NOVEMBER 2016 MERLIN PROPERTIES COMPANY OVERVIEW

Transcription

1 NOVEMBER 2016 MERLIN PROPERTIES COMPANY OVERVIEW

2 DISCLAIMER This presentation has been prepared by MERLÍN Properties, SOCIMI, S.A. (the Company) for informational use only. The information contained in this presentation does not purport to be comprehensive or to contain all the information that a prospective purchaser of securities of the Company may desire or require in deciding whether or not to purchase such securities, and has not been verified by the Company or any other person. The information contained in this document is subject to change without notice. Neither the Company nor any of affiliates, advisors or agents makes any representation or warranty, express or implied, as to the accuracy or completeness of any information contained or referred to in this document. Each of the Company and its employees, officers, directors, advisors, agents or affiliates expressly disclaims any and all liabilities whatsoever (in negligence or otherwise, whether direct or indirect, in contract, tort or otherwise) for any loss howsoever arising from any use of this presentation, the information contained or referred to therein, any errors therein or omissions therefrom or otherwise arising in connection with this presentation. Neither the Company, nor any of its affiliates, advisors or agents undertakes any obligation to provide the recipients with access to additional information or to update this document or to correct any inaccuracies in the information contained or referred to therein. Certain statements in this document regarding the market and competitive position data may be based on the internal analyses of the Company, which involve certain assumptions and estimates. These internal analyses may have not been verified by any independent sources and there can be no assurance that the assumptions or estimates are accurate. Additionally, certain information in this presentation may be based on management accounts and estimates of the Company and may have not been audited or reviewed by the Company s auditors, whereas the information on Metrovacesa S.A. and on certain competitors contained herein is based on publicly available information which has not been verified by the Company. Accordingly, recipients should not place undue reliance on this information. This information is provided to the recipients for informational purposes only and recipients must undertake their own investigation of the Company. The information providing herein is not to be relied upon in substitution for the recipient s own exercise of independent judgment with regard to the operations, financial condition and prospects of the Company. Neither this presentation nor any copy of it shall be taken, transmitted into, disclosed, diffused, send, published or distributed in the United States, Canada, Australia or Japan. The distribution of this presentation in other jurisdictions may also be restricted by law and persons into whose possession this presentation comes should inform themselves about and observe any such restrictions. In particular, any offer that might result from the transaction herein escribed will not be made, directly or indirectly, in the United States of America, or by use of mails, or by any means or instrumentality (including, without limitation, facsimile transmission, telephone and internet) of interstate or foreign commerce of, or any facilities of any national securities exchange of, the United States, Canada, Australia or Japan. The securities of the Company have not been and, should there be an offering, will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act) and, subject to certain exceptions, may not be offered or sold in the United States. The securities of the Company have not been and, should there be an offering, will not be registered under the applicable securities laws of any state or jurisdiction of Canada or Japan and, subject to certain exceptions, may not be offered or sold within Canada or Japan or to or for the benefit of any national, resident or citizen of Canada or Japan. THIS PRESENTATION DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER FOR SALE OR SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES IN THE UNITED STATES OR IN ANY OTHER JURISDICTION, NOR SHALL IT OR ANY PART OF IT FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH ANY CONTRACT OR COMMITMENT TO SELL OR PURCHASE SHARES. ANY DECISION TO SELL OR PURCHASE SHARES IN ANY OFFERING SHOULD BE MADE SOLELY ON THE BASIS OF PUBLICLY AVAILABLE INFORMATION. This presentation may include forwardlooking statements. These forwardlooking statements involve known and unknown risks, uncertainties and other factors, which may cause such actual results, performance or achievements, or industry results, to be materially different from those expressed or implied by these forward-looking statements. These forward-looking statements are based on numerous assumptions regarding the present and future business strategies of the Company and the environment in which they expect to operate in the future. Forward-looking statements speak only as of the date of this presentation and the Company expressly disclaim any obligation or undertaking to release any update of, or revisions to, any forwardlooking statements in this presentation, any change in their expectations or any change in events, conditions or circumstances on which these forwardlooking statements are based. In reviewing this presentation, the recipient is agreeing to, and accepting, the foregoing restrictions and limitations. ı 2 ı

3 COMPANY OVERVIEW November 2016 MERLIN at a glance 4 Deepening on Metrovacesa Integration 9 Portfolio performance (excluding MVC) 25 Investment activity 30 Appendix 41

4 MERLIN AT A GLANCE

5 MERLIN at a glance Strategy A CLEARLY DEFINED STRATEGY INSPIRED BY THE BEST U.S. REIT PRACTICES Company Listed REIT, member of the Spanish Stock Exchange (IBEX-35), with a large, diversified, high-yielding asset base 9.7bn GAV and ca. 4.5bn Market Cap Operating in Spain and Portugal Critical mass across several commercial property classes Governed by the best REIT practices Assets Focused on high quality commercial real estate (Core/Core Plus) Target portfolio by 2018: Office (40%) high-street retail (20-25%) shopping centers (20-25%) and logistics (10-15%) Selective development focused on AAA buildings Ambitious efficiency program to achieve LEED / BREEAM certification over 90% of the portfolio by 2018 Capital structure Investment grade capital structure: BBB rating from S&P Baa2 rating from Moody s Target annual levered return of 8-10% Attractive, sustainable dividend yield Management Maximizes profitability of the existing portfolio and seeks to enhance quality and returns through new acquisitions Acquisitions focused on under managed properties with upside potential Limited rotation of assets targeting mature product Retains best-in-class internal asset management teams to optimize portfolio performance ı 5 ı

