Merlin Properties: Datacentre gains loading faster: PO raised to €19

Research evidence excerpt

Merlin Properties: Datacentre gains loading faster: PO raised to €19

iQprofile SM Merlin Properties

Key Income Statement Data (Dec) 2024A 2025A 2026E 2027E 2028E Company Sector

(EUR Millions) Real Estate/Property

Net rental income (NOI) 432 471 502 557 660

Administrative expenses -42 -55 -61 -60 -61

EBITDA 390 415 441 497 599 Company Description Net financial costs -85 -106 -98 -129 -165

Recurring profit before tax 301 305 338 363 430 Merlin Properties has grown materially since listing in June

Underlying taxation -6 -7 -8 -9 -10 2014 through three large acquisitions. The

Net recurring profit 295 297 330 354 420 transformational Testa and Metrovacesa acquisitions,

Valuation movements -5 496 586 815 968 combined with non-core disposals in hotels and residential,

Other net non-recurring items -6 -8 -10 -10 -5

have lifted the total GAV above €12bn, across a diversified

Net profit, attr. to equity shareholders 284 786 906 1,160 1,384

EBITDA margin 76% 74% 74% 75% 76% portfolio of office, retail, logistics, with small exposure to

Dividend payout ratio (% net recurring profit) 72% 79% 72% 73% 65% Lisbon (<10%). Merlin Properties' disposal of the BBVA

portfolio in 2022 for €2bn is now to be reallocated into a

Key Cash Flow Statement Data €3bn digital development pipeline.

FFO 300 302 335 360 424

Maintenance CAPEX -20 -22 -26 -30 -34

Adjusted FFO 280 280 309 330 390 Investment Rationale

Change in WCR 26 57 -39 81 -51 Merlin Properties is an interesting datacentre play in

FCF 306 337 270 411 339

Europe's new digital hub: the Iberian Peninsula. We like

Net investment/divestment -220 -507 -1,070 -1,513 -1,542

Capital increase/decrease 921 0 768 0 870 Merlin Properties' transition to a digital assets real estate

Dividends -214 -236 -237 -260 -273 firm.