2020 annual report
annual 2020 report 2020 has once again proven the benefits of a diversified portfolio and the resilience of MERLIN Properties business model. Letter from the Chairman 06
01 02 Organization Business and structure performance 11 18
03 04 Investments, Portfolio divestments valuation and capex 28 34 05 06 Financial Events statements post-closing 38 46 07 08 EPRA Stock Exchange 2020 metrics evolution 48 50 annual report 09 10 Dividend Treasury policy shares 54 56 11 12 Outlook / R+D Sustainability information / others 58 60
APPENDIX 13 EPRA metrics Reconciliation of the alternative List Staff calculation performance measures of assets 70 81 85 88 Dear shareholders,
It is my pleasure to present to you MERLIN Properties’ 2020 Annual Report, which includes the annual financial statements and all of the information relevant to the 2020 fiscal year.
2020 will go down in history as the year of the Covid-19 pandemic outbreak. It has been a very complicated year, with unprecedented consequences in the economic environment. According to the last OECD report, the estimated fall in GDP for Spain for the year is 11.6%.
Mr. Javier García-Carranza Non-Executive Chairman In this context, the Company after a first quarter that exhibited very compelling figures, had to quickly adopt a series of measures focused on capital Letter from the Chairman preservation and helping our tenants, measures that meant Letter from the revising the forecast for the year.
Chairman On one hand and in order to preserve capital, our value creation plans Landmark, Flagship and Best II & III were revised and all projects were put on hold except the ones already initiated or with pre-lets secured. Additionally, the 2019 complimentary dividend was reduced, and the Board of Directors and the management team lowered their compensation.
On the other hand, MERLIN was the first player in the market to launch a commercial policy in order to protect and support their tenants, reaching an extraordinary level of acceptance of 92%. This policy, consisting of different rent reliefs depending on the restrictions arising from the pandemic, has ensured occupancy, extending lease maturities until at least 2021, reduced default and litigation to a minimum and has | 7
essentially reinforced MERLIN’s reputation having maintained the level of rents at the and the loyalty of its tenant base. expense of a slight drop in occupancy, ending the year at 91.1%. The quality of the Furthermore, MERLIN was able to measure portfolio and the solvency of our tenants the Covid-19 impact for their 2020 figures have helped withstand the year. Logistics and was the first player in the market to has surpassed shopping centers, boosted give an updated guidance, which meant a by the pandemic-driven growth in online €55 million reduction in FFO, to the revised sales. MERLIN is the undisputed leader in figure of €250 million (€0.53 per share), the Iberian Peninsula, being the top-of-mind versus the initial target of €305 million solution provider for the largest operators (€0.65 per share). At year end, the Company in the sector. With €58.9 million of gross was able to beat the guidance provided rents in the period, the logistics portfolio to the market at the beginning of the has maintained a virtually full occupancy of pandemic, achieving an FFO of €262 million 97.5% and an increase in rents. Net leases, (€0.56 per share). our triple net portfolio, that includes the branches let to BBVA has been the safe haven of the period: €86 million in rents and full occupancy. As a result of the measures adopted, MERLIN has managed The worst part of this crisis has been borne to keep the robustness of its by shopping centers, heavily affected by lockdowns and severe restrictions all across balance sheet practically intact. the portfolio, impacting tenants’ sales with a 37% drop compared to the previous year. Thanks to the aforementioned commercial In this context, it is worth highlighting: policy, granting rent reliefs to our tenants, we have maintained the OCR at sustainable • Solvency. €5,268 million of net financial levels of 12.9%, very similar to the one debt at year end, with an average before the pandemic outbreak. Out of the maturity period of 6 years, with no €114.4 million in gross rents, €40.7 million maturities until May 2022. The LTV corresponded to rent reliefs, amounting to stands at 39.9% in line with FY19. €73.7 million of net rents.
• Liquidity. The Company enjoys a cash The Company has made significant progress and equivalents position of €467 million in terms of sustainability in 2020, improving and an undrawn credit facility that in energy efficiency measures in the amounts to €700 million. portfolio as it moves forward with its LEED/ BREEAAM certification program. Moreover, • Credit rating. After the pandemic in 2020 important initiatives were launched: outbreak and the announcement to the installation of photovoltaic solar panels the market of the Covid-19 impact on on the rooftops across the portfolio, the the 2020 accounts, Standard & Poors urban regeneration plan of AZCA, called and Moody’s revised their financial RENAZCA and in sustainable mobility, the projections and their credit models for last mile logistics project and the installation MERLIN. Both agencies have maintained of electric vehicles chargers in our parking their ratings in line with 2019. spaces. This effort has been recognized by GRESB, which has awarded the Company a By business segments, offices has score of 78%, above its peers, and by EPRA, weathered well the complicated situation. which awarded the MERLIN CSR Report the Gross rents amounted to €233 million, Gold Award in sustainability. 8 | Annual Report | 2020
Conscious of the increasing importance of sustainability in the Company, we have decided to create a commission within the Board, the Sustainability Commission, to promote and guide environmental, social and innovation initiatives in the Company.
In MERLIN Properties, we have always worked having all of our stakeholders at heart, shareholders and investors, clients, suppliers and employees, and we are convinced that the success of a company is based in finding the right balance between all of them and that our work as a company results in a benefit for society at large. In this regard, the Board of Directors approved the Company’s purchase of eight state-of-the- art robots for PCR diagnostic tests for the detection of Covid-19.
Additionally, we have proposed the reduction of the Board of Directors to 13 members, following the departure of Mr. John Gómez Hall, for personal reasons. I would like to take this opportunity to thank Mr. Gómez Hall for his excellent work over the years and his contribution to the improvement of the Company in every aspect.
Finally, we face a 2021 still very much affected by the pandemic but we approach it with the serenity that comes from a robust balance sheet and a strong liquidity position. MERLIN’s diversification helps to offset risks, the portfolio counts with a sound quality and the lease maturity profile below 10% for 2021, allows us to tackle this year with tranquility.
Once again I want to thank the shareholders of MERLIN Properties for their confidence and support, without which none of this would be possible.
Many thanks. AT A GLANCE 2020 tested the advantages of diversification and the resiliency of our business model. Key financial and operating metrics such as LfL rental income (+0.4% YoY) and occupancy (94.2% -57 bps YoY) remained in line with FY19. Cash flow generation (€ 262.4m FFO, -16.2% YoY) better than expected but was impacted by Covid-19 rent reliefs and non-core disposals
GRI AND INCENTIVES Top line resilience. Net rents impacted by the commercial policy in retail GRI GRI + INCENTIVES 526 503 € 503m (-4.3% YoY) 469 500 351 474 512 GRI 453 441 € 441m (-13.8% YoY) GRI after incentives 2016 2017 2018 2019 2020
FFO / AFFO
FFO per share exceeded the updated guidance. FFO ps AFFO ps Decrease vs FY19 due to Covid-19 rent reliefs and non core disposals 0.67 0.60 0.62 0.61 € 262m or € 0.56 ps (-16.2% YoY) 0.65 0.56 FFO 0.58 0.58 0.53 € 248m or € 0.53 ps (-18.4% YoY) AFFO 2016 2017 2018 2019 2020
NAV AND NTA EPRA NTA still on positive growth € 15.46 (+0.5% YoY) EPRA NAV EPRA NTA 15.60 15.68 14.81 15.39 15.46 EPRA NTA per share increase +0.5% 13.25 GAV increase (with capex) 11.23 (0.6%)
LfL GAV increase 2016 2017 2018 2019 2020
FINANCIAL DEBT Leverage and cost in line with 2019 of debt Loan to Value Cost of debt (hedged)
39.9% 45.5% Loan to Value(1) 43.6% (1) 1.80% spot (2.12% hedged) 40.7% 39.5%(2) 39.9% 2.26% 2.23% Cost of debt 2.13% 2.09% 2.12%
(1) 41.1% excluding transfer costs (2) 40.6% excluding transfer costs 2016 2017 2018 2019 2020 Organization 01 and structure | 11
Organization and structure
Strategy
MERLIN Properties Socimi, S.A. (“MERLIN”, the acquisition, active management and “MERLIN Properties” or the “Company”) selective rotation of high quality commercial is a company devoted to delivering real estate assets in the “Core” and “Core sustainable return to shareholders through plus” segments.
1 2 3 4 5 Core Investment Dividend One of the Best & Core Plus grade policy: world’s most governance Spain & capital 80% of cost efficient practices Portugal structure AFFO REIT’s
50% 20% 15% 15% Offices Logistics Shopping Net leases • Breadth of prime • National footprint centers • High triple net cash flow space in Madrid, • “One-stop shop” • Urban or dominant Barcelona solution for 3PL • National scale • Inflation multiplier and Lisbon 12 | Annual Report | 2020
Positioning
#1 #1 To p 5 #1 Offices Logistics Shopping Net leases Centers • Flexibility to offer • “One-stop-shop” • Mainly urban footprint • Excellent conditions of multitenant or solution for logistics in high GDP/ capita BBVA lease agreement headquarter buildings. operators wishing to areas in Spain. triple net lease with 1.5x • Capacity to adapt to operate across Spain. • Critical mass with HICP annual uplift. the needs of the tenant. • Big footprint to retail brands. match the rapid development of 3PL activity.
Existing
122 ASSETS 51 ASSETS 14 ASSETS 696 ASSETS 1.330k SQM 1.222k SQM 462k SQM 351k SQM
(1) € 6.322m GAV € 1.032m GAV € 2.207m GAV € 1.846m GAV € 233m GRI € 60m GRI € 112m GRI € 86m GRI
WIP 11 ASSETS
Full Consolidation 937k SQM € 558m GAV € 44m GRI
(2) Zal Port 48,5% Tres Aguas 50% 52 ASSETS 1 ASSET 632k SQM 68k SQM (+103k SQM WIP) € 8m GRI € 60m GRI(3) Equity method (+€8m GRI WIP)(3)
(1) FY20. (2) Data for minority stakes are reported for 100% of the subsidiary. (3) Gross annual rent as of 31/12/20, pre ground lease expenses. | 13
Composition
The internal management organization structure • Chief Executive Officer: reporting directly to the can be summarized as follows: Board of Directors and forming part of it.
• Board of Directors: consisting of thirteen directors, • Investment Committee: reporting to the CEO and advised by the Audit and Control Committee, consisting of the executive team. the Appointments Committee and the Remuneration Committee.
Javier García-Carranza Non-Executive Chairman Ismael Clemente Ignacio Gil-Casares CEO & Executive Vice-Chairman
María Ana Forner Miguel Ollero
Francisca Ortega Juan María Aguirre Chairman A&C Committee
Donald Johnston III María Luisa Jordá Chairman Remuneration Committee
Emilio Novela(1) Ana García Fau
Fernando Ortiz Pilar Cavero Chairman Appointments Committee
Independent Directors Executive Directors Mónica Martín de Vidales Proprietary Directors Secretary Ildefonso Polo del Mármol Audit and Control Committee Vice-Secretary Appointments Committee Remuneration Committee
Treasury stock Capital structure key data 1.0% Autocartera Blackrock Number of ordinary shares 469,770,750 4.0% Blackrock Number of weighted shares 469,770,750 Nortia Capital Nortia Capital Investment Investment Total equity (€m) 6,696 6.3% Banco Santander GAV (€m) 12,811 Banco Santander Free Float Net debt (€m) 5,268 24.5% Net debt / GAV 39.9% Free Float 64.2%
(1) Coordinator Director. 14 | Annual Report | 2020
Board of Directors
4 5 13 14 7 8 9 10 11 12
6 2 1 3 | 15
1. Non-Executive Chairman 6. Propietary Director 11. Independent Director Javier García Carranza Ana Forner Beltrán Chairman A Committee Pilar Cavero 2. CEO & Executive 7. Propietary Director Independent Director Vice-Chairman Francisca Ortega 12. Ana García Fau Ismael Clemente 8. Independent Director 13. Propietary Director 3. Executive Director Emilio Novela Ignacio Gil-Casares Miguel Ollero 9. Secretary 1 4. Independent Director 4. Vice-Secretary Mónica Martín de Vidales Chairman A&C Committee Ildefonso Polo 10. Independent Director Juan María Aguirre 5. Independent Director Chairman R Committee Independent Director Fernando Ortiz María Luisa Jordá Donald Johnston III 16 | Annual Report | 2020
Management Team
6 7
3 4 5 1 2 8 9 | 17
1. CEO 4. Director 7. Director Ismael Clemente Fernando Ramírez Luis Lázaro 2. COO 5. Director 8. Director Miguel Ollero Manuel García Casas Inés Arellano 3. Director 6. Director 9. Director Miguel Oñate Francisco Rivas Fernando Ferrero Business 02 Performance | 19
Business performance
GAV PER ASSET CLASS(1) GROSS RENTS PER ASSET CLASS(2)
6.1% 2.1%
11.6% 50.3% 11.7% 46.3%
14.4% 17.2%
17.5% 22.7%
Offices Logistics Shopping centers Net leases Other
GROSS YIELD PER ASSET CLASS
5.6%
5.0% 4.7% 4.5% MERLIN 4.1% 3.0% Average
Offices Logistics Shopping centers Net leases Other
OCCUPANCY AND WAULT (YEARS) PER ASSET CLASS
97.5% 99.7% 94.2% 93.7% MERLIN 91.1% Average 17.4 72.1%
5.4 3.0 3.4 3.5 MERLIN 2.4 Average
Offices Logistics Shopping centers Net leases Other
(1) GAV of land under development and NAV of equity method included in its respective category (offices, shopping centers and logistics). (2) Gross annualized rent on full consolidated assets. 20 | Annual Report | 2020
RENTS
Gross rents in the period amount to € 503,448 thousand with respect to € 525,918 thousand in FY19.
