would not have a
material effect on the consolidated financial statements. Also, Law 34/2015, of 21 September, partially
amending Law 58/2003, of 17 December, on General Taxation establishes the right of the tax
authorities to initiate a review and investigation procedure of the tax losses offset or carried forward or
tax credits taken or carried forward, which will become statute barred after ten years from the day on
which the regulatory period established for filing the tax return or self-assessment relating to the year
or the tax period in which the right to offset the tax loss or to apply the tax credits arose.
On 10 February 2022, the Tax Agency informed the Parent of the initiation of audit and investigation
actions relating to its income tax in 2016 to 2019 and its value added tax and withholdings in 2018 to
2019. On the date these Consolidated Financial Statements were approved, the Parent was in the
process of collecting the information required by the tax authorities.
g)\u00a0 Disclosure requirements arising from REIT status, Law 11/2009, amended by Law 16/2012
and by Law 11/2021
The disclosure requirements arising from the Parent and certain subsidiaries being considered REITs
are included in the related notes of the separate financial statements.
",
"dimensions": {
"concept": "mer:DisclosureOfPublicEntitiesAndIncomeTaxTextBlock",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjMxOGEwZjhkNjcyYjRkNmY4ZTczNmY4NDZjMzEyYTQ2L3NlYzozMThhMGY4ZDY3MmI0ZDZmOGU3MzZmODQ2YzMxMmE0Nl84Mi9mcmFnOjNkMDA2YzM5ZTI0YjQ1Zjc4YTExNmQ0MmM4ZmUxODg5L3RleHRyZWdpb246M2QwMDZjMzllMjRiNDVmNzhhMTE2ZDQyYzhmZTE4ODlfOTg5NTYwNDY1MTY2Nw_34c402f4-83e6-4d00-ae51-1e3e7519f3f5": {
"value": "
18.\u00a0 \u00a0 Revenue and expenses
a)\u00a0 Net income
At 31 December 2021, the Group's revenue breakdown is as follows:
Income from services rendered
b)\u00a0 Other operating expenses
At 31 December 2021, the detail of \u201cOther operating expenses\u201d in the consolidated income statement
is as follows:
Non-recoverable expenses of leased properties
Costs associated with asset acquisitions and
financing
Losses on, impairment of and change in provisions
Other extraordinary items
c) Staff costs and average headcount
The detail of \u201cStaff costs\u201d at 31 December 2021 is as follows:
Wages, salaries and similar expenses
Other employee benefit costs
The average number of employees at the various Group companies in 2021 and 2020 was 226 and
222 respectively.
The detail of the headcount at 2021 and 2020 year-end, by category, is as follows:
80
2021
(*) Includes the Internal Audit Director.
2020
(*) Includes the Internal Audit Director.
The average number of employees at the Group in 2021 with a disability equal to or greater than 33%,
by category, was as follows:
In 2021, Finance costs include mainly the interest corresponding to the bank borrowings and
obligations detailed in the Note 14 amounting to EUR 19,752 thousand and EUR 89,330 thousand,
respectively (EUR 25,113 and 82,109 thousand respectively in 2020). The amounts above also include
amortisation of debt arrangement costs amounting to EUR 14,987 thousand (EUR 18,905 thousand in
2020), from application of the effective interest rate on financial debt (see Note 14.5), and the financial
costs associated with interest rate derivatives amounting to EUR 8,880 thousand (EUR 9,934
thousand in 2020).
e)\u00a0 Contribution to consolidated profit/loss
The contribution of each company included in the scope of consolidation to profit/loss for 2021 was as
follows:
:Merlin Properties SOCIMI, S.A.
Tree Inversiones Inmobiliarias, SOCIMI, S.A.
Merlin Log\u00edstica, S.L.
Varitelia Distribuciones, S.L.U.
La Vital Centro Comercial y de Ocio, S.L.
Global Carihuela Patrimonio Comercial, S.L.U.
Parques Log\u00edsticos de la Zona Franca, S.A.
Sevisur Log\u00edstica, S.A.
Promosete Invest. Inmobiliaria, S.A.
Pra\u00e7a do Marqu\u00e9s - Servicios auxiliares, S.A.
