INTERIM FINANCIAL STATEMENTS. for the period ended on March,

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1 INTERIM FINANCIAL STATEMENTS for the period ended on March,

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3 INDEX 1. Key aspects 5 2. Consolidated profit & loss account 9 3. Consolidated balance sheet EPRA metrics Significant events of the period 15

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5 Interim financial statements ı 5 1. KEY ASPECTS 1. MERLIN Properties Socimi, S.A. (hereinafter, MERLIN Properties or the Company) has acquired an office building and a logistics warehouse in the first quarter of the year, amounting to a total of 59,395 thousand, of which 57,935 thousand correspond to the acquisition price of the assets, and 1,459 thousand to transaction costs. 2. These acquisitions resulted in the disbursement of 38,395 thousand of MERLIN Properties equity. The remaining 21,000 thousand corresponds to the existing financing on one of the assets acquired. MERLIN Properties has renegotiated and assumed this financing. 3. After the recent acquisitions, MERLIN Properties owns a portfolio comprising 902 assets, with a gross lettable area ( GLA ) of 716,286 sqm. The acquisition price of the portfolio (including transaction costs) amounts to 2,187,228 thousand. The portfolio gross asset value, in accordance with Savills valuation as of December 31, 2014, amounts to 2,291,041 thousand. EPRA NAV (Net Asset Value) of the portfolio amounts to 1,367,243 thousand ( per share). 4. The Company recorded 1Q 2015 revenues of 32,455 thousand, EBITDA of 29,675 thousand and a net consolidated result of 19,599 thousand ( 0.15 per share). KEY ASPECTS OF THE PORTFOLIO 31/03/2015 Portfolio GAV (1) ( thousand) 2,291,041 Portfolio acquisition costs ( thousand) 2,187,228 Gross annualized rents 2015 (2) ( thousand) 132,259 Net annualized rents 2015 (3) ( thousand) 129,907 EPRA gross yield (4) 5.77% EPRA topped-up Initial yield (5) 5.67% Total GLA (sqm) 716,826 Occupancy rate 96.5% WAULT by rents (years) (6) 17.2 (1) In accordance with Savills valuation as of December 31, 2014, except for the case of the two assets acquired in 1Q 2015, which valuation has been estimated as acquisition costs of these two assets (including transaction costs) (2) Gross annualized rents have been calculated as passing monthly rent as of 31 March 2015, multiplied by 12 (3) Net annualized rents have been calculated as passing monthly rent as of 31 March 2015, multiplied by 12 (4) Calculated dividing gross annualized rents by Portfolio GAV (5) Calculated dividing net annualized rents by Portfolio GAV (6) Weighted unexpired lease term, calculated as the number of years of unexpired lease term, as from 31 March 2015, until the first break option of the lease contracts, weighted by the gross rent of each individual lease contract

6 6 ı LOCATION OF THE PORTFOLIO Marineda Vitoria A1 Madrid Buildings 1, 2 and 3 Zaragoza - Plaza A1 Madrid Building 4 WTC Almeda Park, Building 8 A1 Madrid Building 5 WTC Almeda Park, Building 6 Madrid - Getafe Valencia - Almussafes Alcalá Madrid- Coslada LOCATION OF TREE ASSETS

7 Interim financial statements ı 7 GLA PER SUBSIDIARY GROSS ANNUALIZED RENTS PER SUBSIDIARY 10 % 23 % 13 % 6 % 15 % 52 % 14 % 67 % Tree Inversiones MERLIN Retail MERLIN Oficinas MERLIN Logística GROSS YIELD PER SUBSIDIARY 8.7 % 5.3 % 6.6 % 6.7% 5.8 % MERLIN average Tree Inversiones MERLIN Retail MERLIN Oficinas MERLIN Logística OCCUPANCY AND WAULT PER SUBSIDIARY 100 % % 82 % % % MERLIN average 17.2 MERLIN average Tree Inversiones MERLIN Retail MERLIN Oficinas MERLIN Logística WAULT by rents (years) Occupancy rate

8 8 ı KEY CONSOLIDATED FINANCIAL AND ECONOMIC INDICATORS (IFRS) ( thousand) 31/03/2015 Total revenue 32,455 Gross rental income 32,178 Net rental income 32,042 EBITDA 29,675 Net profit for the period 19,599 Gross financial debt 1,186,853 Net financial debt 912,619 Net financial debt / Portfolio GAV 39.8% Earnings per share 0.15 EPRA NET ASSET VALUE ESTIMATE (1) ( thousand) 31/03/2015 Gross portfolio value 2,291,041 Gross financial debt (1,186,853) Cash and short-term financial investment 274,234 Net Financial Debt (912,619) Working Capital (11,180) EPRA NAV 1,367,242 Number of shares 129,212,001 EPRA NAV / Share (1) Company estimates. Gross portfolio value corresponds to Savills valuation as of December 31, 2014, except for the case of the two assets acquired in 1Q 2015, which valuation has been estimated at acquisition costs of these two assets (including transaction costs)