6 MERLIN at a glance History TWO INTENSE YEARS POSITION MERLIN AS THE LEADING SPANISH REIT AND AMONG THE TOP 10 EUROPEAN REITS Acquisition of Tree portfolio (888 BBVA branches) for 740m of equity July 2014 Acquisition of 17 assets for an aggregate amount of 652m July 2014 June 2015 Acquisition of Testa for an equity value of ca. 2.0bn creating the leading Spanish RE company June 2015 Acquisition of 43 assets and ZAL port for an aggregate amount of 325m Sep 2015 Jan 2016 Acquisition of 3 logistic assets in Spain and 2 office buildings in Portugal for an aggregate amount of 142m March 2016 Acquisition of Metrovacesa for an equity value of ca. 1.7bn June 2016 Acquisition of Saba Parques Logisticos for an equity of 115m Oct 2016 Merger of Testa and Metrovacesa in MERLIN Oct 2016 June 2014 Dec 2014 May 2015 July 2015 Dec 2015 Dec 2015 Feb 2016 April 2016 Oct 2016 Oct ,290m IPO Refinancing of Tree debt 940m 614m Capital increase 1,034m capital increase to partially finance the Testa acquisition Inclusion in IBEX 35 Index Refinancing of Testa debt and repayment of the Testa acquisition bridge loan ( 1.7bn) BBB S&P rating Inaugural bond issuance 850m Baa 2 Moody s rating Bond issuance 800m ı 6 ı

7 MERLIN at a glance Fast facts (Pro-forma with MVC) THE INTEGRATION OF METROVACESA BRINGS A CHANGE IN SCALE ACROSS ALL METRICS GLA 3,017,834 sqm IN STOCK GLA 502,915 sqm EXPANSION PROJECTS 1,159 # ASSETS 90% OCCUPANCY GRI (1) 453 m ANNUALIZED EPRA 5.0% GROSS YIELD PF p.s RECURRING FFO (2) WAULT 7.0 YEARS 9.7 bn GAV (3) PF 9M bn NET DEBT EPRA 5.1 bn NAV EPRA p.s NAV/SHARE PF 9M % LTV RATING BBB/Baa2 S&P/MOODY S DEBT MATURITY 6.6 YEARS SPOT 2.3% COST OF DEBT Source: Company (1) Annualized gross rents/net rents calculated as passing gross rent/net rent as of September 30, multiplied by 12 (2) MERLIN s FFO based on 1H16 reported recurring FFO ( 98.7) annualized (3) Includes June 16 appraisals ı 7 ı

8 MERLIN at a glance Portfolio #1 REIT IN OFFICE, HIGH STREET RETAIL AND LOGISTICS + #2 REIT IN SHOPPING CENTERS #1 Office #1 High street retail #1 Logistics #2 Shopping Centers Capacity to relocate tenants within MERLIN portfolio Ability to accommodate the expansionary needs of tenants Flexibility to offer multitenant or headquarter buildings Negotiation power with tenants Possibility to offer a diversity of suitable locations that fit tenants needs One-stop-shop solution for logistics operators wishing to operate across Spain Big footprint to match the rapid development of 3PL activity in Spain Reference landlord for top retailers Footprint in high GDP/capita areas in Spain Asset management opportunities through Capex 134 ASSETS (1) 1,164,677 SQM 4,190 m GAV m GRI 909 ASSETS 445,675 SQM 2,025 m GAV 98.0 m GRI Existing (2) 79 ASSETS 1,161,130 SQM 543 m GAV 43.5 m GRI On Full production (3) 91 ASSETS 1,666,007 SQM 781 m GAV 63.1 m GRI 20 ASSETS 514,719 SQM 1,804 m GAV 107m GRI (1) Excluding SPL (2) Including CILSA and SPL existing operating assets. Only accounting for 32% of CILSA s GAV and GRI (3) Including CILSA, SPL, work in progress projects at expected total investment and rents and pipeline. Only accounting for 32% of CILSA s GAV and GRI ı 8 ı

9 DEEPENING ON METROVACESA INTEGRATION ı 9 ı

10 Deepening on MVC Integration AMONG THE TOP 10 EURO REITS AND UNDISPUTED SPANISH LEADER Europe s largest diversified pure commercial REIT (1) By GAV ( billion) Player type: Shopping centers Shopping centers UK diversified UK diversified Shopping centers Office pure play Commercial and residential Commercial diversified Shopping centers Office pure play UK players Continental European players (1) Only including commercial real estate players ı 10 ı

11 Deepening on MVC Integration LARGER, BROADER, STRONGER Breakdown by asset class (1) MERLIN pre-transaction MERLIN post-transaction MERLIN pro forma (Excluding non-core) 4% 6%(2) 5% 6% 36% 2% (3) 5% (2) 3% 7% 43% 9% (5) 49% 12% 31% 6.6 Bn (4) 19% 21% 9.7 Bn (4) 20% 22% 9.1 Bn Office High street retail Shopping centers Hotels Logistics Rented residential Other (1) June 2016 appraisals + acquisitions at cost + capex - disposals (2) Other includes land and projects under development (3.7%), minority stakes (1.7%) and other miscellaneous assets (3) Corresponds to MERLIN s 34% minority stake in JV Residential Company NAV (4) Total portfolio GAV (Including land and development GAV) (5) Including current WIP at total expected investment value and SLP ı 11 ı