MPCVI - Compra e Venda Imobili\u00e1ria, S.A.
MPEP - Properties Escrit\u00f3rios Portugal, S.A
Forum Almada \u2013 Gestao Centro Comercial, Lda
Torre dos Oceanus Investimentos Inmobiliarios,S.A.
Torre Arts Investimentos Inmobiliarios,S.A.
Torre Fern\u00e3o Magalh\u00e3es Investimentos
Paseo Comercial Carlos III, S.A.
Centro Intermodal de Log\u00edstica, S.A.
Sicilius Real Estate SOCIMI S.A.
Distrito Castellana Norte, S.A.
",
"dimensions": {
"concept": "mer:DisclosureOfRevenueAndExpensesTextBlock",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjMxOGEwZjhkNjcyYjRkNmY4ZTczNmY4NDZjMzEyYTQ2L3NlYzozMThhMGY4ZDY3MmI0ZDZmOGU3MzZmODQ2YzMxMmE0Nl84NS9mcmFnOmYxNTUxZGJmZTk1NTRkYzNhZWYyZTYyNjVkN2QzMGIwL3RleHRyZWdpb246ZjE1NTFkYmZlOTU1NGRjM2FlZjJlNjI2NWQ3ZDMwYjBfNTYzNg_8c0cc6ef-201c-4ed5-9d61-4f18ae738b8c": {
"value": "
19.\u00a0 \u00a0 Related party transactions
Connected-party transactions are transactions carried out by the Parent Company or its subsidiaries
with directors, with shareholders holding 10 % or more of the voting rights or represented on the board
of directors of the Parent Company, or with anyone else considered to be connected parties within the
meaning of the International Accounting Standards, adopted pursuant to Regulation (EC) 1606/2002
of the European Parliament and of the Council of 19 July 2002 on the application of international
accounting standards.
At 31 December 2021, the detail of any significant transactions, given their amount or importance,
carried out between the Parent or its Group companies, and connected parties, is as follows:
83
2021
Banco Santander, S.A. (a)
Banco Santander, S.A. (a)
Banco Santander, S.A. (a)
Banco Santander, S.A. (b)
Banco Santander, S.A. (b)
P\u00ba Comer. Carlos III, S.A. (c)
Provitae Centros Asistenciales, S.L. (d)
Silicius Real Estate SOCIMI, S.A. (e)
G36 Developments S.L. (f)
.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjMxOGEwZjhkNjcyYjRkNmY4ZTczNmY4NDZjMzEyYTQ2L3NlYzozMThhMGY4ZDY3MmI0ZDZmOGU3MzZmODQ2YzMxMmE0Nl84OC9mcmFnOjFlODUyYmQ1ZGM1ODQwNmRhNzQ4MmZkN2IyNjhjNjJiL3RleHRyZWdpb246MWU4NTJiZDVkYzU4NDA2ZGE3NDgyZmQ3YjI2OGM2MmJfOTg5NTYwNDY1OTA5OQ_d9a6056a-e988-4696-a794-49bfbc549033": {
"value": "
20.\u00a0 \u00a0 Information on Directors
The Parent's directors and the parties related to it did not have any conflicts of interest that had to be
reported in accordance with section 229 of the revised text of the Corporate Enterprises Act.
Directors' compensation and other benefits
At 31 December 2021 and 2020, salaries, per diem attendance fees and any other type of
compensation paid to members of the Parent\u2019s managing bodies totalled EUR 6,523 thousand and
EUR 3,149 thousand, as detailed below
:Fixed and variable remuneration
Life and health insurance
(1) In 2020, Executive Directors waived their variable compensation
In addition to the above amounts and in relation to the variable remuneration for Executive Directors
corresponding to the prior years' bonuses, an amount of EUR 3,027 thousand was paid related to the
deferred amounts of the variable objectives for 2015 and 2018 in accordance with the terms set out in
those plans.
