MERLIN INTEGRATES METROVACESA LARGER BROADER STRONGER SEPTEMBER 2016 DISCLAIMER This presentation has been prepared by MERLÍN Properties, by the Company’s auditors, whereas the information on exceptions, may not be offered or sold within Canada or SOCIMI, S.A. (the Company) for informational use only. Metrovacesa S.A. and on certain competitors contained Japan or to or for the benefit of any national, resident or herein is based on publicly available information which has The information contained in this presentation does citizen of Canada or Japan. not been verified by the Company. Accordingly, recipients not purport to be comprehensive or to contain all the should not place undue reliance on this information. 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Additionally, certain information in this presentation may have not been and, should there be an offering, will not be be based on management accounts and estimates of the registered under the applicable securities laws of any state In reviewing this presentation, the recipient is agreeing to, Company and may have not been audited or reviewed or jurisdiction of Canada or Japan and, subject to certain and accepting, the foregoing restrictions and limitations. ı 2 ı MERLIN INTEGRATES METROVACESA July 2016 Transaction highlights 4 Metrovacesa overview 8 Transaction rationale 13 Structure and terms 23 Collateral value: creation of a leading 29 Spanish rented residential player Timetable and conclusions 32 Appendix 35 TRANSACTION HIGHLIGHTS Transaction highlights INTEGRATION OF METROVACESA: COMPELLING STRATEGIC RATIONALE • Consolidation of the #1 office portfolio in Spain, increasing exposure to Madrid and Barcelona CBD Unparalleled footprint • Dramatic scale-up in shopping centers, becoming the #2 player in Spain with presence in the regions with the highest GDP per capita Leadership • Undisputed Spanish leader across all asset categories providing the best opportunity to benefit and European from the Spanish property market recovery scale • Creation of one of the largest diversified commercial REITs in Continental Europe • Company poised for compelling short-to-medium term value and FFO growth: • Occupancy improvement Tangible • Rent reversion embedded upside • Repositioning capex • Additional revenue and cost synergies • Management commitment to tighten overheads cap and adjust stock plan • Collaterally, the transaction creates a leading Spanish rented residential platform, Enhanced while deconsolidating it from MERLIN options for • Enhances the attractiveness and liquidity of the hotel division which becomes the #1 net non-core lease hotel operator in Spain assets • NOL carry forwards of MVC to mitigate impact of non-core divestments ı 5 ı Transaction highlights STRUCTURE, TERMS AND TIMING • Spin-off of MVC into 3 business lines: • (a) commercial property (GAV €3,190 m / NAV €1,673 m / GRI €152 m) • (b) rented residential (GAV €692 m / NAV €442 m / GRI €22 m); and Transaction • (c) land bank structure • Acquisition of MVC’s commercial property in exchange for 146.7 m MERLIN shares and key terms • Resulting ownership: MERLIN shareholders 68.76%; MVC shareholders 31.24%(1) • Simultaneous merger of MVC’s rented residential platform into MERLIN’s platform • Resulting ownership: MVC shareholders 65.8%(2); MERLIN 34.2% (deconsolidation) • Land bank retained by MVC shareholders • Enlargement of MERLIN BoD to reflect new shareholding structure: 15 members • 3 Santander, 1 BBVA, 2 executives and 9 independents from MERLIN and Testa • Non-executive chairman: Mr. Rodrigo Echenique Governance • Executive vice-chairman and CEO: Mr. Ismael Clemente and • MERLIN management team to remain unchanged Management • New proposal to reduce participation levels of the MSP in Total Shareholder Return(3) • JV Residential Company: internally managed by the Testa Residencial management team under the supervision of MERLIN, through a Service Level Agreement • Transaction subject to approval of MERLIN and MVC shareholders (September 2016) Approvals • Transaction subject to antitrust approval and timing • Expected closing: Q4 2016 (1) Santander 21.95%; BBVA 6.41%; Popular 2.86%; Minorities 0.02% (2) Santander 46.21%; BBVA 13.49%; Popular 6.01%; Minorities 0.05% (3) Subject to AGM approval ı 6 ı Transaction highlights APPEALING TRANSACTION FROM A FINANCIAL PERSPECTIVE • Stock for stock transaction: MERLIN new shares issued at €11.40 per share NAV • 15.8% premium to NAV(1); 22.6% to unaffected share price(2) and 16.9% to L3M VWAP(3) accretive • Overall 5.7% accretive in NAV p.s.(1): combined company pro-forma NAV of €10.41 p.s • MERLIN’s residential portfolio contributed at a 30.1% premium to NAV (4). Highly • Very attractive acquisition capital values vs. comparable market transactions attractive • Office: €3,192/sqm(5) vs. €4,900-7,500/sqm in CBD and €2,500-4,400/sqm in non-CBD acquisition • Shopping centers: €2,735/sqm(5) vs. €2,400-4,600/sqm capital values • Hotels: €115k/room(5) vs. €132k-186k/room • Transaction FFO accretive from day 1 FFO accretive • Assumes MVC’s post-transaction overhead expenses fulfill MERLIN’s current overhead policy since year 1 • Reconfirmed commitment to distribution policy of 80% of FFO •