12 Deepening on MVC Integration HIGH YIELDING ASSETS Pro-forma EPRA gross yield per asset type (1) 4.5% 4.8% 6.0% 6.8% 5.2% 5.0% AVERAGE GROSS YIELD Office High street retail Shopping centers Logistics Hotels (1) Gross yield is calculated dividing annualized gross September rents by GAV ı 12 ı

13 Deepening on MVC Integration STABLE AND LONG-DATED Pro-forma Occupancy and WAULT (1) per asset type 78 % MVC 82 % 75 % /85 % MVC 77 % /86 % #1 irreplicable office portfolio with shorter WAULTS At acquisition Sept 16 86% 3.5 Office 100% 20.0 High street retail At acquisition 82% 2.9 Sept 16 Shopping centers 99% 4.2 Logistics 100% 3.3 Hotels 90% AVERAGE OCCUPANCY 7.0 AVERAGE WAULT YEARS Dramatic scale-up in shopping centers to benefit from the Spanish consumer recovery Resilient high street retail to navigate the cycle Leading logistic platform (1) As of 30 September 2016 ı 13 ı

14 Deepening on MVC Integration Pro-forma (1) debt summary STRONG CREDIT PROFILE WITH 75% OF DEBT UNSECURED (INCLUDES MVC) ( million) L/T S/T TOTAL Unsecured bank loans 1, ,220.0 Mortgage bank loans 1, ,138.7 Mortgage non-bank loans Unsecured bonds 2, ,350.0 Leasings Total gross debt 4, ,009.1 Net debt 4,541.3 Average interest rate (spot) 2.28% Average maturity 6.6 years Unsecured debt / Total debt 74.6% Fixed rate debt 91.9% Source: Company (1) Pro-forma includes MVC debt, October bond issuance and repayment of 200 m RFC and 500 m of MVC bridge to bond ı 14 ı

15 Deepening on MVC Integration Pro-forma (1) debt schedule and metrics FLOATING RATE EXPOSURE REDUCED TO A MINIMUM Pro-forma (1) debt schedule Unsecured bank debt Unsecured bonds Secured loan & other 1, , Pro-forma (1) debt metrics Pro-forma (2) 30/6/16 31/12/15 LTV 47.0% 47.9% 49.8% Average Interest rate (spot) 2.3% 2.4% 2.2% Debt with floating interest rate 8.1% 13.1% 56.7% Unencumbered debt (1) 74.6% 57.2% 16.5% Undrawn facilities ( m) Average maturity (years) Source: Company (1) Pro-forma includes MVC debt, October bond issuance and repayment of 200 m of RFC and 500 m of MVC bridge to bond (2) Calculated as nominal debt amount without collateral security divided by total debt ı 15 ı

16 Deepening on MVC Integration TANGIBLE EMBEDDED UPSIDE IN METROVACESA S PORTFOLIO Significant upside in MVC s recurrent FFO per share ( million) Pro-forma transaction FFO (1) Rebased PF FFO (MERLIN@1H16) (2) Commitment to tighter overheads cap MVC reaches MERLIN's 95% occupancy MVC reaches MERLIN's NRI/GRI ratio MVC at ERV rents Pro-forma FFO including MVC upsides MERLIN FFO MVC FFO Succesful integration of Testa in record time MERLIN Management has proved to have the experience and skills to execute a smooth integration Solid track record implementing asset management plans and crystallizing synergies (1) MERLIN s FFO based on 2016 Bloomberg consensus of 0.55 p.s. ( 178 m) adjusted for the deconsolidation of residential activity (- 6 m) and for the impact of the JV Residential Company(+ 10 m). (2) MERLIN s FFO based on 1H16 reported recurring FFO ( 98.7) annualized. ı 16 ı

17 Deepening on MVC Integration OVERHEAD TIGHTENED AND REDUCED STOCK PLAN Management commitment to tighten overheads cap and adjust stock plan PRE-TRANSACTION POST-TRANSACTION ONWARDS OVERHEADS CAP GREATER OF 6% OF GRI 0.6% OF NAV 5.75% OF GRI 0.575% OF NAV 5.5% OF GRI 0.55% OF NAV STOCK MANAGEMENT PLAN ABOVE HURDLE 8% ABOVE 12% HURDLE 10% OF TSR (1) 15% OF TSR 6% OF TSR 9% OF TSR (1) Total shareholders return ı 17 ı

18 Deepening on MVC Integration OFFICE LEADERSHIP REINFORCED BY INCREASED CBD PRESENCE AND DIVERSIFICATION 1 2 MERLIN post-transaction office KPIs (1) Enlarged presence in Madrid and Barcelona CBD (2) 134 # ASSETS 4,190 m GAV 190 m GRI 1,164,677 sqm GLA 3,598/sqm CAPITAL VALUE PSM 4.5% GROSS YIELD GLA Evolution ( 000 sqm) x Madrid CBD Barcelona CBD % PHYSICAL OCCUPANCY 3.5 years WAULT High quality tenants MERLIN pre-transaction MERLIN post-transaction (1) As of September 30, 2016 (2) Madrid CBD includes inside M-30. Barcelona CBD includes inside Ronda de Dalt and on the east, the beginning of 22@