In this regard, there are accrued amounts pending payment associated with variable remuneration
targets for 2016 to 2019 in the amount of EUR 3,250 thousand and the amount of remuneration
corresponding to 2021 in the amount of EUR 2,700 thousand of which EUR 1,350 thousand are
recorded under non-current \"Provisions\" and EUR 1,350 thousand are recorded under \u2018Trade and
other payables\u2019 on the accompanying balance sheet, which will be disbursed in the short term.
86
Also, as indicated below in this Note, as members of the management team, the Executive Directors
are entitled to payment of a remuneration plan granted to the management team in 2017 for the
2017-19 period, which will be described below. Under that plan, the Executive Directors have been
paid EUR 979 thousand shares derived from 50% of the referenced amount based on compliance with
the incentive linked to increasing the Company's EPRA NAV.
According to the provisions of the extraordinary incentive, described below, the Executive Directors
have accrued an amount of EUR 750 thousand as an extraordinary incentive.
The Ordinary General Meeting of 17 June 2020 approved the appointment of Maria Ana Forner
Beltran and Ignacio Gil Casares Satrustegui as proprietary directors. The Board of Directors thus
consisted of 14 members on 31 December 2020. On 20 January 2021, Director John G\u00f3mez Hall
resigned.
The breakdown, by board member, of the amounts disclosed above is as follows:
Remuneration of board members
Javier Garc\u00eda-Carranza Benjumea
Chair - Proprietary director
Mar\u00eda Luisa Jord\u00e1 Castro
Juan Mar\u00eda Aguirre Gonzalo
Francisca Ortega Hern\u00e1ndez Agero
Emilio Novela Berl\u00edn
Mar\u00eda Ana Forner Beltr\u00e1n
Ignacio Gil Casares Satr\u00fastegui
(1) In 2020, Executive Directors waived their variable compensation
The Company has granted no advances, loans or guarantees to any of its directors.
The Parent's directors are covered by the \u201cCorporate Third-Party Liability Insurance Policies for
Directors and Officers\u201d taken out by the Parent to cover possible damages that may be claimed, and
that are evidenced as a result of a management error committed by its directors or executives, and
those of its subsidiaries, in discharging their duties. The premium amounted to an annual total of EUR
493 thousand (EUR 221 thousand in 2020).
Remuneration and other benefits of senior executives
The remuneration of the Parent's senior executives, including the Head of Internal Audit, excluding
those who are simultaneously members of the Board of Directors (whose remuneration is disclosed
above) in 2021 and 2020, is summarised as follows:
2021
Fixed and
variable
remuneration
2020
Fixed and
variable
remuneration
(1)\u00a0 In 2020, the Senior Management waived their variable compensation
In addition to the above amounts and in relation to the variable remuneration for Senior Management
corresponding to the prior years' bonuses, an amount of EUR 4,105 thousand was paid related to the
deferred amounts of the variable objectives for 2015 and 2018 in accordance with the terms set out in
those plans.
In this regard, there are accrued amounts pending payment associated with variable remuneration
targets for 2016 to 2019 in the amount of EUR 4,372 thousand and the amount of remuneration
corresponding to 2021 in the amount of EUR 4,085 thousand, which are recorded under \u2018Trade and
other payables\u2019 on the accompanying balance sheet.
Under that 2017-19 incentives plan, Senior Management have been paid EUR 806 thousand shares
derived from 50% of the referenced amount based on compliance with the incentive linked to
increasing the Company's EPRA NAV.
In fiscal year 2021, two members of Senior Management left the company. During the 2021 financial
year, they received fixed and variable remuneration of 242 thousand euros, as well as other
remuneration amounting to 3 thousand euros. In addition, they received an amount of EUR 3,870
thousand corresponding to the deferred amounts of the variable objectives for the fiscal years 2015,
2016, 2018 and 2019. There are no accrued amounts pending to be paid. Besides, in relation to the
remuneration plan associated with the 2017-2019 period, they have received 1,076 thousand gross
shares derived from the total amount accrued from the fulfilment of the incentive linked to the increase
in EPRA NAV in the period.
In accordance with the establishment of the Extraordinary Incentive, which is described below, the
Senior Management has accrued an amount of EUR 540 thousand as an extraordinary incentive.