9 Interim financial statements ı 9 2. CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED ON MARCH 31, 2015 (IFRS) ( Thousand euros) ACCUMULATED Up until 31/03/2015 Net rental income 32,042 Tree Inversiones Inmobiliarias 22,265 MERLIN Retail 4,610 MERLIN Oficinas 3,715 MERLIN Logistica 1,452 Other income 413 Total operating income 32,455 Portfolio operating expenses not rechargeable to tenants (719) Personnel expenses (1,576) General expenses (485) Total operating expenses (2,780) EBITDA 29,675 Depreciation (25) Disposals 6 EBIT 29,656 Net interest expense (7,500) Change in fair value of assets and liabilities 66 PROFIT BEFORE TAX 22,222 Income Taxes (2,623) PROFIT (LOSS) FOR THE PERIOD 19,599

10 10 ı Notes to the profit and loss account Net rental income corresponds to the gross rental income of the subsidiaries deducting contractual rent discounts. Income taxes relate to the taxation arising as a result of the capital gain produced by the substitution of branches exercised by virtue of the master lease agreement by BBVA, which was signed on February 3, 2015 (45 entry branches and 42 exiting branches). Exiting branches were sold at a price equivalent to the Savills valuation giving rise to a capital gain for the difference between the sales value and the book value of the referred 42 branches. Total operating costs of the Company for 1Q 2015 were 2,780 thousand euros, of which 767 thousand euros are excluded from the overheads limitation, corresponding to portfolio operating expenses not rechargeable to tenants (719 thousand euros) and costs related to acquisition and financing of assets (48 thousand euros). Out of the total amount of the costs included within the limit of the annual overheads (2,013 thousand euros), 1,576 thousand euros correspond to personnel costs and 437 thousand euros to running costs of the Company. Personnel costs include an estimate of the variable remuneration component.

11 Interim financial statements ı CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2015 (IFRS) ASSETS 31/03/2015 EQUITY AND LIABILITIES 31/03/2015 NON-CURRENT ASSETS 2,318,051 EQUITY 1,303,892 Intangible assets 143 Share capital 129,212 Tangible assets 968 Share Premium 1,162,368 Investment property 2,029,352 Reserves 19,169 Investments in group Other shareholder 124 companies and associates contributions 540 Long-term financial Consolidated profit (Loss) 280,116 investments for the period 19,599 Deferred tax assets 7,348 Valuation adjustments (26,996) NON-CURRENT LIABILITIES 1,263,044 Long-term provisions 1,317 Long-term debt 1,242,258 Deferred tax liabilities 18,969 Accruals 500 CURRENT ASSETS 276,461 CURRENT LIABILITIES 27,576 Trade and other receivables 2,133 Short-term debt 12,763 Short-term financial investments 125,000 Trade and other payables 13,313 Accruals 94 Accruals 1,500 Cash and cash equivalents 149,234 TOTAL ASSETS 2,594,512 TOTAL EQUITY AND LIABILITIES 2,594,512

12 12 ı Notes to the Consolidated Balance Sheet The fair value of property investments as of March 31, 2015 corresponds to the Savills valuation as of December 31, 2014, with the exception of the two assets acquired this quarter, which have been valued at acquisition cost (including transaction costs), minus the fair value of the embedded inflation derivative. Long-term financial investments include the fair value of the embedded inflation derivative, for an amount of 261,689 thousand. This adjustment corresponds to the fair value of the annual rental update component included in the BBVA lease agreement. This item has been valued separately from the main contract as a financial derivative. For the valuation of the embedded derivative, the Company has based its estimation on the future total revenue derived from the contract adjusted by the credit risk of the counterparty. The breakdown of the fair value of the assets in MERLIN s portfolio, as of March 31, is as follows: ( thousand) Tree Inversiones Inmobiliarias Investment property 1,407,820 Financial investments (embedded derivative) 261,689 Subtotal Tree Inversiones Inmobiliarias 1,669,509 MERLIN Retail 281,054 MERLIN Oficinas 254,980 MERLIN Logistica 85,498 Subtotal other subsidiaries 621,532 Total fair value of the Portfolio 2,291,041