19 Deepening on MVC Integration OFFICE LEADERSHIP REINFORCED BY INCREASED CBD PRESENCE AND DIVERSIFICATION 1 2 Portfolio breakdown 13% 4% 83% 42% 29% 71% BY CITY (GAV) 47% 11% BY LOCATION (1) (GAV) BY PRODUCT (GLA) Madrid Barcelona Other CBD New business areas Periphery Multi-tenant Single-tenant (1) Only includes assets located in Madrid and Barcelona ı 19 ı

20 Deepening on MVC Integration DRAMATIC SCALE-UP IN SHOPPING CENTERS, BECOMING #2 PLAYER IN SPAIN 1 2 MERLIN post-transaction shopping centers KPIs (1) Significant upgrade in scale 20 # ASSETS 514,719 sqm GLA 1,804 m GAV 107 m GRI 6.0% GROSS YIELD 82%/88% (2) PHYSICAL OCCUPANCY GLA Evolution ( 000 sqm) MERLIN pre-transaction 3.1x MERLIN post-transaction 3,506/sqm CAPITAL VALUE PSM 2.9 years WAULT 100 m FOOTFALL (LTM) Top-tier tenants #assets (1) As of 30 September 2016 (2) Excluding Opción

21 Deepening on MVC Integration DRAMATIC SCALE-UP IN SHOPPING CENTERS, BECOMING #2 PLAYER IN SPAIN 1 2 on par with the #1 player Ranking of Spanish shopping center players Player Owned GLA (sqm) 1 Unibail-Rodamco 570k sqm 2 MERLIN 515k sqm 3 Klepierre 359k sqm 4 CBRE GI ~ 325k sqm (2) 5 LAR 312k sqm (2) Estimated ı 21 ı

22 Deepening on MVC Integration LEADING LOGISTICS PLATFORM Logistics KPIs WIP to boost stock GLA within the next 2 years Existing 79 # ASSETS 20m/ 43.5m GRI (1) (100% attributed) 000 sqm ,666 1,161,130 GLA 6.8%/8.0% GROSS YIELD (1) m/ 543m GAV (1) 99.1%/93.4% PHYSICAL OCCUPANCY (1) Owned assets WIP ZAL existing ZAL WIP SABA existing Total Including WIP WIP Top-tier tenants 10 # ASSETS 19m ESTIMATED GRI 471,276 GLA 8.2% YoC (2) 230m TOTAL INVESTMENT (1) Reported/Average including attributable results from CILSA and SPL. (2) Yield on cost. ı 22 ı

23 Deepening on MVC Integration ENHANCED OPTIONS FOR NON-CORE BUSINESSES 1 2 Pro-forma Rented residential KPIs (1) Geographical split (by GLA) 47 # ASSETS 36 m GRI 361 m NET DEBT 4,706 # UNITS 3.4% GROSS YIELD 34% LTV 91% OCCUPANCY 1,062 m GAV 701 m NAV 4% 5% 12% 16% 63% Madrid San Sebastian Pamplona Mallorca Other JV Residential Company to adopt SOCIMI status immediately and list within the next 2 years (2) As of September 30, 2016 ı 23 ı

24 Deepening on MVC Integration ENHANCED OPTIONS FOR NON-CORE BUSINESSES 1 2 Pro-forma Hotels KPIs (1) Hotels GAV evolution 24 # ASSETS 35 m GRI (1) 4,495 # ROOMS 5.2% GROSS YIELD 100% OCCUPANCY 5.6% ERV YIELD ( million) x m GAV 151k GAV PER ROOM 3.3 years WAULT MERLIN pre-transaction MERLIN post-transaction #assets (1) Not including Torre Madrid s signed rent from January 2017 onwards ı 24 ı

25 PORTFOLIO PERFORMANCE (EXCLUDING MVC) ı 25 ı

26 Portfolio performance 9M 16 Leasing activity RECORD PERIOD IN LETTING ACTIVITY WITH 469K SQM CONTRACTED Offices Shopping centers Logistics stock Logistics pre-let Minority stakes 147,534 93,350 66,040 59,918 24,663 16,551 16,790 25,659 18,613 (27,347) (2,685) (18,693) (1,903) (21,938) (3,325) 71% renewed 47% renewed 100% renewed - 81% renewed Renewals Out In Net

27 Portfolio performance 9M 16 Leasing clients ATTRACTING LEADING CLIENTS Office Renewal 6,352 sqm Avenida de Bruselas 24 Renewal 5,644 sqm Atica 2 Renewal 1,897 sqm Avenida de Bruselas 24 In 1,012 sqm Juan Esplandiú Shopping centers In 991 sqm Porto Pi Renewal 553 sqm Centro Oeste Renewal 352 sqm Larios In 200 sqm Porto Pi Logistics Renewal 70,134 sqm Guadalajara- Cabanillas I In 11,450 sqm Madrid-Pinto In 2,094 sqm Madrid-Coslada Complex In 1,986 sqm Madrid-Coslada Complex ı 27 ı

