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Company overview May 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


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Company

  • verview

May 2015

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This presentation has been prepared by MERLIN 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

  • f securities of the Company may desire
  • r require in deciding whether or not to

purchase such securities. The information contained in this document is subject to change, verifjcation and completion without notice. Neither the Company nor any of affjliates, advisors or agents makes any representation or warranty, express or implied, as to the accuracy or completeness

  • f any information contained or referred to

in this document. Each of the Company and its affjliates, advisors or agents expressly disclaims any and all liabilities which may be based on this document, the information contained or referred to therein, any errors therein or omissions therefrom. Neither the Company, nor any of its affjliates, advisors

  • r 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 verifjed by any independent sources and there can be no assurance that the assumptions or estimates are accurate. Accordingly, undue reliance should not be placed on any of the industry, market

  • r competitive position data contained

in this presentation. Additionally, certain information contained herein may be based on management accounts and estimates of the Company and may have not been audited or reviewed by the Company’s auditors. Recipients should not place undue reliance on this information. The fjnancial information included herein may have not been reviewed for accuracy

  • r completeness and, as such, should not

be relied upon. This information is provided to the recipients for informational purposes

  • nly and recipients must undertake their
  • wn 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, fjnancial condition and prospects of the Company. Neither this presentation nor any copy

  • f it may be taken, transmitted into,

disclosed 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. 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”), or the U.S. Investment Company Act of 1940, as amended (the “Investment Company Act”). Such securities may not be offered

  • r sold in the United States except on

a limited basis, if at all, to Qualifjed Institutional Buyers (as defjned in Rule 144A under the Securities Act) in reliance

  • n Rule 144A or another exemption

from, or transaction not subject to, the registration requirements of the Securities

  • Act. 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

  • f Canada or Japan and, subject to certain

exceptions, may not be offered or sold within Canada or Japan or to or for the benefjt of any national, resident or citizen

  • f 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 NOR SHALL IT OR ANY PART OF IT FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH ANY CONTRACT OR COMMITMENT TO PURCHASE

  • SHARES. ANY DECISION TO PURCHASE

SHARES IN ANY OFFERING SHOULD BE MADE SOLELY ON THE BASIS OF PUBLICLY AVAILABLE INFORMATION ON THE COMPANY. This presentation may include forward- looking statements. All statements

  • ther than statements of historical facts

included in this presentation, including, without limitation, those regarding the fjnancial position, business strategy, management plans and objectives for future operations of the Company are forward-looking statements. These forward-looking 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

  • r 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

  • bligation or undertaking to release any

update of, or revisions to, any forward- looking statements in this presentation, any change in their expectations or any change in events, conditions or circumstances on which these forward- looking statements are based. In reviewing this presentation, the recipient is agreeing to, and accepting, the foregoing restrictions and limitations.

Disclaimer

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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

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Executive Summary Strategy Portfolio

MERLIN at a glance

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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. It is devoted to the acquisition and management of Core and Core Plus commercial real estate assets in the Iberian Peninsula.

1As of May 20, 2015

The company generates return to shareholders through the distribution

  • f a signifjcant

and the value enhancement of its portfolio of assets. MERLIN Properties management consists of top qualifjed professionals in the Spanish and Portuguese real estate industry. It is led by: Ismael Clemente, CEO. Miguel Ollero, CFO. David Brush, CIO.

€2.31 billion

1

cash-on-cash dividend with over 20 years experience

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Shareholder structure1 Key Figures

Market cap

€2.3bn

2

Gross porfolio value

€2.3bn

Gla owned

752,111sqm

Gross rental income2

€134.1m

Occupancy rate

96.7%

Wault3

17.0years

1

As of May 20, 2015, according to fjlings with the CNMV

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

Executive Summary Key fjgures

Goldman Sachs 3% UBS 7% Free Float 69% Credit Suisse 3% Marketfjeld 10% Monarch 3% EJF 5%

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Senior Management adds value through asset management and prudent timing of acquisitions and disposals Target(1) to reach an annual levered return of 10% and a target(1) to reach dividend yield(2)