13 Interim financial statements ı 13 The balance of LT debt and ST debt includes Company s outstanding financial debt, mark-to-market of interest-rate and inflation hedging contracts, and other financial liabilities, as guarantees and deposits: The balance of Deferred tax liabilities, which amounted to 18,969 thousand, corresponded to the estimate of the tax impact of the implicit capital gain when valuing the assets of Tree Inversiones Inmobiliarias at their fair value. Long term Short term Total Outstanding principal 1,174,090 10,512 1,184,602 Accrued interest 0 2,251 2,251 Total Gross Financial Debt 1,174,090 12,763 1,186,853 Cash and short-term financial investments (274,234) Total Net Financial Debt 912,619 Cash and short-term financial investments 274,234 Arrangement expenses (28,468) (28,468) Market value of interest-rate and inflation hedging contracts 74,661 74,661 Guarantees received, deposits and other financial liabilities 21,975 21,975 Total Debt 1,242,258 12,763 1,255,021

14 14 ı 4. EPRA METRICS Performance Measure Definition 31/03/2015 EPRA Earnings ( thousand) Recurring earnings from core operational activities 22,150.2 EPRA NAV ( million) Net Asset Value adjusted to include properties and other investment interests at fair value and to exclude certain items not expected to crystalise in a long-term investment property business model 1,367.2 EPRA NNNAV ( million) EPRA NAV adjusted to include the fair value of financial instruments, debt and deferred taxes 1,280.9 EPRA Net Initial Yield EPRA topped-up NIY Annualised rental income based on the cash rents passing at the balance sheet date, less non-recoverable property operating expenses, divided by the market value of the property, increased with acquisition costs Adjustment to the the EPRA Net Initial Yield in respect of the expiration of rent-free periods (or other unexpired lease incentives such as discounted rent periods and step rents) 5.77% 5.67% EPRA earnings have been calculated as follows: RECONCILIATION OF IFRS NET INCOME WITH EPRA EARNINGS ( thousand) 31/03/2015 Consolidated Net Profit in accordance with IFRS 19,599 (i) changes in value of investment properties -66 (ii) profits or losses on disposal of investment properties -6 (iii) deferred tax in respect of adjustments +2,623 EPRA Earnings for the fiscal year 22,150 EPRA Earnings for the fiscal year per share ( ) 0.17

15 Interim financial statements ı SIGNIFICANT EVENTS OF THE PERIOD 5.1. Investments Investment activity in the first quarter of 2015 has been as follows: Alcalá acquisition On 26 March 2015, the Group acquired, through MERLIN Oficinas, an office building located in the heart of Madrid, at Alcalá 38-40, for a purchase price of 38,128 thousand. ALCALÁ Acquisition price of the asset ( thousand) 38,128 Asset debt outstanding as of the date of purchase ( thousand) 21,000 Equity disbursement ( thousand) 17,128 Debt to acquisition price of asset 55.1% Annualized Gross Rent 2015 ( thousand) 1,985 Annualized Net Rent 2015 ( thousand) 1,912 EPRA Gross Yield 5.21% EPRA Topped-up Initial Yield (1) 5.02% Total G.L.A. (sqm) 9,315 Occupancy rate 100% WAULT by rents (years) (2) 1.8 (1) Calculated as the Gross annualized rent minus non-recoverable service charges, divided by the acquisition price of the assets (2) Weighted average unexpired lease term, calculated as number of years of unexpired lease term, as from March 31, 2015, until the first break option window of the lease contracts, weighted by the gross rent of each individual lease contract The building is located at the junction of the streets of Alcalá and Gran Vía, in an area known for its high density and retail concentration. This area is currently undergoing a redevelopment alongside the Canalejas project, which is taking place at the site of the former Banco Santander headquarters. The building has a GLA of 9,315 sqm, and is fully let to the Home Office, until 31 December 2016.