28 Portfolio performance LfL Rental growth REAL, POSITIVE LFL RENTAL GROWTH ACROSS THE BOARD Commercial annualized LfL rent evolution (passing 30/09/16 vs. passing 31/12/15) ( thousand) Like for like % Renewed # Leases Rent Change Occupancy CPI Rent % LfL same space Office 15% 54 (3,273) (3,024) (258) % Excl. expiry of 2 old leases 12% 52 (12) (733) (252) % Shopping Centres 16% 85 (260) (731) (53) % Logistics 35% (26) (646) (9.58%) Excl. expiry of 2 old lease 19% (17) % TOTAL 18% 144 (3,217) (2,841) (262) (114) (0.32%) Excl. expiry of old leases 14% (816) (248) 1, % ı 28 ı

29 Portfolio performance Shopping centers evolution RETAIL METRICS WITH STRONG PERFORMANCE LTM Footfall (million) LTM Footfall evolution LTM Sales (million) (1) LTM Sales evolution (1) Marineda % % Porto Pi % % Larios % % Centro Oeste % % Arturo Soria % % Monumental % % MERLIN % % Source: Company (1) On a like-for-like basis ı 29 ı

30 INVESTMENT ACTIVITY ı 30 ı

31 Investment activity Saba Parques Logisticos DESCRIPTION Saba Parques Logísticos (SPL) is a reference player in logistics in Spain, owning landmark assets such as Parc Logistic Zona Franca (PLZF) in Barcelona and ZAL in Sevilla. The company owns 353k sqm of stock plus potential to develop a further 1.5 million sqm. PLZF is a leading logistics park with an excellent location in the Barcelona port, with direct access to the airport and 7 km from city centre. Closing expected in 4Q % Parc Logistic de la Zona Franca SABA Parques Logísticos S.A. 60% Zal Sevilla 44.4% Arasur 100% CIM Vallés 100% SPL Lisboa Norte Logistic GLA (sqm) 131, ,700 85,003 2, ,359 Land for logistic develop (sqm) - 99, , ,540 1,515,228 Land for office develop (sqm) 146, , ,006 GRI ( m) GRI less leaseholds ( m) Total VALUE DRIVERS Consolidation in Barcelona becoming #1 player in the first isochrone market. Footprint expanded towards the South (Sevilla), North (Vitoria) and West (Lisbon) of the Iberian Market. KEY METRICS 325k sqm 48k sqm Stock logistics Logistics development Stock office & other 1.5m sqm 149k sqm 189m GAV Office & other development 14.1m GRI less leasehold costs >9.0% Yield on cost (1) (1) Calculated as GRI less leaseholds divided by value ex land for development. ı 31 ı

32 Investment activity Saba Parques Logisticos - PLZF EXCELLENT LOCATION IN MAIN & MAIN LOGISTICS AREA OF BARCELONA 1ST ISOCHRONE ADJACENT TO ZAL PRAT AND ZAL BARCELONA (OPERATED BY MERLIN PROPERTIES) PLZF ZAL BCN El Prat Airport ZAL Prat Port of Barcelona ı 32 ı

33 Investment activity Saba Parques Logisticos PLZF TOP-TIER TENANTS: CORREOS, AIR PHARMA, LOGISTA, ASM, CELLNEX, ABERTIS ı 33 ı

34 Investment activity Saba Parques Logisticos ZAL Sevilla EXPANDING FOOTPRINT TO MAIN LOGISTICS HUB IN SOUTHERN SPAIN WITH TOP TENANTS SUCH AS DECATHLON, AIRBUS, NORBERT DENTRESSANGLE ı 34 ı

35 Investment activity Adequa LARGE CLASS A BUSINESS PARK WITH THE CLOSEST LOCATION TO MADRID CBD DESCRIPTION Best located business park within the A-1 corridor, one the most consolidated office markets in Madrid, benefiting from an excellent visibility from both A-1 and M class-a office buildings (2 pending development) and 1 service building with an aggregate GLA of 120,814 sqm (44,886 sqm to be developed). Office stock fully occupied by Renault, Técnicas Reunidas and Costa Cruceros. Funding in December VALUE DRIVERS #1 player in A-1 corridor (>360k sqm owned). Broadened breadth of product in business parks. KEY METRICS 100% Ownership 75,928 sqm Stock GLA 44,886 sqm Development GLA 380.0m 57.2m Price Capex 98% Occupancy 19.4m Annual GRI 27.1m Annual ERV upon full development 6.2% ERV yield on cost Telefónica HQ Las Tablas BBVA HQ Adequa Business Park Four Torres Business Area Plaza de Castilla Arroyo de la Vega To Madrid city center: 8 minutes A-1 Avda. de Bruselas Avda. Europa Sanchinarro Isla Chamartín Manoteras To Barajas airport 8 minutes ı 35 ı

36 Investment activity Adequa 4 CLASS A OFFICE BUILDINGS / 2 BUILDINGS FOR FUTURE DEVELOPMENT / 1 SERVICE BUILDING Building 1 27,399 sqm Renault Renault Renault Building 6 13,789 sqm Building 7 (Projected) 29,095 sqm Building 5 13,790 sqm Building 2 5,013 sqm Building 3 15,937 sqm Building 4 (Projected) 14,790 sqm Phase I Phase II Phase III ı 36 ı

