Company overview June 2015 1 Disclaimer This presentation has - PowerPoint PPT Presentation

Company overview June 2015 1

Disclaimer This presentation has been prepared by been verifjed by any independent sources such restrictions. The securities of the This presentation may include forward- MERLIN Properties SOCIMI, S.A. (the and there can be no assurance that the Company have not been and, should looking statements. All statements “Company”) for informational use only. assumptions or estimates are accurate. there be an offering, will not be registered other than statements of historical facts Accordingly, undue reliance should not under the U.S. Securities Act of 1933, as included in this presentation, including, The information contained in this be placed on any of the industry, market amended (the “Securities Act”), or the without limitation, those regarding the presentation does not purport to be or competitive position data contained U.S. Investment Company Act of 1940, fjnancial position, business strategy, comprehensive or to contain all the in this presentation. Additionally, certain as amended (the “Investment Company management plans and objectives for information that a prospective purchaser information contained herein may be Act”). Such securities may not be offered future operations of the Company are of securities of the Company may desire or sold in the United States except on based on management accounts and forward-looking statements. These or require in deciding whether or not to a limited basis, if at all, to Qualifjed estimates of the Company and may have forward-looking statements involve purchase such securities. The information not been audited or reviewed by the Institutional Buyers (as defjned in Rule known and unknown risks, uncertainties contained in this document is subject Company’s auditors. Recipients should not 144A under the Securities Act) in reliance and other factors, which may cause to change, verifjcation and completion place undue reliance on this information. on Rule 144A or another exemption such actual results, performance or without notice. Neither the Company nor The fjnancial information included herein from, or transaction not subject to, the achievements, or industry results, to be any of affjliates, advisors or agents makes registration requirements of the Securities may have not been reviewed for accuracy materially different from those expressed any representation or warranty, express or Act. The securities of the Company have or completeness and, as such, should not or implied by these forward-looking implied, as to the accuracy or completeness not been and, should there be an offering, be relied upon. statements. These forward-looking of any information contained or referred to will not be registered under the applicable statements are based on numerous in this document. Each of the Company and This information is provided to the securities laws of any state or jurisdiction assumptions regarding the present and its affjliates, advisors or agents expressly recipients for informational purposes of Canada or Japan and, subject to certain future business strategies of the Company disclaims any and all liabilities which may only and recipients must undertake their exceptions, may not be offered or sold and the environment in which they expect be based on this document, the information own investigation of the Company. The within Canada or Japan or to or for the to operate in the future. contained or referred to therein, any errors information providing herein is not to benefjt of any national, resident or citizen therein or omissions therefrom. Neither the be relied upon in substitution for the of Canada or Japan. Forward-looking statements speak only Company, nor any of its affjliates, advisors recipient’s own exercise of independent as of the date of this presentation and THIS PRESENTATION DOES NOT or agents undertakes any obligation to judgment with regard to the operations, the Company expressly disclaim any CONSTITUTE OR FORM PART OF ANY provide the recipients with access to fjnancial condition and prospects of the obligation or undertaking to release any OFFER FOR SALE OR SOLICITATION OF additional information or to update this Company. update of, or revisions to, any forward- ANY OFFER TO BUY ANY SECURITIES document or to correct any inaccuracies looking statements in this presentation, Neither this presentation nor any copy NOR SHALL IT OR ANY PART OF IT in the information contained or referred to any change in their expectations or of it may be taken, transmitted into, FORM THE BASIS OF OR BE RELIED ON therein. disclosed or distributed in the United IN CONNECTION WITH ANY CONTRACT any change in events, conditions or Certain statements in this document States, Canada, Australia or Japan. The OR COMMITMENT TO PURCHASE circumstances on which these forward- regarding the market and competitive distribution of this presentation in other SHARES. ANY DECISION TO PURCHASE looking statements are based. position data may be based on the jurisdictions may also be restricted by SHARES IN ANY OFFERING SHOULD internal analyses of the Company, which law and persons into whose possession BE MADE SOLELY ON THE BASIS OF In reviewing this presentation, the involve certain assumptions and estimates. this presentation comes should inform PUBLICLY AVAILABLE INFORMATION ON recipient is agreeing to, and accepting, These internal analyses may have not themselves about and observe any THE COMPANY. the foregoing restrictions and limitations. 2