In regards to the \u201cgolden parachute\u201d clauses for the Parent\u2019s Executive Directors and other Senior
Executives in the event of dismissal or takeover, these clauses provide for compensation that
represented a total commitment of EUR 9,400 thousand as of 31 December 2021.
Extraordinary incentive 2021
The General Shareholders' Meeting held on 27 April 2021 approved an extraordinary incentive for the
year 2021 linked to the fulfilment of a series of strategic objectives and with a maximum amount of one
time the fixed remuneration of the beneficiaries. The degree of compliance with this extraordinary
incentive was 37.5% and its overall amount is 2,737 thousand euros, the accrual of which has been
recorded under the heading \"Personnel expenses\" in the consolidated income statement. This
incentive will be paid in cash in April 2022.
2017-19 incentives plan
Also, at the General Meeting held on 26 April 2017, the shareholders approved a new remuneration
plan for the management team and other important members of the Group\u2019s workforce, the
measurement period of which is from 1 January 2017 to 31 December 2019 (the \u201c2017-19 Incentive
Plan\u201d). According to the plan, the members of the management team may be entitled to receive: (i) a
certain monetary amount in accordance with the increase of the share price and (ii) Parent Company
shares, if certain objectives are fulfilled.
Vesting of the incentive will independently be conditional upon the total rate of return obtained by the
shareholder during the three-year period due to:
\u2013The increase in the quoted price of the Parent's share plus the dividends distributed to
shareholders during the measurement period; and
\u2013The increase in the EPRA NAV per share of the Parent plus the dividends distributed to
shareholders during the measurement period;
For the right to the share-based incentive and to the EPRA NAV-based incentive to be vested, the total
shareholder rate of return (TSR) must be at least 24%.
TSR NAV / TSR share
price
Percentage assigned to
beneficiaries (\u201cPR\u201d)
Percentage assigned to
shareholders
The fees for financial audit services provided to the various companies composing the Merlin Group
and subsidiaries by the principal auditor, Deloitte, S.L., and entities related to the principal auditor and
other auditors is as follows:
Other audit-related services:
Total audit and related services
Services required by applicable regulations
cash flow interest rate risk. The Group's overall risk management programme is based on the
uncertainty of financial markets and aims to minimize the adverse effects of such risks on the financial
profitability of the Group.
Risk management is undertaken by the Group's Senior Management in accordance with the policies
approved by the Board of Directors. Senior Management identifies, evaluates and mitigates financial
90
risks in close collaboration with the Group's operating units. The Board of Directors issues the written
global risk management policies and the policies for specific areas, including those for covering
market risk, interest rate risk and liquidity risk and investing cash surpluses.
Market risk
Given the current status of the real-estate sector and in order to mitigate the effects thereof, the Group
has specific measures in place to minimize said impact on its financial position.
These measures are applied pursuant to the results of sensitivity analyses carried out by the Group on
a regular basis. These analyses involve:
\u2013The economic environment in which the Group operates: Designing different economic
scenarios and modifying the key variables potentially affecting the Group. Identifying interdependent
variables and the extent of their relationship; and
\u2013The time scale in which the assessment is being carried out: The time frame of the analysis
and its possible deviations will be taken into account.
MERLIN Properties is exposed to market risk from possible vacancies or renegotiations of leases
when the leases expire. This risk could have a direct negative impact on the valuation of the
Company's assets.
However, market risk is mitigated by the customer acquisition and selection policies and the
mandatory lease terms negotiated with customers themselves, as well as for the guarantees that the
Group holds associated with leasing contracts. Therefore, at 31 December 2021, the average
occupancy rate of the asset portfolio was 94.5%, with a weighted average unexpired lease term of 5.4
years (weighted by GRI).
Credit risk
Credit risk is defined as the potential risk of loss in earnings to which the Group is exposed if a
customer or counterparty breaches its contractual obligations.
As a general rule, the Group places cash and cash equivalents with financial institutions with high
credit ratings.
Except in the case of the BBVA branch leases, the Group is not exposed to significant concentration of
credit risk with one customer or counterparty. The Group regularly reviews the credit rating and thus
the creditworthiness of BBVA vis-\u00e0-vis the segment of bank branches leased to this bank. The Group
also pays close attention to this situation, since the finance held is dependent on credit quality being
maintained. The Parent's directors do not consider that there is any material credit risk regarding
receivables due from this tenant.