GROSS RENTS BREAKDOWN
FY20 FY19 YoY
Offices 233,215 243,431 (4.2%)
Logistics 58,848 53,796 +9.4%
Shopping centers 114,374 127,300 (10.2%)
Net leases 86,513 86,962 (0.5%)
Other 10,498 14,429 (27.2%)
Total 503,448 525,918 (4.3%)
AVERAGE PASSING RENT (€/SQM/MONTH)
21.4 21.3 19.9 20.5 17.5 17.7
4.2 4.2
FY19 FY20 FY19 FY20 FY19 FY20 FY19 FY20
Offices Logistics Shopping centers Net Leases | 21
Aggregate gross rents have increased by 0.4% on a like-for-like basis. Per asset category, the like-for-like evolution is shown below.
LIKE-FOR-LIKE INCREASE
2.2% 1.8%
1.2%
0.4% Average MERLIN
(1.2%) Offices Logistics Shopping centers Net leases
Bridge of FY19 gross rents to FY20, for MERLIN and by asset category:
MERLIN Offices (€m) (€m) LfL(1) LfL(2) +0.4% +2.2%
+1.9 525.9 503.4 (24.4)
243.4 +4.9 233.2 (15.1)
FY 2019 Like-for-Like Balance FY 2020 FY 2019 Like-for-Like Balance FY 2020 growth acquisitions, growth acquisitions, disposals, other disposals, other
Logistics Shopping centers (€m) (€m)
LfL(4) LfL(3) +1.8% (1.2%)
+1.0 +4.1 58.9 53.8 127.3 114.4 (1.4) (11.5)
FY 2019 Like-for-Like Balance FY 2020 FY 2019 Like-for-Like Balance FY 2020 growth acquisitions, growth acquisitions, disposals, other disposals, other (1) Portfolio in operation for FY19 (€ 485.2m of GRI) and for FY20 (€ 487.1m of GRI). (2) Office portfolio in operation for FY19 (€ 220.5m of GRI) and for FY20 (€ 225.4m of GRI). (3) Logistics portfolio in operation for FY19 (€ 52.3m of GRI) and for FY20 (€ 53.2m). (4) Shopping centers portfolio in operation for FY19 (€ 113.3m of GRI) and for FY20 (€ 111.9m of GRI). 22 | Annual Report | 2020
OCCUPANCY
Stock G.L.A. of MERLIN as of 31 December 2020 amounts to 3,313,314 sqm. Stock as of 31 December 2019 amounted to 3,303,736 sqm, resulting in a net increase of the stock during the period of 9,579 sqm. Occupancy rate as of 31 December 2020 is 94.2%(1).
31/12/2020 31/12/2019 Change YoY Bps
Offices Total G.L.A. (sqm)(1) 1,191,825 1,193,364 G.L.A. occupied (sqm) 1,085,511 1,106,939 Occupancy rate (%) 91.1% 92.8% (168)
Logistics Total G.L.A. (sqm) 1,221,716 1,160,289 G.L.A. occupied (sqm) 1,191,574 1,133,278 Occupancy rate (%) 97.5% 97.7% (14)
Shopping centers Total G.L.A. (sqm) 461,714 500,056 G.L.A. occupied (sqm) 426,134 461,073 Occupancy rate (%)(2) 93.7% 93.3% + 47
Net leases Total G.L.A. (sqm) 350,542 362,509 G.L.A. occupied (sqm) 349,509 362,509 Occupancy rate (%) 99.7% 100.0% (29)
Other Total G.L.A. (sqm) 87,517 87,517 G.L.A. occupied (sqm) 63,107 63,107 Occupancy rate (%) 72.1% 72.1% -
MERLIN Total G.L.A. (sqm) 3,313,314 3,303,736 G.L.A. occupied (sqm) 3,115,835 3,126,907 Occupancy rate (%)(2) 94.2% 94.8% +8
(1) MERLIN policy excludes buildings under complete refurbishment. Buildings excluded this period are Plaza Ruiz Picasso, Castellana 85, Monumental, Arturo Soria 343, Plaza Cataluña 9, Pere IV and Adequa (2 land plots for development). (2) Excluding vacant units acquired under refurbishment (7,162 sqm in FY20 and 5,763 sqm in FY19). | 23
TENANTS
MERLIN enjoys a high quality tenant base, (plus an additional 16.1% from BBVA), while broadly diversified. Top 10 tenants represent top 20 tenants represent a 26.5% of gross a 17.6% of the gross annualized rents annualized rents (excluding BBVA).
Years Tenant as tenant
BBVA 12
Endesa 18
To p Inditex 30 - 2 0 % Técnicas 17.6 t 15 GRI e Reunidas n a
n
Comunidad t
16 s de Madrid
PWC 11
Indra 19 26.5% GRI Hotusa 20
Caprabo 29
16.1% FNAC 24 GRI
LEASING ACTIVITY
Since the beginning of 2020, or since the MERLIN has signed lease agreements acquisition date for the assets acquired amounting to 449,930 sqm, out of which during the year, until 31 December 2020, 201,414 sqm corresponds to new leases and 248,516 sqm to renewals. 204,605
136,657
89,223 44,388 18,915 24,996 20,369
(1,364) (19,938) (21,733) (47,434) (64,327)
Offices Logistics Shopping centers
Renewals In Out Net 24 | Annual Report | 2020
OFFICES
Total take-up amounts to 248,992 sqm out Exits amounted to 64,327 sqm, and of which 44,388 sqm correspond to new therefore the net take up is negative by contracts and 204,605 sqm to renewals. 19,938 sqm. Main contracts signed in 2020 are the following:
Asset Tenant G.L.A. (sqm)
Ribera del Loira 60 Endesa 54,960
Alcala 40 Ministerio del Interior 9,315
PE Las Tablas BBVA 9,135
Castellana 280 Comunidad de Madrid 7,785
Sant Cugat II Ricoh 6,672
Adequa Wagen Group 5,978
PE Cerro Gamos Vector Software Factory, S.L. 5,968
Agencia Estatal de la E-Forum 5,190 Administración Tributaria
PE Poble Nou 22@ Cimpress España 4,909
PE Sanchinarro Medtronic 4,497
Nuevas Tecnologías de la PE Churruca 4,424 Información y Comunicación
PE Poble Nou 22@ Servizurich 4,201
Partenon 16-18 Maxamcorp 3,931
The release spread achieved in the contracts Release # contracts renewed or relet in the period amounts to 3.0%. spread
Madrid (1.4%) 115
Barcelona +29.5% 24
Lisbon +31.1% 11
Total +3.0% 173 | 25
LOGISTICS
Total take-up amounts to 155,572 sqm, out Exits amounted 47,434 sqm, therefore net of which 136,657 sqm correspond to new take-up amounts to positive 89,223 sqm. Main contracts and 18,915 sqm to renewals. contracts signed in 2020 are the following:
Asset Tenant G.L.A. (sqm)
A2-Cabanillas Park I F Luis Simoes 20,723
A2-San Fernando II Pallex 12,555
Zaragoza-Plaza II DSV 11,420
A2-San Fernando II Alfil 10,429
A4-Seseña Carreras Grupo Logístico 9,561
Sevilla Zal Airbus 9,075
Sevilla ZAL WIP 2.5 4 Gasa 8,203
Sending Transporte y Barcelona-PLZF 7,668 Comunicación
A4-Seseña Carreras Grupo Logístico 7,132
A2-San Fernando II Alcanor Express 5,408
The release spread achieved in the contracts Release # contracts renewed or relet in the period amount to 6.0%. spread
Madrid (9.9%) 1
Barcelona 12.1% 3
Other 12.2% 1
Total 6.0% 5 26 | Annual Report | 2020
SHOPPING CENTERS
Total take-up amounts to 45,365 sqm out Exits amounted to 21,733 sqm, and therefore of which 20,369 sqm correspond to new the net take-up is negative by 1,364 sqm. Main contracts and 24,996 sqm renewals. contracts signed in 2020 are the following:
Asset Tenant G.L.A. (sqm)
X-Madrid Ozone 2,959
Marineda Ongravity 2,621
X-Madrid Ongravity 2,380
Arenas Mercadona 1,916
Marineda Estrella Park Experience 1,751
Larios Worten 1,349
El Saler Mango 1,187
Bonaire Mango 975
El Saler Sfera 973
X-Madrid Climbat 891
X-Madrid Juguetrónica 862
The release spread achieved in the contracts renewed or relet in the period amounts to +4.1%.
LEASE MATURITY PROFILE
The chart of lease contracts maturity (next rents that have a break option amount to 10% break) shows a balanced profile. In aggregated in 2021, 23% in 2022 and 18% in 2023. terms, in the following three years, the gross
Total 15% 12% 6% 2021 10% 23% 19% 46% 2022 23%
24% 19% 20% 2023 18%
14% 20% 12% 1% 2024 13%
24% 30% 16% 99% >2025 36%
Offices Logistics Shopping centers Net leases
Investments, divestments 03 and Capex | 29
Investments, divestments and Capex
During 2020, investment activity has been as follows:
• No significant acquisitions activity in 2020. • Landmark I, Flagship and Best II & III continue. • € 198.3m divestments at GAV in the period including 3 retail assets and • The Company has revisited its Capex plans 19 BBVA branches. and is now focused on assets with pre-lets in place.
Offices Retail Logistics € million
Plaza de Acquisitions 15.4 Cataluña 9
A2-Azuqueca II A2-Azuqueca III Development X-Madrid A2-San Fernando II 103.4 A2-Cabanillas Park II Lisbon Park Castellana 85 Monumental El Saler A4-Getafe (Gavilanes) Investment properties Plaza Ruiz Porto Pi A2-Cabanillas I 117.6 Picasso Larios A4-Pinto II Arturo Soria 343
Incremental lettable space(1) 21.9
No incremental lettable space 95.7
Tenant incentives -
Other material non-allocated types - of expenditure
Like-for-like portfolio (Defensive Capex)(2) 17.6
Capitalised interest (interest if applicable) -
TOTAL 254.0
(1) Where expenditure is spent on both existing and incremental space, MERLIN classifies an expenditure as “incremental lettable space” where available lettable space is increased by at least 10% compared to the total lettable area of the asset. In 2020 Monumental and Plaza Ruiz Picasso are included within this category. 30 | Annual Report | 2020
ACQUISITIONS
OFFICES
Acquisition of Plaza de Cataluña 9
In January 2020, MERLIN acquired Plaza The acquisition price amounts to € 15.4 de Cataluña 9, an historical asset located million and all in investment totals € 18.4 in one of the most emblematic squares in million, representing a 4.5% gross yield over Barcelona with a total GLA of 3,048 sqm. € 0.8 million of gross rents. The building, designed by the renowned modernist architect Josep Puig i Cadafalch, enjoys a special charm, ideal for coworking. It will be let to our subsidiary LOOM.
