Merlin Pptys Socimi Ord

Good afternoon, ladies and gentlemen. Ines Arellano speaking. Welcome and thank you for joining Merlin's 90-month trading update. Today, our CEO, Ismael Clemente, will highlight the key takeaways of this set of results, and we will then open the line for Q&A. There is no presentation to follow, but the executive summary can be found in our website. We remind you that this call is being recorded, and for those of you who want to raise questions, please press star followed by number five on your telephone keypad. With no further delay, I pass the floor to Ismael. Thank you.

Thank you, Ines. Good afternoon, everyone. Welcome to Merlin's nine-month results presentation. The company has performed very, very well during the quarter. We know that this operational excellence will probably not allay your fears, which are the market fears, and are our own fears. that has been the reality. I mean, we need to enjoy while it lasts, basically. In terms of consolidated performance, gross rents have experienced an increase of 7%, with FFO up 11%. And we have achieved a remarkable 8.7% total shareholder return year-to-date, measured as variation in NAV plus dividends distributed. We have not conducted any revaluation in this quarter, so the net tangible assets figure that you will see is basically an estimate with the semiannual valuation plus the cash flow generated during the period. That strong operational performance has been all across the board. There's been occupancy increases in all asset categories. We have enjoyed attractive release spreads and sound rental growth in all of our divisions. The SFO per share stands at 0.48, 11% increase versus the same time last year, and we are on track to exceed the revisited guidance that we gave to you in the semi-annual results presentation of In fact, in the absence of an operational earthquake, we believe that we are going to be in the region of 62 cents at the end of the quarter because the fourth quarter is already highly foreseeable. I mean, we can now have a good visibility on the 31st December numbers, and we believe we are going to create around 14 cents of FFO during the quarter. We have delivered around 100,000 square meters of work in progress, which is good, will help us for the cash flow next year. I know many of you are asking about data center program. Data center program is absolutely on track. In Bilbao we have now completely covered, we have done the water typing and we have closed the structure, so that data center is performing absolutely on track. The idea will be to be delivering the first technical room around April next year for tests, and official inauguration should happen just before summer, around July, June, July next year. In Madrid and Barcelona, works are progressing also very, very well. Madrid is also very near water typing, and Barcelona is slightly delayed, but foundations are ready. Very peculiar foundations there, given the nature of the soil. In terms of office occupancy, which we know is a reason for concern for many of you, we are upping a little bit our guidance. We were working for a 91.5% that we have recently signed a large contract that together with the normal pipeline we have for the fourth quarter brings us to believe that we are going to be in the region of 92.5% at year end. With so far positive dynamics in the market in terms of leads and visits, which I know is mind-boggling that this is the reality and in fact, not yet confirmed tendency that we are starting to see a little bit more interest, better performance in the A1, in the famous or infamous A1 corridor in Madrid. The rents like for light growth was 5.6%. 9% in logistics and 6.5% in shopping centers with release spreads of 5.1, 8% and 5.3% respectively. As a trend, we have to say that we are seeing a relative flattening of the release spreads that not of the like for likes. That means basically that most clients are now a little bit more resistant to to being applied a market rent because what they say is if you are going to come next year with an inflation of 10%, I don't want to make that 10% count from a revised rent. I prefer to use that 10% in order to catch up with the market rent. So at the end, it will all show up in the like for like, but it's a trade-off in some cases between release spread and inflation pickup. In offices, the like for like is composed by around 40% CPI indexation. 40% occupancy growth, and around 20% market reviews. In logistics, it's around 50 CPI, around 30 occupancy growth, and around 20 market reviews. And in shopping centers, it's around 40% CPI, and the other 60 is performance-related, which includes occupancy, rent, and the capture of variables. This is basically how the company has been performing operationally. The results for our shareholders is that the board of directors has declared a 0.20 cents dividend on account to be paid on the 2nd of December. That will come on top of what we have already distributed during the year. So the shareholder remuneration has been excellent this year owing to the extraordinary sale of the BBVA portfolio. This is it basically. We are happy to take all of your questions. I know that the tone of the questions will probably be very negative. We feel like an Australian driving down the bush and entering the outback. So we have basically refueled our car, both the regular tank and the extra tank. We have accumulated as much water as we can carry, basically. We are carrying two spare tires on the roof rack and a repair kit. We've got two GPSs, but given our age, we are also capable of navigating with compass and sextant in case of need. And we are driving a good old Toyota, not a fancy Porsche range. So we think we are in good shape, but of course, we are not imprudent people and are subject to the same uncertainties and fears as you all are subject. So happy to take all your questions and start the conversation right now.

Thank you, Michael. Please remember that if you want to raise questions, you have to press start, followed by number five. We already have a question from Florent Laroche, from Otto. Florent, the floor is yours. Thank you.