Merlin Properties SOCIMI S A : 6M 2021 Executive Summary

6M21 RESULTS

Trading Update

CONSOLIDATED PERFORMANCE

(2.2%)			(€ million)	6M21	6M20	YoY
Gross rents like-for-like YoY
	Total revenues	252.7	259.4	(2.6%)
(3.8%)			Gross rents	248.5	256.6	(3.2%)
	FFO per share YoY		Gross rents after	219.8	221.2	(0.6%)
				incentives
+0.6%
		Net rents after propex	196.1	198.7	(1.3%)
		& collection losses
	NTA per share YTD		Gross-to-net margin(1)	89.2%	89.8%
				EBITDA(2)	179.2	184.1	(2.7%)
• Covid-19 rent reliefs to tenants amount to € 19.6m		Margin	72.1%	71.8%
	in the period, recorded as a one-off expense (not
	straight lined)		FFO(3)	129.2	134.3	(3.8%)
• FFO per share of € 0.27, 3.8% decline compared		Margin	52.0%	52.3%
	to 6M20. We reconfirm the guidance for 2021		AFFO	124.4	125.4	(0.8%)
	(€ 0.56 per share)		Net earnings	190.3	70.9	+168.3%
• Flat valuation (+0.5% LfL vs FY20). Offices and
	net leases resilient. Logistics up. Shopping centers		(€ per share)	6M21	6M20	YoY
	and hotels down. NTA per share stands at € 15.55
		FFO	0.27	0.29	(3.8%)
	(+0.6% vs FY20) after paying a € 0.30 dividend		AFFO	0.26	0.27	(0.8%)
	during the semester
				EPS	0.41	0.15	+168.3%
				EPRA NTA	15.55	15.46	+0.5%

BUSINESS PERFORMANCE

(2.9%)		+1.0%	(2.0%)
	Offices	Logistics	S. Centers
Rents like-for-like YoY
+6.8%		+3.3%	+5.9%
	Offices	Logistics	S. Centers
	Release spread
	+56 bps			93.7%

Occupancy vs 31/03/2021

• Offices: 173,457 sqm contracted.

LfL of (2.9%) and release spread of +6.8%

• Logistics: 191,072 sqm contracted.

LfL of +1.0% and release spread of +3.3%

• Shopping centers: 16,271 sqm contracted. LfL of (2.0%) and release spread of +5.9%

1. Net of incentives
2. Excludes non-overhead costs items (€ 1.7m) plus LTIP accrual (€ 5.6m)
3. FFO equals EBITDA less net interest payments, less minorities, less recurring income taxes plus share in earnings of equity method
4. Portfolio in operation for the 6M20 (€ 244.7m of GRI) and for the 6M21 (€ 239.3m of GRI)

6M21	Contracted	Rent	Leasing	Occ. vs
activity	31/03/21
	sqm	€ m	Lfl	Release	Bps
	change	spread
Offices	173,457	111.5	(2.9%)	+6.8%	(20)
Logistics	191,072	32.2	+1.0%	+3.3%	+151
Shopping	16,271	57.2	(2.0%)	+5.9%	+42
centers
Net leases	n.a.	43.0	(0.1%)	n.m.	0
Other	n.a.	4.5	n.m.	n.m.	0
Total	380,800	248.5	(2.2%)		+56

Gross rents bridge

(€m)	LfL(4)
	(2.2%)
256.6			248.5
	(5.4)	(2.7)
6M20	Like-for-Like	Balance	6M21
	growth	acquisitions,
		disposals, other

MERLIN Properties	6M21 RESULTS Trading Update

OFFICES

Gross rents bridge						Rents breakdown
(€m)
				LfL(1)								Gross rents	Passing rent	WAULT
			(2.9%)
														6M21 (€ m)	(€/sqm/m)	(yr)
	118.0								111.5
									Madrid	79.2	18.2	3.2
			(3.2)		(3.3)
													Barcelona	18.9	18.3	2.6
												Lisbon	11.8	19.8	5.3
		6M20	Like-for-Like	Balance	6M21
				growth	acquisitions,				Other	1.5	10.9	5.0
							disposals, other
													Total	111.5	18.2	3.4