Plaza de Cataluña 9
Acquisition Price (€ thousand) 15,400
Estimated Capex (€ thousand) 3,000
Total cost (€ thousand) 18,400
ERV (€ million) 0.8
ERV yield(1) 4.5%
Total G.L.A. (sqm) 3,048
(1) Calculated as ERV divided by acquisition price plus estimated Capex. | 31
DEVELOPMENTS / WORK IN PROGRESS (WIP)
LANDMARK I PLAN (OFFICES)
INVESTMENTS IN FY20
GLA (sqm) 3,048 ERV € 0.8m ERV Yield(1) 4.5% Acquisition € 15.4m
Plaza de Cataluña 9
IN STOCK
GLA (sqm) 13,244 Scope Scope Double height lobby + common areas + new retail space Budget € 8.7m Delivery Finished Diagonal 605
WIP
GLA (sqm) 16,474 Scope Full refurb Budget € 34.8m Delivery 2Q21 PRE-LET 100%
Castellana 85
GLA (sqm) 25,385 Scope Full refurb (incl. SC) Budget € 34.8m Delivery 2Q21 PRE-LET 100%
Monumental
(1) Yield on cost calculated over acquisition (€ 15.4m) plus estimated Capex (€ 3.0m). 32 | Annual Report | 2020
BEST II & III PLANS (LOGISTICS)
MERLIN continues expanding its logistics footprint trough the developments / WIP program in logistics. As of 31 December 2020, main assets under Best II and III plans are the following:
Best II (as from 31/12/2020)
GLA (sqm) ERV (€m) Investment (€m) ERV YoC Delivered 100,806 A4-Pinto II(1) 29,473 1.2 13.7 8.6%
A2-Cabanillas III(1) 21,879 0.9 11.8 7.8%
A2-Cabanillas Park I F(1) 20,723 0.9 10.8 7.9%
A4-Seseña(1) 28,731 1.2 15.5 7.7% In progress 272,746 A2-San Fernando II 33,592 1.9 22.1 8.5%
A2-Azuqueca II 98,757 4.4 54.7 8.1%
A2-Cabanillas Park II 47,403 2.1 25.7 8.1%
A2-Cabanillas Park I G 92,994 3.8 56.0 6.8% 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 31/12/2020) GLA (sqm) ERV (€m) Investment (€m) ERV YoC Delivered 59,889 Valencia-Ribarroja(1) 34,992 1.9 26.3 7.2%
Sevilla ZAL WIP(1) 13,476 0.6 7.7 8.4%
Zaragoza-Plaza II(1) 11,421 0.5 7.1 7.2% In progress 74,147 Sevilla ZAL WIP 29,174 2.4 22.2 10.2%
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 509,423 25.5 322.1 7.9%
(1) Reclassified as part of the existing stock. | 33
FLAGSHIP PLAN (SHOPPING CENTERS)
IN STOCK(1)
GLA (sqm) 50,747 Scope Full refurb Budget € 25.8m Delivery 2Q21
Saler
GLA (sqm) 58,779 Scope Full refurb Budget € 28.5m Delivery 2Q21
Porto Pi
(1) GLA and Capex budget for shopping centers refurbishments include 100% of the asset, regardless of the stake owned by MERLIN in the owners’ community. Portfolio 04 valuation | 35
Portfolio valuation
MERLIN portfolio has been appraised by CBRE, Savills and JLL, for a total GAV of € 12,811m. GAV breakdown is the following:
GAV LfL Gross Yield (€ m) Growth yield expansion/(compression)(1)
Offices 6,322 +1.0% 4.1% (46)
Logistics 1,026 +8.0% 5.6% (26)
Shopping centers 2,207 (8.7%) 5.0% 24
Net leases 1,846 (0.2%) 4.7% (1)
WIP & land 390 n.a.(2) n.a. 0
Other 444 (6.2%) 3.0% 2
Equity method 575 +4.9% n.a. 0
Total 12,811 (0.6%) 4.5% (23)
(1) Bps based on exit yield. (2) For LfL Growth purposes WIP & land is included within its category. 36 | Annual Report | 2020
A broader analysis of the asset portfolio by valuation in the different categories is shown below:
OFFICES (BY GAV)
By geography By location By product
• Madrid • Prime + CBD • Multi tenant • Barcelona • NBA • Single tenant • Lisbon • Periphery • Other Spain
LOGISTICS (BY GAV)
By geography By reach By tenant type
• Madrid • National • 3PL mono-client • Catalonia • Ports • 3PL multi-client • Seville • Regional • End user • Basque Country • Production related • Other
SHOPPING CENTERS (BY GAV)
By geography By type By size
Madrid
Lisbon
• Madrid • Valencia • Urban • Extra-large • Lisbon • Andalusia • Dominant • Large • Galicia • Other • Secondary • Medium • Catalonia • Small | 37
GAV EVOLUTION
GAV has increased by € 60m, raising from a GAV of € 12,751m as of 31 December 2019 to € 12,811m. The like-for-like decrease of GAV from 31 December 2019 is (0.6%).
8.0%
1.0%
(0.6%) (0.2) Total
(8.7%)
Offices Logistics Shopping centers Net leases
YIELD EXPANSION / (COMPRESSION)
Exit yields have compressed by 23 bps since December 2019.
24
(1) (23 bps) Total (26) (46) Offices Logistics Shopping centers Net leases
GAV BRIDGE
(€ millions)
12,751.3 127.0 235.7 12,811.1
(198.2) (104.7)
GAV Disposals Acquisitions Capex & WIP Revaluation(1) GAV FY19 FY20 FY20 FY20 FY20 FY20
(1) - € 105m revaluation FY20 = - € 84m P&L revaluation - € 1m equity method revaluation - € 15m Tree derivative - € 4m IFRS 16 adjustment Financial 05 statements | 39
Financial statements
CONSOLIDATED INCOME STATEMENT
(€ thousand) 31/12/20 31/12/19 Gross rents 503,448 525,918 Offices 233,215 243,431 Shopping centers 114,374 127,300 Logistics 58,861 53,796 Net Leases 86,513 86,962 Other 10,484 14,429 Other income 5,180 4,713 Total Revenues 508,628 530,631 Incentives (15,651) (14,393) Covid-19 relief (46,735) - Total Operating Expenses (105,294) (139,914) Propex (47,194) (48,263) Personnel expenses (21,489) (32,284) Opex general expenses (12,144) (10,186) Opex non-overheads (6,235) (4,939) LTIP Provision (18,232) (44,242)
ACCOUNTING EBITDA 340,948 376,324 Depreciation (1,614) (2,123) Gain / (losses) on disposal of assets (14,300) (19,063) Provisions (30) 87 Change in fair value of investment property (84,468) 354,972 Difference on business combination - (2,866)
EBIT 240,536 707,331 Net financial expenses (127,360) (112,415) Debt amortization costs (18,906) (3,163) Gain / (losses) on disposal of financial instruments (62) (40) Change in fair value of financial instruments (35,152) (11,068) Share in earnings of equity method instruments (3,444) 10,065
PROFIT BEFORE TAX 55,612 590,710 Income taxes 746 (27,071) PROFIT (LOSS) FOR THE PERIOD 56,358 563,639 Minorities - - PROFIT (LOSS) FOR THE PERIOD ATTRIBUTABLE 56,358 563,639 40 | Annual Report | 2020
NOTES TO THE CONSOLIDATED INCOME STATEMENT
Gross rents (€ 503,448 thousand) less i. € 21,489 thousand correspond to incentives of € 62,386 thousand equals to personnel expenses. gross rents net of incentives of € 441,062 thousand. After deducting porfolio operating ii. € 12,144 thousand of opex general expenses. expenses not recharged to the tenants & collection loss (€ 47,194 thousand) the iii. € 18,232 thousand corresponding to the resulting amount is € 393,868 thousand of net 2017-2019 long-term incentive plan (LTIP), rents. The total amount of operating expenses already expired. of the Company in the period is € 58,100 thousand, with the following breakdown: iv. € 6,235 thousand of Opex non-overheads operating expenses. The reconciliation between gross rents of the period and FFO is as follows:
(€ m)
503.4
441.1
(62.4) 393.9 5.2 365.4 (47.2) (21.5) (12.1) 262.4
(103.0)
FFO EBITDA Incentives Gross rents
& Collection loss Personnel expenses Net financial result, Propex non recharged Other operating income Net rents after incentives General expenses (opex) recurring taxes & other Gross rents net of incentives and propex non rechargeable | 41
CONSOLIDATED BALANCE SHEET
(€ thousand)
ASSETS 31/12/2020 EQUITY AND LIABILITIES 31/12/2020
NON CURRENT ASSETS 13,061,757 EQUITY 6,696,267
Intangible assets 961 Subscribed capital 469,771
Property, plant and equipment 7,106 Share premium 3,813,409
Investment property 12,139,347 Reserves 2,509,875
Investments accounted for 434,127 Treasury stock (54,149) using the equity method
Non-current financial assets 392,747 Other equity holder contributions 540
Deferred tax assets 87,469 Interim dividend -
Profit for the period 56,358
Valuation adjustments (99,537)
Minorities -
NON-CURRENT LIABILITIES 6,602,085
Long term debt 5,899,335
Long term provisions 18,296
Deferred tax liabilities 684,454
CURRENT ASSETS 415,855 CURRENT LIABILITIES 179,260
Trade and other receivables 33,368 Short term debt 57,332
Short term investments in group companies and 2,094 Short term provisions - associates
Short-term financial assets 77,271 Trade and other payables 113,586
Cash and cash equivalents 252,022 Other current liabilities 8,342
Other current assets 51,100
TOTAL ASSETS 13,477,612 TOTAL EQUITY AND LIABILITIES 13,477,612
APM: definitions and reconciliation of APMs to the latest audited financial accounts can be found on page 59 of www.merlinproperties.com/wp-content/uploads/2021/02/Results-report-FY20.pdf 42 | Annual Report | 2020
NOTES TO THE CONSOLIDATED BALANCE SHEET
Fair value of the portfolio corresponds to the appraisal value delivered by CBRE, Savills and JLL as of 31 December 2020. The referred appraisal value is reflected in the following accounting Items:
€ million Notes
Investment property 7 12,139.3
Derivatives (in non-current assets) 10 107.9
Equity method 9 434.1
Non current financial assets(1) n.a. 103.7
Non-current assets n.a. 0.9
Inventory n.a. 19.5
Total balance sheet items 12,805.4
IFRS-16 (concessions) 7 (32.0)
Equity method adjustment n.a. 37.5
Non-current assets adjustment n.a. 0.3
Total valuation 12,811.1
FINANCIAL DEBT
FINANCIAL DEBT BREAKDOWN
€ Thousand Long term Short term Total
Financial debt 5,724,857 10,167 5,735,024
Loan arrangement costs (94,302) - (94,302)
Debt interest expenses - 38,108 38,108
Mark-to-market of interest-rate hedging contracts 127,345 1,277 128,622
Other financial liabilities (i.e. legal deposits) 135,586 6,018 141,604
Total debt 5,893,486 55,570 5,949,056
(1) Includes DCN loan and Aedas stake. | 43
MERLIN’s net financial debt as of 31 December is € 5,268,483 thousand. This implies a Loan To Value of 39.9% including transfer costs, which represents an increase of 46 bps since 31/12/2019 (39.5%). The breakdown of MERLIN’s debt is the following:
4,091 5,735 (€ million) 5,268
(467)
879
765
Secured Unsecured Unsecured Total Gross Cash Total Net bank loans loans bonds Debt Debt
% Gross 13.3% 15.3% 71.3% 100.0% financial debt
Average 2.12% cost (%) 2.80% 1.70% 2.08%
% interest rate 99.8% hedged 100.2% 98.9% 100.0%
MERLIN’S debt has an average maturity period of 6.0 years. The chart showing debt maturity profile is the following:
(€ million) 1,175
862 888 754 619 560 9 521 323 3 7 3 3 10 22 0 9
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 +2030
Unsecured loans Unsecured bonds Secured bank loans 44 | Annual Report | 2020
MERLIN’s debt as of 31 December has an average cost of 2.12% (spot 1.80% plus derivatives cost). Nominal debt with interest rate hedged amounts to 99.8%. Key debt ratios are shown below:
(€ million) 31/12/2020 31/12/2019
Gross financial debt 5,735 5,567
Cash and equivalents(1) (467) (385)
Net financial debt 5,268 5,182
GAV 12,811 12,751
LTV 39.9% 39.5%
Av. Interest rate 2.12% 2.09%
Hedged debt 99.8% 99.5%
Av. Maturity (years) 6.0 6.4
Liquidity(2 ) 1,253 1,200
Non-mortgage debt 86.7% 82.7%
(1) Includes cash and treasury stock (€ 54.1m), Juno’s receivable (€ 70.0m) and Silicius receivable (€86.5m) in FY20 and cash, pending receivable of Juno (€ 70.0m) and treasury stock (€ 56.9m) in FY19. (2) Includes available cash plus pending receivable of Juno & Silicius, treasury stock and undrawn credit facilities (€ 786m RCF and EIB loan) in FY20 and available cash plus pending receivable of Juno, treasury stock and unused and undrawn credit facilities in FY19. | 45
SHAREHOLDERS RETURN the beginning of period (the “Shareholder Return Rate”). In accordance with these The Shareholder Return for a given period definitions, the Shareholder Return for 2020 is equivalent to the sum of (a) the change amounts to € 0.22 per share (or € 102m of in the EPRA NTA per share of the Company value created in absolute terms) and the during such period; and (b) the total Shareholder Return Rate amounts to 1.4%. dividends per share (or any other form of remuneration or distribution to the Shareholders) that are paid in such period (the “Shareholder Return”). The Shareholder Return Rate is defined as the Shareholder Return for a given period divided by the EPRA NTA per share of the Company at
Per share (€) € million
EPRA NTA 31/12/2019 15.39 7,230
NAV growth in 2020 0.07 34
EPRA NTA 31/12/2020 15.46 7,263
DPS 0.15 69
NTA growth + DPS (Shareholder Return) 15.61 7,332
Shareholder Return Rate 1.4% 1.4%
Figures may not add up due to the rounding. Events 06 Post-Closing | 47
Events Post-Closing
• In January, MERLIN delivered a 98,757 sqm warehouse (A-2 Azuqueca II) to Carrefour.