  • f 4% to 6%

1 This is a target only and not a profjt forecast 2 Dividend yield calculated over original issue price (€ 10 per share)

Low/medium risk commercial real estate assets in Spain and Portugal

Strategy Pillars

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  • Offjce • Retail • Logistics • Prime Hospitality

Commercial Properties

  • Spain • Portugal up to 25% GAV

Geographies

  • No residential
  • Land development only for commercial

properties producing rental stream in less than 3 years

  • NPLs restricted to 20% of Company’s

consolidated GAV, with the aim to access the collateral asset in compliance with the Company’s strategy

Other Gearing

  • Maximum 50% LTV on a portfolio basis

Prime offjce properties located in Madrid,

Barcelona, Lisbon and, to a lesser extent,

  • ther relevant cities

Dominant and urban shopping centres

with good catchment area

Logistic properties located in close

proximity to transport hubs

Good quality secondary assets with strong

leases

High street retail in city centres and

certain suburban areas Primary focus on undermanaged properties with upside potential Properties in locations that benefjt from

inwards FDI

T arget acquisitions Strategy Assets

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Tree 888 assets Several locations GRI €89.1m3 GLA 373,157SQM 1 asset A Coruña GRI €18.7m GLA 106,276SQM 8 assets Madrid and Barcelona GRI €17.1m GLA 72,568SQM 6 assets Several location GRI €9.2m GLA 200,111SQM MERLIN Retail MERLIN Oficinas MERLIN Logística

Portfolio

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

  • f 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

gross yield on appraisal3

5.8%

million1 annual gross rents

€134m 752,111sqm

GLA

Internal division by assets classes

gross yield on cost2

6.1%

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The portfolio

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The portfolio

Madrid - Getafe Alcalá Valencia - Almussafes Madrid - Coslada Madrid - Meco WTC Almeda Park, Building 6 A1 Madrid Building 4 A1 Madrid Building 5 WTC Almeda Park, Building 8 A1 Madrid Buildings 1, 2 and 3 Zaragoza - Plaza Marineda Vitoria

Location

#

Retail/Branches Shopping centre Offjces Logistics

71 31 6 96 10 10 22 63 15 34 91 24 93 12 40 161 109

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The portfolio Breakdown

66% 14% 13% 7%

GLA breakdown per subsidiary Rents breakdown per subsidiary

Source: Company

Tree Inversiones MERLIN Retail MERLIN Ofjcinas MERLIN Logística

50% 14% 10% 26%

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The portfolio Breakdown

8.6%

Source: Company 1 Calculated dividing gross annualized rents by gross assets value, in accordance with Savills’ valuation as of December 31, 2014, except for the case of the assets acquired in 1Q 2015, which valuation has been estimated as acquisition costs of these assets (including transaction costs). EPRA gross yield on cost is 6.07% (MERLIN average)

2 Weighted average unexpired lease term, calculated as from March 31, 2015

Tree Inversiones MERLIN Retail MERLIN Ofjcinas MERLIN Logística

5.3% 6.7% 6.6% 5.8%

MERLIN average

Gross Yield per subsidiary1 Occupancy and average lease length per subsidiary

7.4 23.0

100% 89% 82% 100%

3.2 3.1

Tree Inversiones MERLIN Ofjcinas MERLIN Logística MERLIN Retail

96.7%

MERLIN average

17.0

MERLIN average

WAULT2 Occupancy rate

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The portfolio KPI’s

Source: Company

1

Total acquisition price includes purchase price plus transaction costs associated with the acquisition

2

The Company acquired Tree for an aggregate purchase price of €739m and an enterprise value of €1,578m

3

Based on Savills appraisal as of 31 December 2014 for the 2014 acquisitions and on the acquisition price for the 2015 acquisitions

4

Annualized gross rents have been calculated as passing monthly gross rent at March 31, 2015, multiplied by 12

5

Annualized net rents have been calculated as passing monthly net rent for each asset at March 31, 2015, multiplied by 12. Net rents deducts from gross rents direct property expenses non-rechargeable to tenants

6

Annualized net operating income has been calculated as passing monthly net operating income for each asset at March 31, 2015, multiplied by 12. Net operating income deducts from net rents direct collection loss and rents discounts

7

Gross yield is calculated dividing annualized gross rents by total acquisition price

