Merlin Pptys Socimi Ord

Good evening, everyone. Thank you for joining Merlin's 9M25 Trading Update. As we always do on Quality Results, our CEO, Ismael Clemente, will briefly walk you through the main highlights of the period, and we will then open the line for Q&A. For those of you who want to raise questions, please press star, followed by number five. With no further delay, I pass the floor to Ismael. Thank you.

Thank you, Ines.

Welcome to the nine-month 2025 results presentation by Merlin Properties. The quarter from 30th of June to 30th of September has been pretty productive for the company. The company has performed like a Swiss clock, particularly in the traditional asset classes. The evolution of gross rents like for like has been plus 3.4%. with relatively neutral variation in occupancy. In fact, we have lost approximately 10 basis points. 6.4% FFO per share year-on-year as a result of a better contribution to the margins of the data center division, and a 5.7% increase in the MTA per share year-on-year, which together with the dividend takes the theoretical PSR to plus 8.4% in the period. The activity in offices, logistics, and shopping centers has been strong, as commented, with more than 700,000 per meters transactions during the first nine months of the year. You know, the FFO increased 6.4 despite higher financial expenses Please take into account that the bond issuance in our budget was forecast for the end of October, and we ended up doing it in the last week of August. That means an excess of cash, not so well remunerated in cash at banks, but slightly higher financial costs, which, of course, erode part of our margins. The occupancy remains very, very high, 95.5%. and what is important, remarkably stable. I mean, there are ups and downs, of course. Now logistics is going a little bit down, but shopping centers are going a little bit up. But the end result is that the overall occupancy of the company is very, very stable. In terms of data centers, the mega plan continues deploying very successfully. The European Union is playing its usual role, so the permission That was originally earmarked for the end of October, has been postponed to December. And the decision-making, which initially was end of December, is now going to be end of April. So, the European Union is approximately four months delayed for now. And, you know, that has wiped out part of the competitive advantage of participating in the EU Gigafactory program that was basically to bring forward approximately one year the execution of phase three. I mean, we have, you know, wasted a little bit of time. I mean, we have netted off four months out of the 12 that we had in mind that would eventually benefit the company in terms of bringing forward phase three. The good thing, I mean, the positive of the Gigafactory program is that if selected, 180 megawatts of phase two will be led at once. That is, of course, super important for the company because it will significantly risk phase two out of 246. 180 will be gone in one second. However, with the delays, we have decided to start found in the market for Fairmax. I mean, we don't want to depend on the Gigafactory program because it's a little bit too complicated. It's not really our ecosystem. I mean, we are a private company and it's complicated to swim in that ocean full of sharks. And so we are targeting only 48 companies. Megawatts by end of April pre-commercialized for phase two, which is more than we anticipated. Twenty of those are now already in an advanced phase of documentation. And the other 28 for the moment is a ROFO that we will try to document between now and April that will correspond to the full capacity of the Bilbao Arasur building number two. And then we will move into building number one. And we have just started also due diligence in the facilities for just another client. The pros and cons of the European Union program is that as a clear con, we have restricted commercialization, only European names. So the final client of computing has to be European. And as you can imagine, this is, you know, narrowing a little bit the scope of our commercialization efforts. So, you know, the good thing is that if everything goes well, you know, part of the offtake will be done by the European Union. However, we are starting to feel that if we simply lift the restriction, we will be able to commercialize without the help of the European Union. It's probably too complicated for us. be very important because I know some of you believed that the CAPEX plan for this year was stringent. The CAPEX commitments for 2025 are not only well on track, will probably be exceeded. I mean, depending on just one thing that we need to do during the month of December, we believe we will exceed the CAPEX commitments that were scheduled for 2025. So, the deployment of the phase two of data centers is well on track. We haven't valued the assets in the period, so the NTA per share is virtually the same we used to have with the generation of cash in the period. And in terms of business performance, offices have achieved like for like year on year of 3.8%, which is, you know, very, very interesting. The release spread cosmetically looks like 0.2% owing to the Tecnica-Turunida deal we did at the beginning of the year. But in the absence of that deal, it is 5.0%. So the thesis that we have commented with all of you in some occasions about the acceleration of rent in Madrid as a consequence of the destruction of stock owing to the rest of the conversion, let's say, wave, it's clearly proving to be right. In logistics, the like-for-like is only 1.7, but you might notice that the risk spread is 5.7. So, the only reason why the like-for-like is lower is because we have lost 200 bps of occupancy. But, you know, if and when we start recovering occupancy, the like-for-like will start recovering because the prospectus increase of rents, which is evidence on the risk spread, continues to be very, very, very sound. And in shopping centers, it's been a surprising quarter with a very interesting evolution of sales and footfall figures. The like for like is 3.5%, but the risk spread is 4.2%, which is, you know, remarkable, given also that We have recently increased a little bit the stock as a consequence of the inauguration of the extension of Marinera in La Coruña. So, overall occupancy is 95.5, slightly worse than 30th of June, but better than the same period last year. And, well, you know, basically the performance in all asset classes is I mean, the company is really, really doing a very good job in all the asset classes. And without further extension of the explanation, I will, you know, open the floor for Q&A because I'm sure given what has happened today in the market, you will have lots of questions regarding many aspects of the life of the company, including very probably data centers, which, by the way, is one of the things in which the company is not having any problems. But, okay, let's open the floor for Q&A, and happy to take your questions. And Inés and Fran will be today a little bit more active than in other calls, because I am not physically with them in the Madrid office. I am At my hometown, at my little village, I have had a personal circumstance, sad one, that keeps me here. So, I am attending the call on a remote basis. So, eventually, Ines and Fran will take today a little bit more protagonism on the answer to your questions, but I will be here, and you can also address questions particularly to me if you so wish.