• In February, MERLIN sold 3 non-core logistics assets comprising 50,904 sqm and 1 BBVA branch for € 44.0m (+5% vs pre-Covid). EPRA 07 Metrics | 49
EPRA Metrics
Performance Measure Definition 31/12/2020
€ million € per share
EPRA Earnings Earnings from core operational activities 262.4 0.56
Net Asset Value (NAV) is calculated based on the consolidated shareholders’ equity of the Group adjusted to include properties and other investment NAV (1) interests at fair value and to exclude certain 7,364 15.68 items not expected to crystallise in a long-term investment property business model, as per EPRA’s recommendations
EPRA Net Reinstatement Value: assumes that entities EPRA NRV never sell assets and aims to represent the value 7,738 16.47 required to rebuild the entity
EPRA Net Tangible Assets: assumes that entities buy EPRA NTA and sell assets, thereby crystallizing certain levels of 7,263 15.46 unavoidable deferred tax
EPRA Net Disposal Value: represents the shareholders’ value under a disposal scenario, where deferred tax, EPRA NDV financial instruments and certain other adjustments are 6,544 13.93 calculated to the full extent of their liability, net of any resulting tax
Annualized rental income based on the cash passing rents at the balance sheet date, less non-recoverable EPRA Net Initial Yield 3.9% property operating expenses, divided by the market value of the property, increased with acquisition costs
Adjustment to the EPRA Net Initial Yield in respect of the expiration of rent-free periods (or other unexpired EPRA “topped-up” NIY 4.0% lease incentives such as discounted rent periods and step rents)
Estimated Market Rental Value (ERV) of vacant space EPRA vacancy rate(2) 6.1% divided by ERV of the whole portfolio
EPRA Cost ratio Running costs of the Company divided by recurring (including direct 19.7% rents including direct vacancy costs vacancy costs)
EPRA Cost ratio Running costs of the Company divided by recurring (excluding direct 17.2% rents excluding direct vacancy costs vacancy costs)
EPRA costs (excluding Recurring running costs of the Company divided by 18.3% non-recurring costs) recurring rents
MERLIN Properties has been awarded by EPRA with the gold award of best practices in financial reporting. It is the highest recognition for an outstanding compliance with the best practices.
(1) Formerly EPRA NAV. (2) ERV of occupied units under operations € 533.0m, ERV of vacant units under operations € 34.8m. Stock exchange 08 evolution | 51
Stock exchange evolution
MERLIN shares closed on 31 December 2020 at € 7.78, a decrease of 39% versus 31 December 2019 closing price (€ 12.79).
MERLIN SHARE PRICE PERFORMANCE(1) VS REFERENCE INDICES
From 31st December 2019 to 31st December 2020, Rebased to 100
120 16.0
14.0 100 (4.7%) 12.0 (13.1%) 10.0 80 (15.5%) 8.0
60 (39.2%) 6.0
4.0 40 2.0
20 0.0 Dec-19 Jan-20 Feb-20 Mar-20 Abr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20
. 3
(1) Adjusted for any equity dilutive transactions.
AVERAGE DAILY TRADING VALUE (€ M)
28.7 28.0 26.2 Average daily trading volume during 23.1 the period has been € 26.2 million.
2017 2018 2019 2020 52 | Annual Report | 2020
As of the date of this report, MERLIN is covered by a wide variety of 23 equity research houses. Consensus target price is € 10.07.
TARGET PRICES AND ANALYST RECOMMENDATIONS
Broker Report date Recommendation Target Price
10-02-2021 Neutral 10.00
18-01-2021 Buy 9.00
13-01-2021 Buy 9.10
07-01-2021 Neutral 8.30
03-12-2020 Buy 9.71
16-11-2020 Neutral 9.00
06-11-2020 Buy 9.00
01-10-2020 Buy 6.71
23-09-2020 Buy 9.05
03-09-2020 Neutral 8.00
31-08-2020 Sell 6.10
07-08-2020 Sell 5.90
05-08-2020 Buy 9.55
03-08-2020 Buy 8.90
13-07-2020 Buy 9.90
11-06-2020 Buy 9.60
05-06-2020 Buy 10.17
01-04-2020 Buy 11.00
17-02-2020 Buy 14.50
14-02-2020 Neutral 14.10
11-10-2019 Buy 15.00
14-05-2019 Buy 14.49
17-01-2019 Buy 14.50
Total Average 10.07
Dividend 09 policy | 55
Dividend policy
The Company maintains a dividend policy three year period; (ii) 100% of the profits that takes into account sustainable levels obtained by receiving dividends paid by of distributions and shows the Company’s qualified subsidiaries; (iii) at least 80% of the forecast in relation to obtaining recurring rest of the obtained profits. If the dividend profits. The Company does not intend to distribution agreement is not adopted within create reserves that cannot be distributed the legal timeframe, the Company will lose its to the shareholders, other than those REIT status during the financial year to which required by law. the dividends refer.
According to the Spanish regime for In accordance with the Prospectus, MERLIN REIT’s, the Company will be obligated to Properties targets to deliver a dividend yield of adopt agreements to distribute the profits between 4% and 6% over the initial IPO price. obtained in this financial year in the form of The Company’s dividend policy is established dividends to shareholders, after complying as the distribution of a minimum of the 80% with any relevant requirement of the Spanish cash flow from operations less the payment Corporation Law. The Company will be of interests and less the payment of recurring obligated to agree its distribution within expenses of maintaining assets (AFFO). six months of the close of each financial period, in the following manner: (i) at least The distributions to MERLIN’s shareholders 50% of the profits derived from the transfer during 2020 are shown in the chart. The of real properties, shares, or shareholdings management team of MERLIN Properties in qualified affiliates, provided that the will propose a final and unique dividend on remaining profits are reinvested in other real account of 2020 results, being subject estate assets within a maximum period of to the 2021 General Shareholders Meeting. three years from the date of transmission The dividend would be a gross amount of or, if not, 100% of the profits must be 0.30 euros per share, corresponding in full distributed as dividends at the end of this to the return of share premium distribution.
Type Date Concept € per share Interim 2015 28-oct-15 Dividend 0.0775 Final 2015 27-apr-16 Dividend 0.005692 Final 2015 27-apr-16 Share premium distribution 0.102608 Total 2015 0.19 Interim 2016 25-oct-16 Dividend 0.185 Interim 2016 25-oct-16 Share premium distribution 0.02 Final 2016 18-may-17 Dividend 0.10071014 Final 2016 18-may-17 Share premium distribution 0.09928767 Total 2016 0.40 Interim 2017 25-oct-17 Dividend 0.20 Final 2017 25-may-18 Dividend 0.02053654 Final 2017 25-may-18 Share premium distribution 0.23946346 Total 2017 0.46 Interim 2018 25-oct-18 Dividend 0.20 Final 2018 07-may-19 Dividend 0.20270039 Final 2018 07-may-19 Share premium distribution 0.09729961 Total 2018 0.50 Interim 2019 28-oct-19 Dividend 0.20 Final 2019 8-jul-19 Dividend 0.14741659 Total 2019 0.35 Final 2020 Pending AGM approval Share premium distribution 0.30 Total 2020 0.30 Treasury 10 shares | 57
Treasury shares
As of 31/12/2020 the Company owned • 20,089 shares have been sold for a total 4,836,503 treasury shares. During 2020, amount of €225,000 (average price of the following events have occurred in €11.20 per share). relation to the treasury stock: The Company has acquired a total of 26,177 • In accordance with the delivery conditions shares in 2020. Below we show a breakdown of the 2016 long term incentive plan, of the variations during the year of the 1,578,623 shares have been delivered to balance of treasury shares: the beneficiaries in March.
• 112,393 shares were delivered to the employees as part of the “flexible remuneration program”.
Acquisitions Disposals Total
31/12/2019 Balance 5,077,369
1Q20 24,846 (18,118) 6,728
2Q20 1,120 (111,356) (110,236)
3Q20 112 (13,027) (12,915)
4Q20 99 (124,542) (124,443)
31/12/2020 Balance 4,836,503
% total shares 1.03% Outlook / R+D 11 information / other | 59
Outlook / R+D information / other
In 2021, MERLIN expects to continue with Regarding R+D and other innovative high occupancy rates and the maintenance initiatives, MERLIN has promoted several of strong cash flow due to the long technological projects to position the remaining lease period (5.4 years from company in the vanguard of customer 31 December 2020, weighted by each solutions and internal management. Among tenant rents) The Company also expects them it can be highlighted: to continue with the rotation strategy (acquisition and disposals) of assets that fit • Special projects: within its investment strategy. To this end, it holds a cash position of € 466.5 million. - Sensorisation program for office In this regard, in 2020, in accordance to our buildings (in partnership with Signify) best estimates, average payment period to and shopping centers (in partnership suppliers was 31 days. The Company uses with Vodafone). interest rates hedging financial instruments to manage the exposure to the interest - Last mile logistics. rates fluctuation in its financing. The Company Policy consists of maintaining – Photovoltaic Project. the net noncurrent financial debt from third parties at fix rate. To achieve the target, the - Implementation of third-party Company operates with interest rates swaps technologies (e.g. KeepEyeOnBall, that hedge their corresponding loans. Mayordomo and Fillit).
- Customer experience app.
• Sponsoring: agreement with Fifth Wall, the largest venture capital firm focused on the global real estate industry and property technology for the Built World. 12 Sustainability | 61
Sustainability in the portfolio
In 2020, MERLIN remained committed to In this vein, the Company has continued to sustainability as a distinguishing element of its gradually advance in all plans started up in assets, key to maximizing its performance. previous years to include sustainability as a cross-cutting factor among all its assets.
• Acquisition of renewable electric energy in 93% of its multi-tenant offices.
• •Start-up of the pilot project for the generation of photovoltaic energy at the Meco I logistics asset.
• Expansion of the ISO 50001 Integrated Energy Management System at 31 new assets. 2020 Milestones • Installation of 148 new electric vehicle recharge points.
• LEED and BREEAM certification at 81% of assets (in GAV, not including Net Leases).
• Certification of 14 new office properties in accordance with the AEO model.
• Acquisition of 100% renewable energy at all MERLIN multi-tenant assets.
• Development of the first phase of theProject Sun photovoltaic energy generation project at a total of 24 assets.
• Implementation of several sustainable mobility Future Challenges initiatives at MERLIN Hub Madrid Norte assets.
• Expansion of the electric vehicle recharge point network to the entire office assets portfolio.
• Certification of 99% of assets (in GAV, not including Net Leases) with LEED and BREEAM certificates.