8

Topped-up Yield is calculated dividing annualized net rents by total acquisition price. Adjustment to 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)

9

Net Yield is calculated dividing annualized net operating income by total acquisition price

10

WAULT by Rents Years means the weighted average unexpired lease term, calculated as of March 31, 2015

Tree Inversiones MERLIN Retail MERLIN Oficinas MERLIN Logística Combined Total acquisition price (€m)1 1,577.52 267.5 256.2 108.2 2,209.3 Market value (€m)3 1,669.5 281.1 255.0 107.5 2,313.1 Total annualized gross rents (€m)4

89.1 18.7 17.1 9.2 134.1

Total annualized net rents (€m)5 89.1 17.4 16.1 9.2 131.7 Total annualized net operating income (€m)6 89.1 16.3 15.9 8.8 130.1 Gross Yield on cost7 (%)

5.65 6.99 6.68 8.51 6.07

Gross Yield on appraisal (%)

5.33 6.65 6.71 8.56 5.80

Topped-up yield8 (%) 5.33 6.19 6.31 8.52 5.69 Net yield9 (%) 5.33 5.79 6.24 8.23 5.62 Total GLA (sqm)

373,157.0 106.276,2 72,567.6 200,110.6 752,111.4

GLA occupied (sqm) 373,157.0 94,871.3 59,206.1 200,110.6 727,345.1 GLA vacant (sqm) 0.0 11,404.9 13,361.5 0.0 24,766.3 Occupancy rate 100.0% 89.3% 81.6% 100.0% 96.7% WAULT by rents (years) 10

23.0 3.1 3.2 7.4 17.0

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Financial highlights

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Financial highlights Consolidated 1Q 2015 profjt and loss (IFRS)

Source: Company

1

Annualized gross rental income calculated as passing gross rent as of March 31st, plus the addition os Madrid-Meco annualized gross rent.

2

Annualized net rental income calculated as passing net rent as os March 31st, multiplied by 12, plus the addition of Madrid-Meco annualized net rents

Consolidated profjt and loss

MERLIN portfolio delivers €134.1 m of gross annualized rental income, with signifjcantly reduced gross-to-net leakage

1Q 2015 Annualized Gross rental income € 32.3 m € 134.1 m1 Net rental income € 32.1 m € 130.1 m2 Tree € 22.2 m MERLIN Retail € 4.6 m MERLIN Ofjcinas € 3.7 m MERLIn Logistica € 1.5 m EBITDA € 29.7 m IFRS net profit € 19.6 m IFRS EPS € 0.15

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Financial highlights Consolidated 1Q 2015 balance sheet (IFRS)

MERLIN has developed one of the largest and highest quality yielding commercial real estate portfolios in the Spanish market, with an estimated value above €2.3bn and compliant with MERLIN leverage policy

Consolidated balance sheet

March 2015 December 2014 Total assets € 2,594 m € 2,417 m Total equity € 1,304 m € 1,309 m Portolio value € 2,291 m1 € 2,232 m Gross fjnancial debt2 € 1,187 m € 1,010 m Cash € 274 m € 153 m Net fjnancial debt € 913 m € 857 m Net LTV 39.8% 38.5%

Source: Company

1

In accordance with Savills valuation as of December 31, 2014, except for the case of the three assets acquired in 2015, which valuation has been estimated as acquisition costs of these assets (including transaction costs). The March 2015 fjgure excludes Madrid-Meco. If included, portfolio value estimate is € 2.3 bn

2 Includes € 2.2 m of interest accrued

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Financial highlights EPRA metrics

Source: Company

1

Based on the gross asset value of Savills’ valuation as of December 31, 2014, except for the case of the assets acquired in 1Q 2015, which valuation has been estimated as acquisition costs of these assets (including transaction costs)

2

Calculated dividing gross annualized rents by Portfolio value. The Portfolio value has been calculated as 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 assets (including transaction costs)

3

Calculated dividing net annualized rents by Portfolio value. The Portfolio value has been calculated as Savills valuation as of December 31, 2014, except for the case of the assets acquired in 1Q 2015, which valuation has been estimated as acquisition costs of these assets (including transaction costs)