37 Investment activity Adequa OVERVIEW ı 37 ı

38 Investment activity Adequa OVERVIEW ı 38 ı

39 Investment activity Arturo Soria Plaza ACHIEVED FULL OWNERSHIP OF A LANDMARK URBAN SHOPPING CENTER DESCRIPTION Prime urban shopping center in Arturo Soria (East of Madrid) in a high-end residential area. Excellent connections to the A2 and the M30/M40 highways. The property comprises a total GLA of 6,965 sqm, divided into two floors of retail and two floors of parking. The shopping center has 82 units, with renowned brands such as Massimo Dutti, Purificación Garcia, Bimba y Lola, Zara Home, Lateral and Sanchez Romero supermarket. VALUE DRIVERS Refurbishment aimed at achieving image modernization, enhancement of terraces experience and increase visibility Definition of new tenant mix Consolidation of food offer KEY METRICS 100% Ownership Freehold Title 4.5m Annual GRI 100% Occupancy 5,974 sqm (1) GLA 71.6m Acq. price PERFORMANCE LTM Sep - 15 Dec - 15 Sep - 16 Annual GRI ( M) (1) Annual NRI ( M) Occupancy (%) (1) Excludes owner operated supermarket of 991 sqm GLA ı 39 ı

40 Investment activity Ática V office building CONSOLIDATION IN ATICA BUSINESS PARK DESCRIPTION KEY METRICS Ofice building located in the Ática Business Park in Pozuelo de Alarcón (Madrid), where MERLIN now owns 6 of the 7 buildings in the park. The building comprises a GLA of 8,934 sqm and is 100% leased to Transcom, Paradigma, Layalcenter, Tecnitasa, Asentis and Kappa. The building is located 8 km from Madrid and 22 km from Adolfo Suarez Madrid Barajas Airport. Quick access to the highway through Vía de las Dos Castillas (M-503) and excellent public transport connections. 100% Ownership Freehold Title 1.2m Annual GRI 100% Occupancy 10,293 sqm (1) GLA 23.0m Acq. price MERLIN Atica XIX Business Park MERLIN Atica Business Park Atica V Zielo Shopping Center Metrovacesa MERLIN MERLIN VALUE DRIVERS Consolidate ownership of a good performing business park. Pozuelo Other owner Excellent track record, with strong demand and rents increasing. (1) Of which 1,359 sqm correspond to below ground storage areas ı 40 ı

41 APPENDIX ı 41 ı

42 Appendix Office - Madrid ı 42 ı

43 Appendix Office - Madrid prime and CBD Castellana, 280 Eucalipto, 25 Plaza Castilla Castellana, 278 M-30 Ventas bullring Cuzco Bernabeu Stadium Eucalipto, 33 Lima Nuevos Ministerios Azca Avda. America Castellana, 259 Castellana, 93 Ppe. Vergara, 187 Gregorio Marañón Maria de Molina Emilio Castelar Príncipe de Vergara Bravo Murillo Pza. Trias Bertran, 7 Castellana, José Abascal Serrano Paseo de la Castellana Colón Calle Alcalá Retiro P. Valdivia, 10 Puerta de Alcalá J.M. Churruca Cibeles Alfonso XI, 6 Bank of Spain Madrid Town Hall V. Rodríguez, 7 Alcalá, 45 Parliament Alcalá, 40 Princesa, 3 Princesa, 5 Gran Vía ı 43 ı

44 Appendix Office - Madrid (I) MERLIN Metrovacesa 1. Torre Castellana Castellana Castellana 278 Location: CBD GLA: 21,390 sqm Location: CBD GLA: 16,961 sqm Location: CBD GLA: 14,468 sqm 4. Castellana Carlos Trías Bertrán 7 6. Castellana Location: CBD GLA: 11,651 sqm Location: CBD GLA: 31,609 sqm Location: CBD GLA: 15,254 sqm 7. Príncipe de Vergara Alfonso XI 6 9. Pedro de Valdivia 10 Location: CBD GLA: 10,732 sqm Location: CBD GLA: 10,917 sqm Location: CBD GLA: 6,721 sqm 10. Churruca 11. Alcalá Alcalá 40 Location: CBD GLA: 17,358 sqm Location: CBD GLA: 18,655 sqm Location: CBD GLA: 9,315 sqm ı 44 ı

45 Appendix Office - Madrid (II) MERLIN Metrovacesa 13. Princesa Princesa Ventura Rodríguez 7 Location: CBD GLA: 17,810 sqm Location: CBD GLA: 17,810 sqm Location: CBD GLA: 10,070 sqm 16. Juan de Mariana Juan Esplandiú Eucalipto 33 Location: CBD GLA: 3,046 sqm Location: CBD GLA: 28,008 sqm Location: CBD GLA: 7,185 sqm 19. Eucalipto Ulises Josefa Valcárcel 48 Location: CBD GLA: 7,368 sqm GLA: 9,575 sqm GLA: 19,893 sqm 22. Arturo Soria Manoteras Fuente de la Mora 9 GLA: 6,615 sqm GLA: 7,567 sqm GLA: 4,482 sqm ı 45 ı

46 Appendix Office - Madrid (III) MERLIN Metrovacesa 25. Santiago de Compostela Costa Brava Isla Chamartin (WIP) GLA: 9,429 sqm Location: Periphery GLA: 16,000 sqm GLA: 16,639 sqm 28. Arroyo de Valdebebas 29. Via Norte 30. María de Portugal 9-13 GLA: 10,856 sqm GLA: 37,224 sqm GLA: 17,191 sqm 31. María de Portugal 1,1 GLA: 5,749 sqm 32. María de Portugal 1,2 GLA: 5,749 sqm 33. María de Portugal 1,3 GLA: 5,641 sqm 34. Las Tablas GLA: 27,073 sqm 35. Padres Dominicos 7 GLA: 6,176 sqm 36. El Encinar GLA: 3,623 sqm ı 46 ı