• AEO certification for up to 37 office assets. 62 | Annual Report | 2020
Main indicators for the year
Data in like for like terms(1) Data in absolute terms
Change Change Data 2020 Data 2020 2019-2020 2019-2020
Energy consumption in GJ 277,900 (18.0%) 388,595 (19.3%)
Greenhouse gas emissions 14,295 (21.7%) 19,600 (25.0%) (tCO2eq)
Water collection (m3) 358,767 (39.9%) 495,673 (40.3%)
Waste (ton) 1,492 (26.5%) 4,996 (31.2%)
% of the portfolio (in GAV) -(3) -(3) 81% +6 % LEED, BREEAM certified(2)
MERLIN PROPERTIES’ ESG STRATEGY
MERLIN considers sustainability (in its a key aspect, especially with regard to three ESG aspects: environment, social energy consumption. and governance) as a key aspect of the Company’s strategy. Taking into account • Sustainable mobility: through specific its activity as a diversified Company, and initiatives in its main asset categories, a leader in the Iberian Peninsula, it defines MERLIN aims to promote a modern urban four strategic cornerstones on which its mobility model that is low in emissions and ESG strategy is based: encourages the use of electric vehicles and zero emission mobility alternatives. • Sustainable assets: to guarantee the maximum levels of sustainability during • Scoring: MERLIN has a high proportion of the operation of its assets, MERLIN certified assets with regard to sustainable promotes the implementation of energy construction (LEED and BREEAM), saving measures (ESMs) at its assets and Environmental Management Systems the installation of photovoltaic panels (ISO 14001 and 50001), and has obtained to generate renewable energy (for self- other certifications of particular relevance consumption or to be fed into the grid). in the sector (AIS, AEO). It has also The Company further hopes to provide demonstrated its extensive efforts in ESG 100% renewable electrical energy to all thanks to the high scores obtained in its assets. quality seals such as GRESB and CDP, and EPRA’s recognition of its CSR report. • Sustainable construction: the comprehensive refurbishments carried out at MERLIN assets within the framework of its value creation plans integrate sustainability is
(1) The term Like for like groups assets that have been in operation in the MERLIN portfolio over the last three years (from 1 January 2018 to 31 December 2020) without any relevant changes. (2) Taking into account only those assets from the offices, shopping centers and logistics portfolios in operation, as well as the following WIP assets: Castellana 85, Plaza Pablo Ruiz Picasso, Arturo Soria 343, A2-Azuqueca II and A2-Cabanillas Park I G. Excluding the Barcelona ZAL Port assets, the assets from the Net Leases portfolio, non-core assets, and the remaining WIP assets. (3) Given the characteristics of this indicator, it is only reported on in absolute terms. | 63
Sustainable Sustainable Sustainable Scoring assets construction mobility
• Energy efficiency • CAPEX devoted to • MERLIN HUB: • Certifications measures: systems energy efficiency in a fully developed cluster Outstanding installed across our value creation plans. of mobility to tenants achievement: portfolio to promote located within a more than 2.5 million • The most ambitious energy efficiency. specific zone. sqm certified. projects to reshape • Photovoltaic Madrid: • Last Mile Logistics: • Quality seals: project: pioneer launch of an internal Strong track record 1. DCN in photovoltaic pilot program and in quality seals self-consumption 2. Renazca deployment to the over time. installations. entire portfolio, all with emission-free vehicles. • EV Chargers: intensive installation of electric chargers across our portfolio.
With regard to this ESG strategy, the Company is implementing an initiative to reach the target of “net zero emissions”. For MERLIN, this objective does not only mean reducing GHG emissions directly attributable to the Company, but also promoting the reduction of GHG emissions by its tenants and users. MERLIN therefore, undertakes with its tenants to ensure the maximum levels of sustainability and efficiency of the assets they occupy.
It should also be noted that in 2020 MERLIN had already reached the first milestone in this regard, by obtaining GHG emission levels equal to zero for electricity in scope 2 (calculated using a market-based method). 64 | Annual Report | 2020
CERTIFICATIONS OBTAINED BY MERLIN ASSETS
In addition to maximizing the environmental The company continues with its certification performance of assets, the sustainable plan which began in 2016, and the aim is to construction certifications represent an certify 99% of its office assets, 100% of its important lever for value generation, shopping centers and 97% of its logistics responding to the growing interest of tenants assets, in GAV terms over the coming years. to have spaces that comply with the highest As at the close of 2020, it had already standards in sustainability. Obtaining these showed a significant amount of progress. certifications requires providing assets with MERLIN is a leader in this area and will the most advanced measures in terms of continue to reaffirm its position over the efficiency and technology, which in turn is coming financial years. a benefit for all users. At the close of the year, 81%(1) of the Furthermore, obtaining sustainable Company’s core assets had been certified construction certifications is one of the main with one of the two benchmark standards indicators of the sustainable loan signed by in sustainable construction: LEED and MERLIN in 2019. BREEAM, distributed as follows:
99% 100% 97%
17% 24% 11%
Certified 86% 82% 76% In process
Offices Shopping Centers Logistics
In 2020, MERLIN obtained a total of 43 LEED or BREAM certifications.
Platinum Gold Silver Very good Good Pass 1 new 9 new 3 new 5 new 17 new 8 new asset assets assets assets assets assets
(1) In terms of GAV (Gross Asset Value), only taking into account the assets of the offices, shopping centers and logistics portfolios in operation (including Avenida de Burgos 210), as well as the following WIP assets: Castellana 85, Plaza Pablo Ruiz Picasso, Arturo Soria 343, A2-Azuqueca II and A2-Cabanillas Park I G. Excluding the Barcelona ZAL Port assets, the assets from the Net Leases portfolio, non-core assets, and the remaining WIP assets. | 65
With these new certifications the current In 2020, MERLIN invested a total amount of status of the portfolio relating to sustainable € 824,000 in sustainable certification(2). construction certification is as follows:
Silver Platinum Pass Very Good 19% 16% 15% 31% PlatPlataa CoCorrrrectoecto
OroOro BuenBuenoo
PlatinPlatinoo MuMuy yBueno Bueno LEDD BREEAM Certifications(1) Certifications(1)
Gold Good 65% 54%
(1) In terms of surface area, taking into account only the assets from the offices, shopping centers and logistics portfolios, as well as the WIP assets: Castellana 85, Plaza Pablo Ruiz Picasso, Arturo Soria 343, A2-Azuqueca II and A2-Cabanillas Park I G. Excluding the Barcelona ZAL Port assets, the assets from the Net Leases portfolio, non-core assets, and the remaining WIP assets. (2) Includes investments aimed at obtaining LEED, BREEAM and WELL certification. There has been a 40% fall compared to the previous year in this amount, due to the adjustment of the CAPEX and OPEX levels, taking into account the circumstances of the 2020 financial year. 66 | Annual Report | 2020
QUALITY SEALS
In 2020, MERLIN’s efforts in the area of Furthermore, this is the first year that sustainability were rewarded by several MERLIN has participated in the CDP exceptional scores by the ESG sustainability questionnaire. This questionnaire assesses ratings: GRESB and CDP. In both cases, the degree of commitment of companies the score obtained provides investors with from different sectors in the fight against a benchmark against which to compare climate change. The CDP rating obtained in MERLIN’s level of ESG performance with 2020 by MERLIN is a “B”, higher than the other companies in the sector and with the global average, the European average and universe of companies forming part of the average of the peer group assigned by these indexes. CDP (Financial Services).
Furthermore, MERLIN has participated Also, of particular note in ESG Reporting, in the GRESB questionnaire for the third EPRA awarded the MERLIN CSR Report year running, which is specifically aimed at the Gold Award for the third year running, companies from the REITs sector. Using this rewarding the level of alignment of the questionnaire as a basis, GRESB provides Report with its reporting recommendations. a score that allows ESG performance to be evaluated and compared with other MERLIN will continue to reaffirm its companies. MERLIN obtained an overall position in the most widely recognized ESG score of 78 points out of 100 in the indexes. In this same vein, the Company has questionnaire. This score is 9 points higher adapted the CSR Report to Bloomberg’s compared to the average of European ESG Disclosure Score reporting additional REITs and 8 points higher compared to the information which responds to the indicators average of global REITs. Compared to its defined by Bloomberg in this index. Similarly, peers (companies classified as comparable the Company has set an objective for the to the Company), MERLIN obtained a score coming years to participate in S&P’s DJSI/ that is 7 points higher than the average of its CSA questionnaire. peer group, or comparable companies.
78%
MERLIN 70% 71% Average performance 69% score
C C C B Financial Europe Global Services average | 67
ENVIRONMENTAL PERFORMANCE OF MERLIN PROPERTIES’ PORTFOLIO
In line with the best market practices In any event, the environmental information concerning sustainability, MERLIN follows provided in the CSR Report responds to the EPRA (European Public Real Estate both the EPRA sBPR Guidelines and the GRI Association) Guidelines established Standards. Following the recommendations it guide: Sustainability Best Practice of this Guide, the CSR Report, according Recommendations on Reporting (sBPR), in to the tables contained in the EPRA its third and most recent version published sBPR Guide (Sustainability Best Practice in 2017. In this manner, the Company is able Recommendations), also includes a to systematically and consistently evaluate series of tables which provide a detailed the environmental performance of its assets breakdown of the portfolio’s environmental over time, also ensuring that the results performance. obtained are comparable to those reported by other companies in the sector. The information in the CSR Report is also verified by an external auditor in accordance The EPRA sBPR uses the most recent with the criteria established by the GRI guidelines established by the GRI (Global Standards (for further information see the Reporting Initiative) in its GRI Standards table “GRI Table of Contents” in chapter 8.3 as a starting point. These standards form of the CSR Report). the most important sustainability reporting standard in the world, however, as they are Below follows the tables with the main KPIs aimed at a wide range of companies, they in total and absolute terms and also in Like are generic and broad in nature, and in for Like terms. certain cases do not sufficiently cover the specific characteristics of the Real Estate sector. However, the EPRA sBPR Guide provides very specific reporting criteria which detail the requirements established by the GRI Standards. 1 1 68 | Annual Report | 2020
0 0 0 0 0 00 0 0 0 0 0 0 10 1
0 0 0 0 0 0 0 0 0 0 0 110 11 0 0 0 0 ENERGY CONSUMPTION
0 0 0 0 0 0 0 0 0 0 10 0 1 Like for like energy consumption Absolute energy consumption0 0 0 0 0 0 0 0 1 1 0 0 0 0 (GJ) by asset category by line (GJ) by asset category
0 0 0 0 0 00 0 0 0 0 0 0 10 1
1 1 1 1 0 0 0 0 0 0 0 0 0 0 0 110 11 11 11 0 0 0 00 0 0 0 1 101 10 0 0 1 1 00 00 1 1 1 01 1 1 0 1 11 1 11 00 00 1 1 11 1 1 1 0 01 0 0 1 1 0 0 0 0 0 0 0 0 0 0 10 0 1 0 0 0 0 0 0 0 0 1 1 0 0 0 0 1 1 00 00 0 0 1 1
20182018 20192019 20202020 20182018 20192019 20202020
1 1 1 1 Energy consumption in offices Energy consumption in logistics assets 11 11 0 0 E E 0 Energy 0 consumption in shopping centers E E 1 101 10 0 0 1 1 00 00 1 1 1 01 1 1 0 1 11 1 11 00 00 1 1 11 1 11 001 00 1 0 01 0 0 1 1 1 1 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 00 00 0 0 1 1 1 1 GREENHOUSE GAS EMISSIONS1 1 (GHG) 0 0 0 0 10 0 10 0 1 1 20182018 20192019 0 0 20202020 20182018 20192019 20202020
1 Like1 for like GHG11 0 11 0 emissions (t 1 CO 1 2eq) 1 Absolute1 GHG1 1 emissions1 1 (t CO1 1 2eq) by asset category (location-based approach) by asset category (location-based approach)
E E 20182018 2019 2019 20202020 E E 20182018 20192019 20202020
1 001 00 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 0 0 0 1 1 1 1 0 0 0 0 0 0 0 0 10 0 10 0 1 1 0 0 1 1 11 0 11 0 1 1 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 00 0 00 0 0 1 1 1 0 1 0 0 0 20182018 20192019 20202020 11 11 20182018 1 1 20192019 1 0 1 0 20202020 11 11 1 1 1 1
GHG20182018 emissions in 2019offices2019 20202020 2018GHG2018 emissions in2019 logistics2019 assets 20202020 0 0 0 0 GHG emissions in shopping centers 0 0 0 0 0 0 0 0 0 0 0 00 0 00 0 0 1 1 1 0 1 0 0 0 11 11 1 1 1 0 1 0 (1) The data for absolute 11 11 energy consumption1 1 1 1 for 2019 was recalculated to include the consumption of District Heating & Cooling corresponding to this year for the office assets: Torre Glòries and Llull 283 (Poble Nou 22@). No information on consumption of this type is available for 2018. (2) The data20182018 for absolute GHG2019 emissions2019 for 2019 was20202020 recalculated to include the 2018omissions2018 deriving from20192019 consumption of District20202020 Heating & Cooling corresponding to this year for the office assets: Torre Glòries and Llull 283 (Poble Nou 22@). No information on consumption of this type is available for 2018. (3) The data on GHG emissions in 2020 includes information the refrigerant gas recharges that have occurred at the assets during the year. This information is not available for 2018 and 2019. 1 1
0 0 0 0 0 00 0 0 0 0 0 0 10 1
0 0 0 0 0 0 0 0 0 0 0 110 11 0 0 0 0
0 0 0 0 0 0 0 0 0 0 10 0 1 0 0 0 0 0 0 0 0 0 0 0 0
1 1 1 1 11 11 0 0 0 0 1 101 10 0 0 1 1 00 00 1 1 1 01 1 1 0 1 11 1 11 00 00 1 1 11 1 1 1 0 01 0 0 1 1 1 1 1 1 00 00 0 0 1 1
20182018 20192019 20202020 20182018 20192019 20202020
E E E E | 69 1 001 00 0 0 1 1 0 0 1 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 10 0 10 0 1 1 0 0 WATER1 1 WITHDRAWAL11 0 11 0 1 1 1 1 1 1 1 1 1 1
20182018 20192019 20202020 Water withdrawn in Like for Like terms (m3) Water withdrawn20182018 in absolute20192019 terms (m20203)2020 by asset category by asset category 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 0 00 0 0 1 1 1 0 1 0 0 0 11 11 1 1 1 0 1 0 11 11 1 1 1 1
20182018 20192019 20202020 20182018 20192019 20202020
Water withdrawal in offices Water withdrawal in logistics assets Water withdrawal in shopping centers
0 10 1 0 10 1 0 0 0 0 WASTE0 MANAGEMENT0 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 0 1 0 1 Generation0 0 of Like for 0 like0 waste by asset0 00 0 Generation0 1 00 1 0 of waste by0 1 asset0 1 category category (ton generated) (ton generated)
0 0
0 0 1 1 0 0 1 1 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 0 1 1 1 1 1 1 10 10
20182018 20192019 20202020 20182018 20192019 20202020
1010 Waste generation in offices Waste generation in logistics assets 0 0 0 0 Waste generation in shopping centers 0 0 0 0 0 0 0 0 0 0 0 0 0 0 00 0 0 0 01 0 01 0 0 10 0 1 0 01 0 01 0 01 0 01 0 01 0 01 0 01 0 01 0 01 0 01
0 00 0 00 0 00 0 00 0 00 0 00 0 0010 001 0 0010 001 0 00 0 00 Further information, see chapter 7.3 of the 2020 CSR Report.