With respect to other customers, the Group has policies in place to limit the volume of risks posed by
customers. Exposure to the risk of being unable to recover receivables is mitigated in the normal
course of business through funds or guarantees deposited as collateral.
The Group has formal procedures to identify any impairment of trade receivables. Delays in payment
are detected through these procedures and individual analysis by business area and methods are
established to estimate impairment loss.
Details of the estimated maturities of the Group's financial assets in the consolidated statement of
financial position at 31 December 2021 are as follows. The tables present the results of the analysis of
those maturities of financial assets at 31 December 2021:
2021
Financial assets at fair value with changes in profit and
loss
Investments in associates
Trade and other receivables
Other current financial assets
Cash and cash equivalents
(*) not including derivatives
2020
Financial assets at fair value with changes in profit and loss
Investments in associates
Trade and other receivables
Other current financial assets
Cash and cash equivalents
(*) not including derivatives
Cash and cash equivalents
The Group has cash and cash equivalents of EUR 866,721 thousand, which represents its maximum
exposure to the risk posed by these assets.
Cash and cash equivalents are deposited with banks and financial institutions.
Liquidity risk
Liquidity risk is defined as the risk of the Group encountering difficulties meeting its obligations
regarding financial liabilities settled in cash or with other financial assets.
To manage liquidity risk and meet its various funding requirements, the Group uses an annual cash
budget and a monthly cash projection, the latter being detailed and updated daily. The factor causing
the liquidity risk is the working capital deficiency, which mainly includes short-term debt. At 31
December 2021, the Group\u2019s working capital amounted to EUR 301,813 thousand.
In addition, liquidity risk has the following mitigating factors, which should be highlighted: (i) the
generation of recurrent cash from the businesses in which the Group performs its activity; and (ii) the
capacity to renegotiate and obtain new financing facilities based on the Group's long-term business
plans and the quality of its assets.
At the date of preparation of the consolidated financial statements, taking into account the foregoing,
the Group had covered all its funding requirements to fully meet its commitments to suppliers,
employees and the authorities based on the cash flow forecast for 2022. Likewise, the type of sector in
which the Company operates, the investments it makes, the financing it obtains to make such
investments, the EBITDA they generate and the occupancy rates of the properties, enables the
liquidity risk to be mitigated and excess cash to be produced.
Any cash surpluses are used to make short-term investments in highly liquid deposits with no risk. The
acquisition of share options or futures, or any other high-risk deposits as a method of investing cash
surpluses, is not among the possibilities considered by MERLIN Properties for investing cash
surpluses.
Details of the Group's exposure to liquidity risk at 31 December 2021 are provided in the table below.
The tables below present the results of the analysis of gross financial liabilities, without considering
bonds issuances, by remaining contractual maturity date.
2021
Other non-current liabilities and guarantees
Trade and other payables (excluding payables to public
authorities)
2020
Other non-current liabilities and guarantees
Trade and other payables (excluding payables to public
authorities)
Cash flow interest rate risk and fair value risk
The Group manages its interest rate risk by borrowing at fixed and floating rates of interest. The
Group's policy is to ensure non-current net financing from third parties is at a fixed rate. To manage
this, the Group enters into interest rate swaps which are designated as hedges of the respective
loans. At 31 December 2021, the percentage of debt the interest rate of which is covered by the
aforementioned financial instruments was 100%. The impact of interest rate fluctuations is explained in
Note 14.3.
Exchange rate risk
The Group's policy is to borrow in the same currency as that of the cash flows of each business.
Consequently, currently there is no foreign currency risk. However, noteworthy in this connection are
the exchange rate fluctuations arising in translating the financial statements of foreign companies
whose functional currency is not the euro. At 31 December 2021, the functional currency of all
subsidiaries and associates of the MERLIN Group was the euro.