47 Appendix Office - Madrid (IV) MERLIN Metrovacesa 37. Miniparc Alcobendas I GLA: 9,429 sqm 38. Miniparc Alcobendas II GLA: 2,872 sqm 39. Av. de Bruselas 24 GLA: 9,164 sqm 40. Av. de Bruselas 26 GLA: 8,895 sqm 41. Av. de Bruselas 33 GLA: 33,718 sqm 42. Av. de Europa Location: Periphery GLA: 25,210 sqm 43. Francisca Delgado 9 Location: Periphery GLA: 10,883 sqm 44. Alvento GLA: 32,928 sqm 45. Cristalia GLA: 11,707 sqm 46. Trianón GLA: 18,441 sqm 47. Ribera del Loira GLA: 39,298 sqm 48. Ribera del Loira 60 GLA: 54,960 sqm ı 47 ı

48 Appendix Office - Madrid (IV) MERLIN Metrovacesa 49. Partenón Partenón Av. de Aragón 334 GLA: 19,289 sqm GLA: 18,343 sqm Location: Periphery GLA: 3,890 sqm 52. Ática 1, 2, 3, Ática Ática XIX Location: Periphery GLA: 7,080 sqm, 5,644 sqm, 5,746 sqm, 4,936 sqm Location: Periphery GLA: 3,790 sqm Location: Periphery GLA: 15,441 sqm 55. Cerro Gamos El Plantío 57. Conpenhague 4-8 Location: Periphery GLA: 35,498 sqm Location: Periphery GLA: 7,068 sqm Location: Periphery GLA: 5,972 sqm 58. Alvia 59. Euronova Location: Periphery GLA: 23,569 sqm Location: Periphery GLA: 32,663 sqm ı 48 ı

49 Appendix Office - Barcelona ı 49 ı

50 Appendix Office - Barcelona prime and CBD Ronda de Dalt B-20 Barrio de Gracia Sagrada Familia Pza. Glories Diagonal, 199 Diagonal Mar Balmes, Diagonal, 514 Diagonal, 458 Avenida Diagonal Vilanova Parc 22@ Parc Ciutadella Port Olimpic Pza F. Macia Paseo de Gracia Rambla de Cataluña Pza. Cataluña Catedral Barrio Gótico Barceloneta Pza. Mª Cristina Diagonal, 605 Gran Via de Las Cortes Catalanas Ronda Litoral B-10 Port Barcelona Pza. España Camp Nou Stadium Montjuïc Stadium ı 50 ı

51 Appendix Office - Barcelona (I) MERLIN Metrovacesa 1. Diagonal Diagonal Balmes City: Barcelona Location: CBD GLA: 14,795 sqm City: Barcelona Location: CBD GLA: 9,664 sqm City: Barcelona Location: CBD GLA: 6,188 sqm 4. Diagonal Diagonal Poblenou 22@ Llull City: Barcelona Location: CBD GLA: 4,033 sqm City: Barcelona Location: CBD GLA: 5,934 sqm City: Barcelona GLA: 32,552 sqm 7. Vilanova Gran Vía Cortes Citypark Cornella City: Barcelona Location: CBD GLA: 16,494 sqm City: Barcelona Location: CBD GLA: 5,190 sqm City: Barcelona Location: Periphery GLA: 12,781 sqm 10. WTC WTC Muntadas I City: Barcelona GLA: 14,461 sqm City: Barcelona GLA: 14,542 sqm City: Barcelona GLA: 24,380 sqm ı 51 ı

52 Appendix Office - Barcelona (II) MERLIN Metrovacesa 13. Muntadas II 14. Sant Cugat I 15. Sant Cugat II City: Barcelona GLA: 3,783 sqm City: Barcelona GLA: 15,379 sqm City: Barcelona GLA: 10,102 sqm ı 52 ı

53 Appendix Shopping centers ı 53 ı

54 Appendix Shopping centers (I) MERLIN Metrovacesa 1. Marineda 2. Arturo Soria 3. Fnac Callao City: A Coruña GLA: 99,925 sqm Location: 6,959 sqm (1) GLA: 11,648 sqm 4. Centro Oeste 5. Tres Aguas 6. Nassica GLA: 33,000 sqm GLA: 65,890 sqm (2) GLA: 10,007 sqm 7. Opción 8. Artea 9. Las Arenas GLA: 37,165 sqm City: Bilbao GLA: 24,230 sqm City: Barcelona GLA: 32,512 sqm 10. Vilamarina 11. La Fira 12. Porto Pi City: Barcelona GLA: 31,874 sqm City: Reus GLA: 27,454 sqm City: Mallorca GLA: 58,779 sqm 1 MERLIN owns 50%. 2 MVC own 50%. ı 54 ı

55 Appendix Shopping centers (II) MERLIN Metrovacesa 13. El Saler 14. Factory Bonaire 15. La Vital City: Valencia GLA: 23,034 sqm City: Valencia Location: 25,066 sqm City: Gandía GLA: 20,853 sqm 16. Thader 17. Larios 18. Monumental City: Murcia GLA: 48,646 sqm City: Malaga GLA: 45,076 sqm City: Lisboa GLA: 5,495 sqm 19. Centre del Mon 20. Grande Armee City: Perpignan GLA: 10,382 sqm City: Paris GLA: 8,359 sqm ı 55 ı