0 0 0 0 1 1 1 1 1 1 1 1 1 11 1 11 1 1 1 1 10 0 10 0 11 11 10 0 10 0 11 11 0 0
1 1 1 1 1 1 1 1 1 1 1 01 0 1 1 1 00 1 00
20182018 20192019 20202020 20182018 20192019 20202020
1111 1 1 0 0 10 10 0 1 0 1 1 1 0 0 1 01 1 01 0 0 0 0 1 1 1 1 1 1 1 1
0 0 0 0 0 0
20182018 20192019 20202020 20182018 20192019 20202020
1 1 1 1
0 0 000 000 1 1 1 1 1 1 1 1 0 0 1 0 1 0 1 1 11 11 11 11 0 0 1 1
1 10 1 10 1 11 1 11 1 1 1 1 1 1 1 0 1 0
20182018 20192019 20202020 20182018 20192019 20202020 13 Staff | 71
Staff
EMPLOYEES
• Adaptation of workspaces to current health conditions. • R ollout of a Coronavirus protocol, with regular testing for COVID-19. • Changing the human resource management information system, unifying employee data in one system. 2020 Milestones • Launch of the Employee Portal and a Portal app in order to improve employee communication. • Extension of foreign language learning to include all employees. • First informative talk to employees on health insurance.
• Improving the fringe benefits available to employees. • Upgr ading the Employee Portal to enhance levels of Future Challenges employee communication and interaction and include an offer and discount programme. • Encouraging employee CSR engagement.
Main indicators for the year
2020(1) Trend 2019-2020
Number of employees 220 +0.9%
% Women employees 44.5% =
(0.5) % Employees on indefinite contracts 99.1% percentage points
MERLIN’s distinctive aspects in relation to its employees
MERLIN has a team of highly skilled Company’s human capital. Thanks to this, the professionals with proven experience in Company is increasingly ready to anticipate the industry and a growing commitment to trends, face challenges going forward and the integration of new profiles that bring achieve the highest levels of excellence. distinctive insight and added value to the
(1) Data at 31 December 2020. 72 | Annual Report | 2020
With a highly productive workforce, Similarly, MERLIN is committed to maximising professionals are solidly committed to the employee development, providing training Company’s project and are aligned to deliver and other tools that ensure professionals are on its objectives. equipped with the necessary independence to make decisions.
Excellence 27.8 MERLIN is made up of a team of top-class Average years professionals who are highly-skilled and of management experienced professionals and deliver team experience distinctive insight. This applies particularly to the management team.
Productivity 65.0 MERLIN has established itself as the REIT with the highest GAV ratio per employee M€ GAV/employee(1) in all Europe, which is, moreover, 2.5 times the European average, consistent with its philosophy of growth and efficiency.
Commitment 35.3% MERLIN’s professionals are solidly of employees committed to its business project, as have opted to receive is borne out, for example, by the high Company shares percentage of employees who have opted to receive a part of their compensation in as compensation the form of Company shares. in kind
Independence 93.6% MERLIN’s professionals are noted for their of employees proactivity and responsibility and are have received equipped with the necessary skillsets and training independence to make decisions.
(1) Not including LOOM employees. | 73
A strong and outstanding team
MERLIN Properties’ team is made up of a estate industry and deep knowledge of total of 220 employees, broadly divided the market and are focused on maximising into two categories, in view of MERLIN’s operational efficiency and asset return. horizontal structure strategy. • Other professionals. 209 employees • Management Team. The management (97 women and 112 men). They are made team comprises 11 employees (one woman up of a team of professionals who are and 10 men, 5% of the total) under the highly experienced and qualified in the executive management of the CEO. They industry and are solidly committed to have considerable experience in the real the Company’s project.
Workforce composition(1)
2020 2019 2018
Men Women Men Women Men Women <30 years ------Management 30-50 years 3 1 4 1 7 1 Team >50 years 7 - 7 - 4 -
<30 years 9 11 11 12 4 4 Other 30-50 years 69 66 71 64 67 54 professionals >50 years 34 20 28 20 21 14
Total 220 218 176
(1) Data at 31 December 2020. 74 | Annual Report | 2020
Current profile of MERLIN Properties’ employees(1)
• I represent 45% of the workforce. • I represent 55% of the workforce. • I represent 36% of recruitments in 2020. • I represent 64% of recruitments in 2020. • I am between 30 and 50 years old • I am between 30 and 50 years old (68% of women). (59% of men). • I have an indefinite contract (99%). • I have an indefinite contract (99%). • I received 21.1 hours of training(2) • I received 17.9 hours of training(2) in 2020. in 2020. • I work in Spain (98% of women). • I work in Spain (96% of men).
Diversity and equal opportunities Professionals joining the Company
As reflected in the Company’s Code MERLIN regards its employees as critical to of Conduct, MERLIN promotes equal ensuring the success of its business project. opportunity among all its employees, as Hence, the Company tries to hire the best regards access to employment, training, professionals, who are able to bring added promotion and working conditions. value and increasingly, distinctive insight, propelling it to the forefront of industry trends. This is borne out by the number of women on the payroll. Women make up 45% of all The Company selects new professionals professionals at the end of the year and are by looking at their knowledge, experience present in all professional categories. and skills and their alignment with the Company’s values and goals. MERLIN commits to workforce diversity and continues to strongly advocate the During 2020, MERLIN hired a total of 22 integration of people with different abilities. new employees, representing a new hire The Company currently has a total of 5 rate of 10.0%. Although most of these new employees who belong to this group, which employees have industry-leading experience, represents more than 2% of the workforce as MERLIN has continued to commit to taking required under current legislation. on young talent and hired three indefinite employees aged below 30, two of whom All these professionals have indefinite were recent graduates. part-time contracts and carry out work which is needed and valued by the Company. They have been part of MERLIN’s workforce practically since the outset, reflecting the value they continue to bring and the team’s need for their work.
(1) Data at 31 December 2020, except for average training hours per employee. (2) Average training hours have been calculated taking into account the employee average during 2020. The figure for average training hours in 2020 in total terms (including men and women) stood at 19.3 hours. | 75
Profile of MERLIN’s recruitments in 2020 % % >50 years>50 % years %>50 years >50 years >50 years % >50 years >50 years <30 years % % <30 years>50 years >50 years % % >50 years % % <30 years >50 years<30 years 30-50 years <30 years >50 years 30-50 years 30-50 years % % 30-50 years <30 years >50 years <30 years >50 years 30-50 years <3030-50 years years % <30 years 30-50 years % 30-50 years % <30 years % <30 years % % 30-50 % years % 30-50 years 30-50 years <30 years 30-50 years >50 years <30 years years 30-50 years30-50 years 30-50>50 years years 30-50 years 30-50 years <30 years 30-50 years <30 years 30-50 years 30-50 years >50 years 30-50 years
<30 years >50 years >50 years >50 years <30 years <30 years <30 years >50 years
<30 years Within this framework, like in 2019, employees were able to buy shares in the Company. This year, 77 employees chose % % % % this flexible benefit option, bearing out the % % % % Men Men WomenWomen %MenMen Women Women % commitment of the workforce to MERLIN’s % Men %Women business project. Men % Women % Men Women In 2020 all indefinite employees received their variable-pay bonus which accrued in 2019 thanks to their good performance that year. Regarding the Long-Term Incentive Plan Talent retention mechanisms (LTIP), it was cancelled in 2020, pending its future definition in 2021. MERLIN commits to the long-term development of its professionals, ensuring 2. Continuing professional development that all its employees can fully identify with its philosophy and objectives. Hence, MERLIN regards the proactiveness of its MERLIN undertakes a series of actions professionals as key to powering their aimed at motivating and rewarding its advancement. The Company’s horizontal professionals for their engagement and structure and its workforce dynamism commitment to its business project. coupled with its different profiles allow The actions may be grouped into three professionals to define the pace and main areas: direction of their development based on their capabilities and aspirations. All 1. Performance-based remuneration professionals have the opportunity to participate in transversal projects and take Compensation is a key tool to attract and on new responsibilities during their time at retain the best talent and so MERLIN bases the Company. Cross - departmental transfers compensation on employees’ performance are encouraged and a total of six employees at work, constantly monitoring each moved to a different post and department employee’s progress. within the Group in 2020.
MERLIN offers supplemental life and In 2020 MERLIN continued to advocate accident insurance as well as health training as crucial to employees’ professional insurance for the employee’s household. development. Although the current MERLIN also offers employees flexible circumstances have made face-to-face compensation schemes, which include training difficult, training hours in 2020 training, nursery vouchers, travel passes increased markedly compared with 2019 and meal vouchers, and allow employees (4,288 hours in 2020 and 2,950 hours to benefit from tax relief. in 2019). 76 | Annual Report | 2020
4,288 h of training in 2020
Generally speaking and as in previous • In 2020 the fifth Asset Management years, activities continued to focus on three meeting took place in Madrid, attended main action areas: language, in-house and by 85 employees, including members personalised learn. of the management team and Asset Managers with different portfolios and • Language training: MERLIN extended its from corporate departments. These language learning offering to all employees meetings aim to build a common culture and also included the option of doing among the different teams and gain first- courses in Portuguese, given its growing hand knowledge of the assets and the relevance to the Group’s workforce. In activities performed at those assets and 2020, 99 employees received training in analyse possible portfolio synergies. The this area. health situation in 2020 meant that the annual meeting, which is attended by all • In-house training: MERLIN continued to employees, could not be held although offer this type of courses in 2020, which MERLIN expects to go back to holding it are taught by MERLIN’s own employees, in 2021, if circumstances allow. supported by external experts where necessary. As an example, noteworthy is • In 2020 the Employee Portal was launched the training received by employees in SAP, and currently contains information on Business Inteligence tools (PowerBi) and each employee (personal data, training, user experience for LOOM spaces. knowledge and skillsets, photographs, etc), which is particularly important in the • Personalised learning: During 2020 case of employees working at locations MERLIN also offered employees the other than corporate headquarters. The opportunity to receive external training portal also enables different formalities and personalised learning courses based such as payroll management or holiday on their professional needs in a given area. requests to be unified in one system. MERLIN expects to continue working Additionally, in light of the circumstances, in on it in the next few years, developing 2020 the training programme included a 3 a powerful and efficient employee hour on-line course on COVID-19, which has management tool. been completed by 172 employees. • Similarly, in 2020 MERLIN continued Similarly, as in previous years, all new joiners to strengthen its usual communication received training in Occupational Risk channels with its staff. The employees Prevention. receive communications by email on a regular basis, including daily press 3. A direct relationship with the employees summaries, and are subscribed to an online newspaper. These initiatives allow Thanks to the Company’s horizontal its professionals to regularly keep up to organisational structure, there is a direct date with the most relevant news stories relationship between employees and affecting the Company and the industry. specifically, between those having different Additionally, as a new initiative this year, a levels of responsibility. Nonetheless, the talk was given by the insurance company, Company’s growth in the past few years has explaining the advantages of the health also made it necessary to initiate certain insurance available to employees. As part activities and communication processes of this initiative, employees also receive an such as the following: email on healthy living at least once a month. | 77
MERLIN has also rolled out other initiatives 2. Adapting workstations to that strengthen its relationship with employees. the new situation As an example, MERLIN continued to offer temporary employment opportunities to Within the context of the “new normal”, employees’ sons and daughters who are MERLIN has implemented the necessary of legal age, allowing them to work at the measures to ensure that its professionals Group’s assets. work in a safe workstation setup.