Leasing activity

• LfL rental decrease in the period (-2.9%) as the positive release spread does not offset the increased vacancy and negative indexation in Q1
• 6M21 leasing activity highlights:
• • 43,515 sqm renewal with Técnicas Reunidas in Adequa, Madrid
  • 22,451 sqm new lease with BPI in Monumental, Lisbon
  • 12,789 sqm new lease with Accenture and Elecnor in Castellana 85, Madrid
  • 8,595 sqm new lease with Inetum in PE Sanchinarro, Madrid

						LTM
sqm	Contracted	Out	In	Renewals(2)	Net
Release spread	# Contracts
Madrid	117,576	(57,870)	34,982	82,594	(22,888)	+4.3%	110
Barcelona	23,014	(10,151)	9,150	13,864	(1,001)	+14.7%	36
Lisbon	32,867	(7,183)	31,885	982	24,702	+24.6%	14
Total	173,457	(75,204)	76,017	97,440	813	+6.8%	160

Occupancy

• The occupancy is already stabilizing
• We expect the market to recover during 2H21 and reconfirm our guidance for FY21 occupancy
• Monumental and Castellana 85 have been added back to the stock upon delivery (both fully occupied)
• By markets, best performer this quarter has been Barcelona Prime

	Stock		1,212,143 sqm
	WIP			109,117 sqm
	Stock incl. WIP	1,321,260 sqm
	Occupancy rate(3)
				Change bps
	6M21	3M21
Madrid	86.8%	87.0%	(25)
Barcelona	91.6%	93.1%	(143)
Lisbon	99.5%	99.3%	+14
Other	100.0%	100.0%	-
Total	89.1%	89.3%	(20)

1. Office portfolio in operation for 6M20 (€ 109.7m of GRI) and for 6M21 (€ 106.5m of GRI)
2. Excluding roll-overs
3. MERLIN policy excludes buildings under complete refurbishment. Buildings excluded this period are Plaza Ruiz Picasso, Arturo Soria 343, Plaza Cataluña 9, Pere IV, Avenida de Burgos 208, Atica 1, PE Cerro Gamos 5 and Adequa 2

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MERLIN Properties	6M21 RESULTS Trading Update

OFFICES(CONT.)

INVESTMENTS, REFURBISHMENTS AND DEVELOPMENTS

LANDMARK I

WIP	GLA (sqm)	Scope	Budget	Delivery	YoC

LET	100%

Castellana	16,474	Full refurb	€ 34.8m	Delivered	8.1%
85

LET	100%

Monumental

25,358

Full refurb € 34.8m Delivered

9.4%

-LET	28%
PRE

Plaza Ruiz	36,899(1)	Full refurb	€ 57.5m	3Q23	10.4%
Picasso

1. Post refurbishment

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MERLIN Properties	6M21 RESULTS Trading Update

LOGISTICS

Gross rents bridge

Rents breakdown

(€m)

LfL(1)

Gross rents

Passing rent

WAULT

6M21 (€ m)

(€/sqm/m)

(yr)

+1.0%

28.8

+0.3

+3.1

32.2

Madrid

20.0

4.0

3.9

Barcelona

5.5

6.1

2.5

Other

6.7

3.7

2.6

6M20

Like-for-Like

Balance

6M21

Total

32.2

4.2

3.4

growth

acquisitions,

disposals, other

Leasing activity

• Logistics continues delivering a good performance, both organic (rental LfL +1.0% despite occupancy dip in Q1) and inorganic through Best II & III deliveries
• +3.3% release spread
• 6M21 leasing activity highlights:
• • 20,723 sqm new lease with Truck and Wheel in A2-Cabanillas Park I F
  • 18,947 sqm new lease with Olicargo and Rangel in Lisbon Park
  • 5,050 sqm new lease with Grupo Mox in A2-San Fernando II
  • 2,549 sqm renewal with Zimmer Biomet in Barcelona-PLZF