56 Appendix Logistics - Spain ı 56 ı

57 Appendix Logistics - Madrid ı 57 ı

58 Appendix Logistics - Madrid (I) MERLIN Metrovacesa 1. Madrid Coslada 2. Madrid Coslada Complex 3. Madrid Meco I GLA: 28,490 sqm GLA: 36,234 sqm GLA: 35,285 sqm 4. Madrid Meco II 5. Guadalajara Azuqueca I 6. Guadalajara Azuqueca II City: Guadalajara Barcelona City: Guadalajara GLA: 59,891 sqm GLA: 27,995 sqm GLA: 100,000 sqm Azuqueca Plot Madrid 7. Guadalajara Alovera City: Guadalajara GLA: 38,763 sqm 8. Guadalajara Cabanillas I City: Guadalajara GLA: 70,134 sqm 9. Guadalajara Cabanillas II City: Guadalajara GLA: 151,809 sqm 10. Guadalajara Cabanillas III City: Guadalajara GLA: 49,795 sqm 11. Madrid-Getafe GLA: 16,242 sqm 12. Madrid-Getafe (Los Olivos) GLA: 11,488 sqm ı 58 ı

59 Appendix Logistics - Madrid (II) MERLIN Metrovacesa 13. Madrid Getafe (Gavilanes) 14. Madrid Pinto GLA: 39,576 sqm GLA: 70,000 sqm ı 59 ı

60 Appendix Logistics - Barcelona ı 60 ı

61 Appendix Logistics - Barcelona MERLIN Metrovacesa 1. Barcelona-ZAL Port City: Barcelona GLA: 380,824 sqm 2. Barcelona Lliça del Vall City: Barcelona GLA: 14,911 sqm 3. Barcelona Sant Esteve City: Barcelona GLA: 16,812 sqm 4. Barcelona Granada Penedés City: Barcelona GLA: 16,758 sqm ı 61 ı

62 Appendix Logistics - Rest of Spain MERLIN Metrovacesa 1. Zaragoza Plaza 2. Zaragoza Pedrola 3. Valencia Almussafes City: Zaragoza GLA: 20,764 sqm City: Zaragoza GLA: 21,579 sqm City: Valencia GLA: 26,612 sqm 4. Vitoria - Jundiz City: Vitoria GLA: 72,717 sqm ı 62 ı

63 Appendix High Street Retail ı 63 ı

64 Appendix Hotels ı 64 ı

65 Appendix Hotels (I) MERLIN Metrovacesa 1. Eurostars Torre Castellana 5* 2. NH Sanvy 4* 3. Barceló Torre de Madrid 4* (1) Type: Urban GLA: 31,800 sqm #rooms: 474 Location: Urban GLA: 12,182 sqm #rooms: 146 Type: Urban GLA: 25,600 sqm #rooms: Paseo del Arte 4* Type: Urban GLA: 10,100 sqm #rooms: Exe Puerta Castilla 4* Location: Urban GLA: 13,180 sqm #rooms: Barceló Castellana Norte 4* Type: Urban GLA: 14,400 sqm #rooms: Eurostars Gran Madrid 4* Location: Urban GLA: 3,581 sqm #rooms: Holiday Inn Tres Cantos 3* Type: Urban GLA: 6,100 sqm #rooms: Carris Marineda 4* City: A Coruña Type: Urban GLA: 5,898 sqm #rooms: Eurostars Gran Marina 5* City: Barcelona Type: Urban GLA: 20,030 sqm #rooms: Novotel Barcelona 4* City: Barcelona Type: Urban GLA: 26,400 sqm #rooms: AC Forum Barcelona 4* City: Barcelona Type: Urban GLA: 21,414 sqm (2) #rooms: Under construction. 2 MERLIN own 50%. ı 65 ı

66 Appendix Hotels (II) MERLIN Metrovacesa 13. Tryp Aeropuerto 4* 14. Eurostars Executive 4* 15. Tryp Oceanic 4* City: Barcelona Location: Urban GLA: 10,125 sqm #rooms: 205 City: Barberá del Vallés Type: Urban GLA: 11,800 sqm #rooms: 118 City: Valencia Location: Vacational GLA: 9,308 sqm #rooms: Holiday Inn Valencia 4* City: Valencia Type: Urban GLA: 3,574 sqm #rooms: Tryp Almussafes 3* City: Valencia Type: Vacational GLA: 13,300 sqm #rooms: Playa Capricho 4* City: Almeria Type: Vacational GLA: 33,500 sqm #rooms: Costa Park 4* City: Málaga Type: Vacational GLA: 38,800 sqm #rooms: Tryp Alameda 4* City: Málaga Location: Urban GLA: 6,000 sqm #rooms: Tryp Jerez 4** City: Jerez Type: Urban GLA: 4,637 sqm #rooms: Barceló Costa Ballena Golf 4* City: Costa Ballena Location: Vacational GLA: 15,524 sqm (1) #rooms: Barceló Corralejo Bay 4* City: Las Palmas Type: Vacational GLA: 23,100 sqm #rooms: Centre del Mon 3* / 4* City: Perpignan Type: Urban GLA: 10,100 sqm #rooms: MERLIN own 32.5%. ı 66 ı

67 Paseo de la castellana, MADRID