As an example, it has installed partitions to separate workstations, intensified office COVID-19 and employees. cleaning and purchased products such Adapting working conditions as hydroalcoholic gels and face masks to the current situation which have been made available to those employees who need them.
3. COVID -19 detection testing of all employees Because of the pandemic, the Company has started up a number of extraordinary actions Since returning to the workplace, MERLIN to ensure its employees safety. has offered its employees the possibility of being regularly tested for COVID-19 (PCR, 1. Organization of the work during antigen and serological tests) free of charge. the “State of Emergency” Tests are performed on a weekly basis at the Madrid headquarters and monthly at other The health situation triggered by the start of locations, depending on the concentration the pandemic in Spain led to the roll-out of of employees at each site. remote working for all MERLIN employees during the first period of the State of Employees’ direct family members can also Emergency (March to June 2020). arrange to have a PCR test at the same price as that agreed by the Company. In light of these circumstances and in order to ensure that all employees were able to work from home, MERLIN distributed more than 100 new laptops to its employees. It is also worth noting that employees received surface laptops, which are lighter than a standard laptop and are therefore easier to carry.
Following employees’ return to the office and given the exceptional situation, MERLIN increased flexibility in terms of working hours and offered their employees the option to work from home if family circumstances so require. 78 | Annual Report | 2020
Company’s engagement Voluntary training with the community by MERLIN Professionals
MERLIN’s professionals value being part Despite the COVID-19 situation, and for the of an organisation that is committed to its fourth year running, a total of 16 employees social environment. This is evidenced by the taught courses on the University degree programmes rolled out by the Company to “Planning Intensification and Property power the development of the communities Management” at the School of Quantity in which it is present and in which its Surveying at the Universidad Politecnica de employees actively engage. Madrid. In addition, a talk was given by the CEO of the Company, Ismael Clemente. In Continuation of the CSR Plan total, MERLIN professionals dedicated about 92 hours. As part of its CSR Plan, MERLIN contributes 0.1% of gross income for the year to social MERLIN has donated the course fees programs or projects. The Company’s CSR received to the two best students on the Plan allows two types of contributions. degree course in the form of college grants, In the first place, the Company becomes with a total amount of € 3,000. involved with foundations through direct contributions. In second place, the Company also engages by doubling the contributions to social projects or programmes made 92 by employees, executives or directors, hours which may be financial or in the form of volunteering. COVID-19 and employee Considering both types of contributions, engagement with the community the Company has donated a total of 248,000 euros in direct contributions and 176,000 euros in collaboration with In addition to the above initiatives, 26 employees and 3 of its Directors. These noteworthy is the financial contribution contributions together have supported made by MERLIN’s employees to buy robots 62 foundations. to be deployed for mass COVID-19 testing.
Apart from the contributions made by the 62 Company, the employees contributed a total foundations benefited of €334,000 in this respect.
12% employees making donations
> € 420k in donations by MERLIN and its employees
Appendix | 81
EPRA METRICS
EPRA EARNINGS
(€ thousand) Notes Consolidated net profit in accordance with IFRS 56,358 Adjustments to calculate EPRA earnings 181,575 (i) changes in value of investment properties 7 86,112 Consolidated (ii) gain/(losses) on disposal of assets 14,300 income statement (iii) absorption of revaluation on investment properties - (iv) non recurring taxes n.a. (3,046) (v) share in equity method investees n.a. 19,791 (vi) difference in business combination 3 - (vii) changes in fair value of financial instruments n.a. 64,356 and cancellation costs (viii) impairment of fiscal credit - Consolidated (ix) gain/(losses) on disposal of financial instruments 62 income statement Minority interests in respect of previous adjustments - EPRA net earnings pre-specific adjustments 237,933 EPRA net earnings per share pre-specific adjustments 0.51 Company specific adjustments: 24,467 (i) LTIP provision 18 c 18,232 (ii) Opex non-overheads 18 b and c 6,235 EPRA net earnings post-specific adjustments 262,400 EPRA net earnings per share post-specific adjustments 0.56 82 | Annual Report | 2020
EPRA NRV, NTA AND NDV
(€ million) EPRA Net Asset Value Metrics EPRA NRV EPRA NTA EPRA NDV NAV (1) IFRS Equity attributable to shareholders 6,696.3 6,696.3 6,696.3 6,696.3 Include / Exclude: i) Hybrid instruments - - - - Diluted NAV 6,696.3 6,696.3 6,696.3 6,696.3 Include: ii.a) Revaluation of IP (if IAS 40 cost option is used) - - - - ii.b) Revaluation of IPUC1 (if IAS 40 cost option is used) - - - - ii.c) Revaluation of other non-current investments 37.8 37.8 37.8 37.8 iii) Revaluation of tenant leases held as finance leases - - - - iv) Revaluation of trading properties - - - - Diluted NAV at Fair Value 6,734.1 6,734.1 6,734.1 6,734.1 Exclude: v) Deferred tax in relation to fair value gains of IP 597.0 497.3 - 597.0 vi) Fair value of financial instruments 33.0 33.0 - 33.0 vii) Goodwill as a result of deferred tax - - - - viii.a) Goodwill as per the IFRS balance sheet - - viii.b) Intangibles as per the IFRS balance sheet (1.0) Include: ix) Fair value of fixed interest rate debt (190.0) x) Revaluation of intangibles to fair value - xi) Real estate transfer tax 374.4 - - - NAV 7,738.5 7,263.4 6,544.1 7,364.1 Fully diluted number of shares 469.8 469.8 469.8 469.8 NAV per share 16.47 15.46 13.93 15.68
EPRA YIELDS
Shopping (€ million) Offices Logistics centers Asset value 6,322.4 2,207.5 1,026.1 Transfer tax 147.6 76.3 34.0 Gross asset value 6,470.1 2,283.8 1,060.0 Exclude WIP & Land (700.0) 0.0 0.0 Commercial property portfolio GAV 5,770.1 2,283.8 1,060.0 Gross rents annualized 229.4 110.9 57.9 Exclude: Propex not recharged to tenants (17.3) (12.1) (4.7) “Topped-up” net rents annualized 212.0 98.8 53.1 Exclude: Incentives (5.6) (3.4) (2.1) Net rents annualized 206.5 95.3 51.0 EPRA “topped-up” yield 3.7% 4.3% 5.0% EPRA net initial yield 3.6% 4.2% 4.8%
(1) Calculated as per the previous EPRA NAV definition. From now onwards, MERLIN will report the EPRA NRV, EPRA NTA and EPRA NDV. | 83
Net Leases Other WIP TOTAL
1,845.8 444.3 389.8 12,235.9 57.2 11.1 34.7 361.0 1,903.1 455.4 424.5 12,596.9
0.0 (116.8) (424.5) (1,241.3) 1,903.1 338.6 - 11,355.5 86.1 9.9 - 494.1
(0.9) (1.5) - (36.6) 85.1 8.4 - 457.5
(0.3) (1.0) - (12.4) 84.8 7.5 - 445.1 4.5% 2.5% - 4.0% 4.5% 2.2% - 3.9% 84 | Annual Report | 2020
EPRA COST RATIO
(€ thousand) Notes 31/12/2020
Property expenses not recharged to tenants 18 b (45,454) Collection loss 18 b (1,740) Personnel expenses 18 c (39,721) Opex general expenses 18 b (12,144) Opex non-overheads 18 b and 18 c (6,235) LTIP accrual 18 c 18,232 Exclude: Investment property depreciation - Ground rent costs - Service charge recovered through rents but not invoiced separately - Expenses related to 3rd party asset management services - EPRA Cost ratio (including direct vacancy costs) (87,062)
Gross rents 8.2 503,448.0 Less: incentives n.a (62,386.0) Less: ground rent costs 0.0 Gross rental income 18 a 441,062.0
EPRA Cost ratio (including direct vacancy costs) 19.7% EPRA Cost ratio (excluding direct vacancy costs) 17.2%
Note: as a per MERLIN’s policy the company does not capitalize overheads or operating expenses. | 85
ALTERNATIVE PERFORMANCE MEASURES
In accordance with the recommendations issued We consider the rental like-for-like growth a by the European Securities and Markets Authority relevant metric to understand the evolution of (ESMA), the alternative performance measures rents of an asset or an asset category. (“APM”) are described as follows. It is calculated on an asset by asset basis and therefore it is not possible to reconcile GLOSSARY it with the financial statements. Average debt maturity (years) Gross annualized rents This APM represents the average debt duration of Passing rent as of the balance sheet date the Company until maturity. multiplied by 12. It is a relevant metric as it provides the investor We consider the gross annualized rents a relevant with the relevant information about the repayment performance metric as it represents the total commitments of the financial liabilities. amount of rents of the prevailing lease contracts at It is calculated as the addition of the pending a given time enabling the calculation of the return years to maturity of each loan multiplied by its of each asset (Gross yield). outstanding loan amount and divided by the total Given the nature of the metric, it is not possible to outstanding amount of all loans. reconcile it with the financial statements. Given the nature of the metric, it is not possible GAV to reconcile it with the Group financial statements The GAV is the Gross Asset Value as of the latest but the main information is available in the available valuation report plus the advanced consolidated financial statements. payments of turn-key projects and developments at Average passing rent cost. It represents the rent per square meter per month The GAV is a standard valuation metric for at which an asset or category of assets are rented comparison purpose, recognized on a global basis at a moment in time. in the real estate sector, and performed by an The average passing rent is a relevant performance independent external appraisal. metric as it shows the implied rents of all the The reconciliation with the financial statements prevailing lease contracts of the company at a appears in Section 5 of this report (Notes to the moment in time per square meter and per month consolidated balance sheet). enabling the comparison with market rents. Gross yield Given the nature of the metric, it is not possible to It represents the return of an asset or category of reconcile it with the financial statements. assets. It is calculated by dividing the annualized Release spread gross rent between the latest available GAV. Difference between the new rent signed and the Wault old prevailing rent on renewals (same space, same Weighted average unexpired lease term, calculated tenant) or relets (same space, different tenant) as the number of years of unexpired lease term, during last twelve months. as from the date balance sheet, until the lease The release spread provides the investor with a contract first break weighted by the gross rent of view on the prospective rental behaviour when each individual contract. negotiating with the tenants. We consider the Wault a relevant metric as it It is calculated on a lease by lease basis and provides the investor with the average term therefore it is not possible to reconcile it with the of secured leases and gives a sense of risk or financial statements. opportunity to renegotiate the prevailing lease Rents Like-for-like contracts. Amount of the gross rents comparable between Given the nature of the metric, it is not possible to two periods. It is calculated on an asset by asset reconcile it with the Group financial statements. basis excluding from both periods the rents Revenues derived from acquisitions or disposals executed in Is the addtion of the total gross rent income, such periods as well as other adjustments like early and the other operating income excluding termination penalties from lease contracts. extraordinaries. 86 | Annual Report | 2020
