Merlin Properties Model Update

Research evidence excerpt

Merlin Properties Model Update

Vanessa M Guy AC Europe Equity Research

(44-20) 7742-4521 15 May 2026 J P M O R G A N

vanessa.guy@jpmorgan.com

Price Performance Summary Investment Thesis and Valuation

Investment Thesis

Merlin Properties is Spain's largest-listed REIT. The group owns

a diversified real estate portfolio. Its dominant sector exposure

is offices, although the company also owns shopping centres,

logistics, and, following the sale of the BBVA bank branch

portfolio, will invest further in logistics development and data

centres. We rate the stock OW as we see scope for enhanced

returns in data centres driven by significant demand. Overall, we

believe Merlin has a strong management team with a solid track

record, exposure to assets with structural tailwinds, and solid

YTD 1m 3m 12m balance sheet metrics – 28.6% LTV.

Abs 20.4% -1.4% 12.2% 41.9%

Valuation

Company Data

Our target price for Merlin is based on our total returns-based

Shares O/S (mn) 620 European valuation model, which takes into account whether a

52-week range (€) 15.24-10.15

Market cap ($ mn) 10,830.10 company creates or destroys value. We argue that companies

Exchange rate 0.86 that have a positive spread between returns and their weighted

Free float (%) 76.5% average cost of capital (WACC) should trade at a premium to

3M ADV (mn) 1.55

3M ADV ($ mn) 26.0 NNAV, whereas those with a negative spread should be priced

Volatility (90 Day) 29 below NNAV. We apply this spread to the invested capital,

Index - discount back, and add/subtract to our NNAV forecast to derive

BBG ANR (Buy | Hold | Sell) 23|1|0

our price target.

Key Metrics (FYE Dec)

in FY25A FY26E FY27E FY28E

Performance DriversFinancial Estimates

NOI - - - -

Adj. EBITDA 399 443 524 634

FFO per share 0.58 0.56 0.59 0.68