						LTM
sqm	Contracted	Out	In	Renewals	Net
Release spread	# Contracts
Madrid	151,238	(22,817)	151,238	-	128,421	+0.3%	4
Barcelona	8,900	(8,802)	6,351	2,549	(2,451)	+9.0%	2
Other	30,934	(26,292)	26,614	4,320	322	+22.7%	5
Total	191,072	(57,911)	184,203	6,869	126,292	+3.3%	11

Occupancy

• Substantial occupancy increase (+151 bps vs 3M21) after reletting on a long term basis spaces let in 2020 on a temporary basis
• All Best II & III delivered assets are 100% let. Two pre-lets have been signed during the quarter with DSV and Logista totalling >90k sqm in Cabanillas Park I J & Cabanillas Park II
• Cilsa (ZAL Port) has delivered a 95,987 sqm turn-key warehouse to Decathlon

Stock	1,339,718 sqm
WIP(2)	790,157 sqm		Occupancy rate
Best II	332,166 sqm		6M21	3M21	bps
Best III	435,482 sqm
Madrid	97.9%	95.2%	+263
A4-Getafe (Data Center)	22,508 sqm
Stock incl. WIP	2,129,875 sqm	Barcelona	91.7%	93.2%	(153)
ZAL Port	728,163 sqm	Other	93.9%	93.9%	0
ZAL Port WIP	8,168 sqm
Stock managed	2,866,206 sqm	Total	96.2%	94.7%	+151

1. Logistics portfolio in operation for 6M20 (€ 27.8m of GRI) and for 6M21 (€ 28.1m of GRI)
2. WIP includes in progress Best II & III and A4-Getafe Data Center

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MERLIN Properties	6M21 RESULTS Trading Update

LOGISTICS (CONT.)

INVESTMENTS, REFURBISHMENTS AND DEVELOPMENTS

Best II (as from 30/06/2021)

	GLA (sqm)	ERV (€m)	Investment (€m)	ERV YoC
Delivered(1)	255,660
A4-Pinto II	29,473	1.2	13.7	8.6%
A2-Cabanillas III	21,879	0.9	11.8	7.8%
A2-Cabanillas Park I F	20,723	0.9	10.8	7.9%
A2-Cabanillas Park I G	22,506	0.9	13.5	6.9%
A4-Seseña	28,731	1.2	15.5	7.7%
A2-Azuqueca II	98,757	4.4	54.7	8.1%
A2-San Fernando II	33,592	1.9	22.1	8.5%
In progress	117,891
A2-Cabanillas Park II	47,403	2.1	25.7	8.1%
A2-Cabanillas Park I H-J	70,488	2.9	42.5	6.9%
Landbank	214,275
A2-Cabanillas Park II	163,275	7.1	88.5	8.1%
A2-Azuqueca III	51,000	2.3	30.1	7.7%
Total	587,827	25.8	328.9	7.8%

Best III (as from 30/06/2021)

	GLA (sqm)	ERV (€m)	Investment (€m)	ERV YoC
Delivered(1)	62,519
Valencia-Ribarroja	34,992	1.9	26.3	7.2%
Sevilla ZAL WIP	27,528	1.4	11.9	12.0%
In progress	60,095
Sevilla ZAL WIP	15,122	1.6	18.0	9.0%
Lisbon Park	44,973	2.1	29.5	7.1%
Landbank	375,387
Lisbon Park	179,891	8.4	118.1	7.1%
Madrid-San Fernando III	98,924	5.1	54.9	9.3%
Valencia	96,572	4.4	56.2	7.8%
Total	498,002	24.9	314.9	7.9%

1. Reclassified as part of the existing stock

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