INDEX MERLIN at a glance 4 The portfolio 10 Financial highlights 15 Equity research 21 Appendix I. The assets 23 Appendix II. The real estate market in Spain and Portugal 36 3

MERLIN at a glance Executive Summary Strategy Portfolio 4

Executive Summary Company presentation MERLIN Properties SOCIMI, S.A. is the largest Spanish REIT listed in the Spanish Stock Exchange, with a market cap of ca. €2.25 billion 1 It is devoted to the acquisition and management of Core and Core Plus commercial real estate assets in the Iberian Peninsula. 1 As of June 5, 2015 The company generates return to shareholders through the distribution of a signifjcant cash-on-cash dividend and the value enhancement of its portfolio of assets. MERLIN Properties management consists of top qualifjed professionals with over 20 years experience in the Spanish and Portuguese real estate industry. It is led by: Ismael Clemente, CEO. Miguel Ollero, CFO. David Brush, CIO. 5

Executive Summary Key fjgures Shareholder structure 1 Marketfjeld 10 % UBS 7 % EJF 5 % Free Float 69 % Monarch 3 % Credit Suisse 3 % Goldman Sachs 3 % Key Figures €2.3bn 758,851sqm 96.7% Market cap 1 Gla owned Occupancy rate €2.3bn €135.4m 17.0years Gross porfolio value Gross rental income 2 Wault 3 1 As of May 20, 2015, according to fjlings with the CNMV. Market cap as of June 5, 2015 2 Gross annualized rents have been calculated as passing monthly rent as of 31 March, 2015, multiplied by 12 3 Weighted average unexpired lease term, calculated as of March 31, 2015 6

Strategy Pillars Low/medium risk commercial real estate assets in Spain and Portugal Target (1) to reach an annual levered return of 10% and a target (1) to reach dividend yield (2) of 4% to 6% Senior Management adds value through asset management and prudent timing of acquisitions and disposals 1 This is a target only and not a profjt forecast 2 Dividend yield calculated over original issue price (€ 10 per share) 7

Strategy Assets Commercial Properties T arget acquisitions • Offjce • Retail • Logistics • Prime Hospitality Prime offjce properties located in Madrid, Barcelona, Lisbon and, to a lesser extent, Geographies other relevant cities Dominant and urban shopping centres • Spain • Portugal up to 25% GAV with good catchment area Logistic properties located in close Gearing proximity to transport hubs • Maximum 50% LTV on a portfolio basis Good quality secondary assets with strong leases Other High street retail in city centres and certain suburban areas • No residential Primary focus on undermanaged properties • Land development only for commercial with upside potential properties producing rental stream in less Properties in locations that benefjt from than 3 years inwards FDI • NPLs restricted to 20% of Company’s consolidated GAV, with the aim to access the collateral asset in compliance with the Company’s strategy 8

Portfolio Internal division by assets classes €135m 6.1% million 1 annual gross rents gross yield on cost 2 758,851sqm 5.8% GLA gross yield on appraisal 3 Tree MERLIN Retail MERLIN Oficinas MERLIN Logística 888 assets 1 asset 9 assets 6 assets Several locations A Coruña Madrid, Barcelona and Lisbon Several locations GRI € 89.1 m 3 GRI € 18.7 m GRI € 18.5 m GRI € 9.2 m GLA 373,157 SQM GLA 106,276 SQM GLA 79,308 SQM GLA 200,111 SQM Source: Company 1 Annualized gross rents have been calculated as passing monthly gross rent at 31 March, multiplied by 12 2 EPRA gross yield on cost has been calculated as gross annualized rents as of March 31, 2015, multiplied by 12, divided by the portfolio total acquisition costs (including transaction costs) 3 EPRA gross yield on appraisal has been calculated as gross annualized rents as of March 31, 2015, multiplied by 12, divided by the Savills portfolio valuation as of December 31, 2014, plus the total acquisition costs of the assets acquired in 2015 9

The portfolio 10