Tax risk
As mentioned in Note 1, the Parent and part of its subsidiaries are subject to the special tax regime for
Real Estate Investment Trusts (REITs). The transitional period of the Parent ended in 2017 and,
therefore, compliance with all requirements established by the regime (see Notes 1 and 5.13) became
mandatory. Some of the more formal obligations that the Parent must meet involve the inclusion of the
term SOCIMI (REIT) in its company name, the inclusion of certain information in the notes to its
separate financial statements, the share price on the stock market, etc., and other obligations that
require estimates to be made and judgements to be applied by management that may become fairly
complex, especially considering that the REIT regime is relatively recent and was developed by the
Directorate-General of Taxes mainly in response to the queries posed by various companies. The
Group\u2019s Management, based on the opinion of its tax advisors, assessed compliance with the
requirements of the regime, concluding that all those requirements were met at 31 December 2021.
Accordingly, and also for the purpose of taking into consideration the financial effect of the regime, it
should be noted that, as established in section 6 of Law 11/2009, of 26 October, amended by the
REITs Act, and in the percentages established in it, companies that have opted for the special tax
regime are required to distribute the profit generated during the year to their shareholders in the form
of dividends, once the related corporate obligations have been met. This distribution must be approved
within six months from each year-end, and the dividends paid in the month following the date on which
the pay-out is agreed (see Note 5.13).
If the Parent does not comply with the requirements established in the regime or if the shareholders at
the General Meetings of these companies do not approve the dividend distribution proposed by the
Board of Directors, calculated in accordance with the requirements of this Act, it would not be
complying therewith and, accordingly, tax would have to be paid under the general regime, not the
regime applicable to REITs.
Climate change management
Within the framework of the European Green Pact and the United Nations Sustainable Development
Goals, the Group is carrying out various initiatives in the field of sustainability.
Firstly, the Group's Parent Company, in 2021 has created a Sustainability, Ethics and Innovation
Committee reporting to the Board of Directors whose main competencies are to advise the Board of
Directors, among others, on environmental and sustainability matters; to advise the Board of Directors
in the formulation of the Group's sustainability strategy in its relations with stakeholders and in its
publication and public communication; and to supervise the communication and information to the
market of any information in which reference is made to sustainability issues and non-financial
information and to keep the ESG (Environmental Social and Governance) Risk map up to date.
In this sense, the Group has incorporated in its investment and financing policies decision factors
related to non-financial KPIs. Along these lines, the investment studies for real estate acquisitions and
investments in repositioning the Group's assets consider, among other factors, elements such as
obtaining energy efficiency certificates with the highest rating (see Note 7), air conditioning, lighting,
solar energy, irrigation of green areas, accessibility, etc.
When certifying assets, the Group selects the most appropriate framework and method depending on
the stage of the assets, as well as the characteristics of the building, its degree of occupancy at the
time of certification or the tenants occupying it.
In this regard, the process of certifying the portfolio under the standards of the leaders in this market,
BREEAM and LEED, continues, with the objective of reaching 99% of the portfolio. During the 2021
fiscal year, the Group has achieved certification or its renewal in 26 assets.
Additionally, the Group has obtained a rating of 81% in the 2021 GRESB edition, a platform that allows
harmonizing and comparing information related to sustainability criteria (environmental, social and
corporate governance - ESG) in real estate investments.
Thus, the Group has an Environmental Management System (EMS) certified according to ISO 14001,
which constitutes the umbrella under which it manages its portfolios and which incorporates new
properties into its perimeter on an annual basis.
In 2015, the Group initiated a plan for ISO 14001 (environmental management) and ISO 50001
(energy management) certifications, to maintain and expand the number of real estate assets that
have at least ISO 14001, and subsequently ISO 50001 (understanding it as a natural step to achieve
the ISO 14001 standard prior to aspiring to ISO 50001).
This plan covers office buildings as well as shopping centers and logistics warehouses. Regarding ISO
14001, 84 certified buildings were achieved in 2021, with a surface area of 1,141,317 m2.
The Group has also continued the process of implementing an Energy Management System under the
ISO 50001 standard initiated in 2017, with 81 buildings currently certified, which have a surface area
of 1,072,765m2, 17 more than in 2020.