16 16 ı Madrid-Coslada logistics warehouse acquisition On 27 March 2015, the Group acquired, through MERLIN Logistica, a logistics warehouse located in Madrid, in the Logistics Transport Centre in Coslada, for a purchase price of 19,807 thousand. The asset is located in Coslada, Madrid, a consolidated logistics area, known for its good connection to the A-2 highway and proximity to Madrid (18 kms.) and the airport (7 kms.). The acquired asset has a GLA of 28,490 sqm and is fully let to Azkar (a subsidiary of Dachser, one of the leading logistics operators in Europe). MADRID-COSLADA Acquisition price of the asset ( thousand) 19,807 Asset debt outstanding as of the date of purchase ( thousand) 0 Equity disbursement ( thousand) 19,807 Debt to acquisition price of asset 0% Annualized Gross Rent 2015 ( thousand) 1,410 Annualized Net Rent 2015 ( thousand) 1,410 EPRA Gross Yield 7.12% EPRA Topped-up Initial Yield (1) 7.12% Total G.L.A. (sqm) 28,490 Occupancy rate 100% WAULT by rents (years) (2) 5.1 (1) Calculated as the Gross annualized rent minus non-recoverable service charges, divided by the acquisition price of the assets (2) Weighted average unexpired lease term, calculated as number of years of unexpired lease term, as from March 31, 2015, until the first break option window of the lease contracts, weighted by the gross rent of each individual lease contract

17 Interim financial statements ı Lease-up activity In the course of the first quarter of 2015, MERLIN has entered into lease agreements for a total amount of 14,351 sqm, out of which 3,640 sqm corresponds to new leases. Main lease agreements signed are as follows: Asset Tenant Area (sqm) Marineda Decathlon 7,673 Almussafes Marineda 5.3. Financing Truck & Wheel Karting Marineda 3,494 2,100 On 19 February 2015, MERLIN Retail signed the financing of Marineda, a loan facility agreement signed with Allianz group, with mortgage security on Marineda shopping centre. The loan has a principal amount of 133,600 thousand, a term of ten years and accrues a fixed interest rate of 2.66% with no annual principal repayment requirement and full repayment of principal upon maturity. basis points. The loan has a grace period of 4 years over principal repayment and full repayment of principal from year 5 until maturity Events post 31 March Capital increase The Board of Directors, at a meeting held on April 15, 2015, pursuant to the authorization granted by the Ordinary Shareholders Meeting of MERLIN of April 1, 2015, adopted a resolution, inter alia, to increase the share capital of MERLIN by a total nominal amount of 64,605,999 euros by the issue and placing in circulation of 64,605,999 new ordinary shares, each with a par value of one euro ( 1), of the same class and series as those currently in circulation and represented by book entries (the New Shares and the Capital Increase, respectively). The New Shares shall confer on the holders thereof the same rights as the shares currently in circulation. The New shares, with a nominal value of 1 euro and a share premium of 8.5 euros, have been fully subscribed to, have been admitted to listing and started trading on May 13th. On 13 March 2015, MERLIN Oficinas signed the financing of World Trade Centar Almeda Park building 6, a loan facility agreement signed with Deutsche Pfandbriefbank, with mortgage security on WTCAP 6. The loan has a principal amount of 22,845 thousand, a term of nine years and accrues a fixed interest rate of 2.41%, with annual principal repayment of 0.5% per annum and repayment of 95.5% of principal upon maturity. On 26 March 2015, MERLIN Oficinas renegotiated and assumed the existing financing on Alcala 38-40, a loan with Caixabank, with mortgage security over the asset. The loan has a principal amount of 21,000 thousand, a term of fifteen years and accrues a variable interest rate of 3-months Euribor plus a margin of 150

18 18 ı Madrid-Meco logistics warehouse acquisition On 17 April 2015, the Group acquired, through MERLIN Logistica, a logistics warehouse located in Meco, for a purchase price of 22,000 thousand. The asset is located in the consolidated industrial area of Meco, Madrid, in the A-2 corridor connecting Madrid with Barcelona and Zaragoza. The acquired asset has a GLA of 35,285 sqm and is fully let to Azkar (a subsidiary of Dachser, one of the leading logistics operators in Europe). MADRID-MECO Acquisition price of the asset ( thousand) 22,000 Asset debt outstanding as of the date of purchase ( thousand) 7,940 Equity disbursement ( thousand) 14,060 Debt to acquisition price of asset 36.1% Annualized Gross Rent 2015 ( thousand) 1,799 Annualized Net Rent 2015 ( thousand) 1,791 EPRA Gross Yield 8.18% EPRA Topped-up Initial Yield (1) 8.14% Total G.L.A. (sqm) 35,285 Occupancy rate 100.0% WAULT by rents (years) (2) 4.3 (1) Calculated as the Gross annualized rent minus non-recoverable service charges, divided by the acquisition price of the assets (2) Weighted average unexpired lease term, calculated as number of years of unexpired lease term, as from March 31, 2015, until the first break option window of the lease contracts, weighted by the gross rent of each individual lease contract

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20 PASEO DE LA CASTELLANA, MADRID