The reconciliation with IFRS appears in the table EPRA Earnings thereafter. Earnings from core operational activities as per EPRA’s recommendations. Accounting EBITDA The accounting EBITDA is calculated as the The reconciliation with the Financial Statements net operating income before net revaluations, appears in the Appendix of this report. amortizations, provisions, interest and taxes. EPRA NRV, EPRA NTA and EPRA NDV The accounting EBITDA is a performance metric EPRA Net Reinstatement Value: Assumes that widely used by investors to value companies, entities never sell assets and aims to represent the as well as the rating agencies and creditors to value required to rebuild the entity evaluate the level of indebtedness. EPRA Net Tangible Assets: Assumes that entities The reconciliation with IFRS metrics appears in the buy and sell assets, thereby crystallizing certain table hereafter. levels of unavoidable deferred tax EBITDA EPRA Net Disposal Value: Represents the The EBITDA is calculated as the Accounting shareholders’ value under a disposal scenario, EBITDA deducting the “non-overheads” costs and where deferred tax, financial instruments and the LTIP Provision. certain other adjustments are calculated to the full The EBITDA is a very useful metric as it excludes extent of their liability, net of any resulting tax the impact of atypical costs incurred in the period. EPRA Yields The atypical costs or “non-overheads” costs are Net Initial Yield: Annualized rental income based the ones related to the acquisition and disposal on the passing rents at the balance sheet date, of assets and indemnities among others (as less non recoverable property operating expenses, described in the IPO prospectus). divided by the market value of the property (GAV) The reconciliation with IFRS metrics appears in the increased with acquisition costs. table hereafter. EPRA “Topped-up” NIY: Adjustment to the EPRA Accounting FFO and FFO Net Initial Yield in respect of the expiration of rent Accounting FFO or Accounting Funds From free periods (or other unexpired lease incentives Operations is calculated as EBITDA less debt such as discounted rent periods and step rents). interest expenses and recurring taxes (excluding These are two relevant performance metrics widely taxes from disposals or other extraordinary used to compare the return of the real estate events). assets in the portfolio, based on the prevailing FFO is calculated deducting the non-overheads lease contracts at a given date regardless of the costs of the company from the Accounting FFO. financial structure of the company as per EPRA’s It is a relevant performance and liquidity metric recommendations. recognized on a global basis in the real estate sector. The calculation is provided in the Appendix of this report. MERLIN Properties, as a member of EPRA Given the nature of the metric, it is not possible to (European Public Real Estate Association), reconcile it with the Group financial statements. follows EPRA’s best practices reporting standards which enables the investor to better compare EPRA Vacancy Rate certain performance metrics that are specific to Estimated Market Rental Value (ERV) of vacant the real estate sector. This metrics are released space divided by ERV of the whole on a semi-annual basis and detailed in the portfolio. management report. Given the nature of the metric, it is not possible to reconcile it with the Group financial statements. EPRA costs It is calculated as total operating costs of the company divided by the gross rents net of incentives. This performance metric shows the operating efficiency on a recurring basis. The reconciliation with the Financial Statements appears in the Appendix of this report. | 87
RECONCILIATION OF THE ALTERNATIVE PERFORMANCE MEASURES WITH CONSOLIDATED FINANCIAL STATEMENTS (€ thousand) Notes FY20 FY19
Total revenues 18 a 446,132 514,853 Consolidated income Other operating income 2,640 2,799 statement Personal expenses 18 c (40,888) (6,854)
Other operating expenses 18 b (66,936) (64,473)
Accounting EBITDA 340,948 376,324
Costs related to acquisition and disposals 18 b 4,173 4,492
Other costs 18 b 894 120
Severances 18 c 1,167 328
Non-overhead costs 18 b and 18 c 6,235 4,939
Long term incentive plan 18 c 18,232 44,242
EBITDA 365,414 425,505 Financial expenses excluding debt arrangement Consolidated income (127,360) (112,415) costs statement Equity method net income n.a 16,347 6,012
IFRS16 Adjustement n.a 4,273 -
Bond repurchase n.a 6,026
Current taxes n.a (2,300) (6,030)
Extraordinary financial income n.a - 205
FFO 262,400 313,277
Non-overhead costs 18 b and 18 c (6,235) (4,939)
Accounting FFO 256,165 308,338
(€ thousand) Consolidated income Gross rental income 503,448 525,918 statement and 8.2 Revenue from rendering of services 18 a 5,070 3,327
Other net operating income n.a 110 1,387
Revenues 508,628 530,631 88 | Annual Report | 2020
LIST OF ASSETS
G.L.A Asset Location sqm AG Torre Castellana 259 Madrid 21,390 Castellana 280 Madrid 16,803 Castellana 278 Madrid 14,468 Castellana 93 Madrid 11,650 Castellana 85* Madrid 16,474 Plaza Pablo Ruíz Picasso* Madrid 31,576 Alcala 40 Madrid 9,315 Principe de Vergara 187 Madrid 10,732 Alfonso XI Madrid 9,945 Pedro de Valdivia 10 Madrid 6,721 Beatriz de Bobadilla 14 Madrid 17,055 Princesa 3 Madrid 17,810 Princesa 5 Madrid 5,693 Plaza de los Cubos Madrid 13,528 Ventura Rodriguez 7 Madrid 10,071 Juan Esplandiu 11-13 Madrid 28,008 Eucalipto 33 Madrid 7,301 Eucalipto 25 Madrid 7,368 Santiago de Compostela 94 Madrid 13,130 Parking Princesa** Madrid -
Total Madrid Prime + CBD 269,037
Ulises 16-18 Madrid 9,576 Josefa Valcarcel 48 Madrid 19,893 Alvento Madrid 32,928 Cristalia Madrid 11,712 Trianon Madrid 18,400 Ribera del Loira 36-50 Madrid 39,150 Ribera del Loira 60 Madrid 54,960 Partenon 12-14 Madrid 19,609 Partenon 16-18 Madrid 18,343 Arturo Soria 128 Madrid 3,226
Total Madrid NBA A2 227,798
*Project under development. **Below ground surface has not been taken into account for G.L.A. purposes. | 89
G.L.A Asset Location sqm AG
Torre Chamartin Madrid 18,295 Arturo Soria 343* Madrid 6,615 Manoteras 18 Madrid 7,515 Fuente de la Mora Madrid 4,482 Aquamarina Madrid 10,685 Via Norte Madrid 37,224 María de Portugal 9-13 Madrid 17,191 Las Tablas Madrid 27,184 Avenida de Burgos 210** Madrid 7,376 Manuel Pombo Angulo 20 Madrid 3,623 Avenida de Bruselas 24 Madrid 9,163 Avenida de Bruselas 26 Madrid 8,895 Avenida de Bruselas 33 Madrid 33,718 Avenida de Europa 1A Madrid 12,606 Avenida de Europa 1B Madrid 10,495 Maria de Portugal T2 Madrid 17,139 Adequa 1 Madrid 27,426 Adequa 2*** Madrid 3,710 Adequa 3 Madrid 15,937 Adequa 5 Madrid 13,790 Adequa 6 Madrid 13,789 Adequa 4* Madrid 15,793 Adequa 7* Madrid 32,109
Total Madrid NBA A1 351,050
Francisco Delgado 9A Madrid 5,496 Francisco Delgado 9B Madrid 5,400 Atica 1 Madrid 7,080 Atica 2 Madrid 5,644 Atica 3 Madrid 5,746 Atica 4 Madrid 4,936 Atica 5 Madrid 9,526 Atica 6 Madrid 3,434 Atica XIX Madrid 15,411 Cerro Gamos 1 Madrid 36,105 Alvia Madrid 23,567
Total Madrid Periphery 122,344
*Project under development. ***Including 1,200 sqm under development. **Excluded from perimeter. 90 | Annual Report | 2020
G.L.A Asset Location sqm AG Diagonal 605 Catalonia 13,793 Diagonal 514 Catalonia 9,664 Diagonal 458 Catalonia 4,174 Plaza de Cataluña 9* Catalonia 3,048 Balmes 236-238 Catalonia 6,187 Vilanova 12-14 Catalonia 16,494 Gran Vía Cortes Catalanas 385 Catalonia 5,190 Diagonal 211 (Torre Glòries) Catalonia 37,614 Diagonal 199 Catalonia 5,934 Llull 283 (Poble Nou 22@) Catalonia 31,337 Loom 22@ Ferreteria* Catalonia 2,018
Total Barcelona Prime + CBD 135,453
WTC6 Catalonia 14,461 WTC8 Catalonia 14,597 Av. Parc Logistic 10-12 (PLZFA) Catalonia 11,411 Av. Parc Logistic 10-12 (PLZFB) Catalonia 10,652
Total NBA WTC 51,121
Sant Cugat I Catalonia 15,377 Sant Cugat II Catalonia 10,008
Total Periphery 25,385
Monumental* Lisbon 25,385 Marques de Pombal 3 Lisbon 12,461 Torre Lisboa Lisbon 13,715 Central Office Lisbon 10,310 Torre Zen Lisbon 10,207 Art Lisbon 22,150 TFM Lisbon 7,837 Lisbon Expo Lisbon 6,740
Total Lisbon Prime + CBD 108,805
Nestlé Lisbon 12,260
Total Lisbon NBA 12,260
*Project under development. | 91
G.L.A Asset Location sqm AG Lerida - Mangraners Catalonia 3,228 Zaragoza - Aznar Molina Zaragoza 4,488 Sevilla - Borbolla Andalusia 13,037 Granada - Escudo del Carmen Andalusia 2,040
TOTAL OFFICES 1,322,695*
Marineda Galicia 100,475 Arturo Soria Madrid 6,069 Centro Oeste Madrid 10,876 Tres Aguas Madrid 67,691 X-Madrid Madrid 47,105 Callao 5 Madrid 11,629 Larios Andalusia 37,956 Porto Pi Mallorca 32,795 Artea Basque Country 25,922 Arenas Catalonia 31,905 Vilamarina Catalonia 32,191 Saler Valencian C. 29,360 La Vital Valencian C. 20,878 Bonaire Valencian C. 14,455 Almada Lisbon 60,098
TOTAL SHOPPING CENTERS 529,405
*Adequa 2 is excluded from the perimeter (1,326,404 if included). 92 | Annual Report | 2020
G.L.A Asset Location sqm AG A2-Coslada Madrid 28,491 A2-Coslada Complex Madrid 36,234 A4-Getafe (Cla) Madrid 16,100 A4-Getafe (Los Olivos) Madrid 11,488 A2-Meco I Madrid 35,285 A4-Pinto I Madrid 11,099 A4-Pinto II Madrid 58,990 A4-Getafe (Gavilanes) Madrid 39,591 A2-Meco II Madrid 59,814 A2-San Fernando I Madrid 11,179 A2-San Fernando II* Madrid 33,592 A2-San Fernado III* Madrid 98,924 A4-Seseña Castilla La Mancha 28,731 A2-Alovera Castilla La Mancha 38,763 A2-Azuqueca I Castilla La Mancha 27,995 A2-Azuqueca II* Castilla La Mancha 98,757 A2-Azuqueca III* Castilla La Mancha 51,000 A2-Cabanillas I Castilla La Mancha 70,134 A2-Cabanillas II Castilla La Mancha 15,078 A2-Cabanillas III Castilla La Mancha 21,879 A2-Cabanillas Park I A Castilla La Mancha 38,054 A2-Cabanillas Park I B Castilla La Mancha 17,917 A2-Cabanillas Park I C Castilla La Mancha 48,468 A2-Cabanillas Park I D Castilla La Mancha 47,892 A2-Cabanillas Park I E Castilla La Mancha 49,793 A2-Cabanillas Park I F Castilla La Mancha 20,723 A2-Cabanillas Park II* Castilla La Mancha 210,678 A2-Cabanillas Park G-H-I-J* Castilla La Mancha 92,994 Barcelona-ZAL Port Catalonia 735,960 Barcelona-Sant Esteve Catalonia 16,811 Barcelona-PLZF Catalonia 131,624 Zaragoza-Pedrola Zaragoza 21,579 Zaragoza-Plaza Zaragoza 20,764 Zaragoza-Plaza II Zaragoza 11,421 Valencia* Valencian C. 96,572 Valencia-Almussafes Valencian C. 26,613 Valencia-Ribarroja Valencian C. 34,992 Vitoria-Jundiz I Basque Country 72,717 Vitoria-Jundiz II Basque Country 26,774 Sevilla Zal Andalusia 124,725 Sevilla Zal WIP* Andalusia 29,174 Lisbon Park Lisbon 224,864
TOTAL LOGISTICS 2,894,231
*Project under development. | 93
G.L.A Asset Location sqm AG
Tree 286,290 Caprabo Catalonia 64,252
TOTAL NET LEASES 350,542
Eurostars Torre Castellana 259 Madrid 31,800 General Ampudia 12* Madrid - Yunque Madrid 1,780 San Francisco de Sales Madrid 171 Local Plaza Castilla Madrid 311 Locales Torre Madrid Madrid 4,344 Torre Madrid residencial Madrid 120 A4-Getafe** Madrid 22,508 Novotel Diagonal 199 Catalonia 15,332 Jovellanos 91 Catalonia 4,067 Rambla Salvador Sama 45-47-49 Catalonia 1,140 Hotel Marineda Galicia 5,898 Parking Palau* Valencian C. - Bizcargi 1 1D Basque Country 46
TOTAL OTHER 87,517
* Below ground surface has not been taken into account for G.L.A. purposes. **Project under development. Edition MERLIN Properties Design and layout Addicta Diseño Corporativo
Paseo de la Castellana, 257 28046 Madrid +34 91 769 19 00 [email protected] www.merlinproperties.com