Additionally, during the 2021 financial year, the Group has carried out an analysis of the entire portfolio
to determine the carbon footprint of each of its assets, as well as the necessary measures to reduce
the referred carbon footprint to its minimum expression.
In the assets included in the Energy Management System under the ISO 50001 standard, there is a
target of reducing total energy consumption by 5% with respect to 2019, based on the implementation
of ESMs (energy saving measures).
Likewise, the Group's financing policies are sensitive to the savings premiums currently offered by the
capital market linked to the performance of certain sustainability indicators. Currently 15% of the
Group's debt with credit institutions and bondholders is linked to compliance with ESG indicators (see
Note 14).
These financings include a cost adjustment mechanism based on management indicators calculated
based on four sustainability criteria, measurable on an annual basis. At the end of 2021 the Group
complies with the indicators established in these contracts and the Directors estimate that they will
also be complied with in 2022.
The indicators for the 2021 fiscal year were:
1. Investment of at least \u20ac2.2 million in energy efficiency improvements across the portfolio.
2. Achievement of at least 5 LEED and BREEAM external energy certifications with a
minimum rating of Silver LEED and Good BREEAM, respectively
3. Obtaining at least 9 AIS/DIGA certifications for handicapped access for all tenants and
consumers.
4. Electricity consumption of at least 40 GW from renewable energy sources.
Additionally, the Group in its commitment to climate responsibility, has incorporated qualitative factors
related to the Group's sustainability strategy into the short-term variable compensation measurement
targets for its staff and management team (see Note 20).
In addition, during 2021, the Group has applied to adhere to 11 objectives of the United Nations
Sustainable Development Goals.
Finally, the Group has also made progress in reworking its sustainability policy, which will be
articulated around 3 main pillars: (i) fight against climate change, (ii) well-being of tenants and users of
the spaces and (iii) impact on the cities and society in which the Group operates.
All of the above will form part of the Group's path to net zero or commitment to the fight against
climate change.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjMxOGEwZjhkNjcyYjRkNmY4ZTczNmY4NDZjMzEyYTQ2L3NlYzozMThhMGY4ZDY3MmI0ZDZmOGU3MzZmODQ2YzMxMmE0Nl8xMDAvZnJhZzozMDUyZGQzN2UyYzI0NWNjYTFlZTA3MmUyODFiZGI1ZC90ZXh0cmVnaW9uOjMwNTJkZDM3ZTJjMjQ1Y2NhMWVlMDcyZTI4MWJkYjVkXzk4OTU2MDQ2NTA0Nzg_bd835a29-15f1-436d-8936-b901800f7db5": {
"value": "24.\u00a0 \u00a0 Events after the reporting period
On 23 February, the Group repaid EUR 548.3 million corresponding to the bond maturing on 23 May
2022. This transaction was paid out from available cash, obtained mainly by issuing EUR 500 million
in bonds in June 2021.
",
"dimensions": {
"concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
},
"id3VybDovL2RvY3MudjEvZG9jOjMxOGEwZjhkNjcyYjRkNmY4ZTczNmY4NDZjMzEyYTQ2L3NlYzozMThhMGY4ZDY3MmI0ZDZmOGU3MzZmODQ2YzMxMmE0Nl8xMDMvZnJhZzo2ZGMwM2EyZmQyZTk0ZTdmYWZlMzE2NjgzMjRlZTU0Mi90ZXh0cmVnaW9uOjZkYzAzYTJmZDJlOTRlN2ZhZmUzMTY2ODMyNGVlNTQyXzM3OA_0085abe9-30f5-48bd-8e25-40bfd5e22b18": {
"value": "
25. Explanation added for translation to English
These financial statements are presented on the basis of the regulatory financial reporting framework
applicable to the Company in Spain (see Note 2.1). Certain accounting practices applied by the Group
that conform with that regulatory framework may not conform with other generally accepted
accounting principals and rules.
",
"dimensions": {
"concept": "mer:ExplanationAddedForTranslationToEnglishTextBlock",
"language": "en",
"entity": "scheme:959800L8KD863DP30X04",
"period": "2021-01-01T00:00:00/2022-01-01T00:00:00"
}
}
}
}