4

Calculated dividing net annualized rents minus rent-free periods (or other unexpired lease incentives such as discounted rent periods and step rents) by Portfolio value. The Portfolio value has been calculated as Savills valuation as of December 31, 2014, except for the case of the assets acquired in 1Q 2015, which valuation has been estimated as acquisition costs of these assets (including transaction costs)

EPRA metrics

March 2015 Per share EPRA earnings (NAREIT FFO) € 22.1 m € 0.17 EPRA NAV1 € 1,367 m € 10.58 EPRA NNNAV1 € 1,281 m € 9.91 On appraisal On cost EPRA gross yield2 5.80% 6.07% EPRA "topped-up" NIY3 5.69% 5.96% EPRA net initial yield4 5.62% 5.89%

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EPRA NAV

Gross Asset Value1

2,291 1,367

EPRA Net Asset Value Working capital

(11)

Net fjnancial debt

(913)

Financial highlights EPRA metrics

Source: Company EPRA NAV as of March 31, 2015. Based on the gross asset value of Savills’ valuation as of December 31, 2014, except for the case of the assets acquired in 1Q 2015, which valuation has been estimated as acquisition costs of these assets (including transaction costs)

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€ 1,184 million of debt raised, with a 9-year remaining life,

and average cost of 3.8% until December 2017 and 2.7% thereafter

IQ 2015 MERLIN

€ 178 million of debt raised in 1Q 2015 with very compelling terms

843 70 113 134 23 21 (20) 940 (827) 1.184

Jul-2014 Original Tree Debt Oct-2014 A-1 Financing Dec-2014 Tree refjnancing Feb-2015 Marineda Mar-2015 WTCAP 6 Mar-2015 Alcalá Debt amortized Debt as of 1Q 2015

Cost of debt 6.1% 2.5% Until end 2017 4.1% From end 2017 2.7% 2.7% 2.4% 1.6% Maturity (years) 3.25 7.0 9.75 10.0 9.0 14.0

Until end 2017: 3.8% From end 2017: 2.7%

9.2 years Financial highlights Debt 0verview

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Equity research coverage

Equity research

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Equity research coverage

MERLIN is covered by eight research analysts, with unanimous buy recommendation

Date Reccom Target Price Net Rental Income NAV Per Share EPS Dividend Per Share 2015 2016 2017 2015 2016 2017 2015 2016 2017 2015 0.31 2017 26-05-15 Buy 12.70 142.70 211.70 232.40 12.66 14.45 16.12 0.31 0.61 0.66 0.00 0.43 0.49 26-05-15 Buy 12.10 130.60 135.40 138.50 10.00 10.00 10.00 0.55 0.46 0.45 0.30 0.28 0.45 20-05-15 Buy 12.90 132.00 137.00 142.00 12.90 12.90 12.90 0.38 0.40 0.45 0.29 0.51 0.32 13-05-15 Overweight 13.50 147.00 202.00 221.00 11.00 12.10 13.60 0.41 0.60 0.65 0.35 0.40 0.56 27-04-15 Buy 12.85 145.00 203.00 225.00 11.00 12.06 13.16 0.39 0.50 0.57 0.31 0.46 0.45 24-02-15 Outperform 13,20 129,00 129,00 n.a. n.a. 13,20 n.a. 0,54 0,54 n.a. 0,46 0,46 n.a. 02-02-15 Buy 13,08 123,87 126,84 129,8 11,50 12,30 13,9 0,49 0,51 0,53 0,39 0,41 0,43 21-01-15 Buy 13.30 127.50 130.00 132.8 12.07 13.34 14.02 0.64 0.64 0.66 0.48 0.48 0.51

Consensus (after capital incease)1 12.81 139.46 177.82 191.78 11.51 12.30 13.16 0.41 0.51 0.56 0.25 0.39 0.45 Share Price (May 25th) 11.70 Potential Upside / (Downside) 9.5%

1Research published after capital increase includes Santander, ACF, Sabadell, Morgan Stanley and UBS

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Appendix I. The assets

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High Street Retail - Spain Tree

DESCRIPTION 883 branches and 5 buildings fully leased to BBVA with a long term agreement, 30 years for the branches (25 years left) and 20 for the buildings (15 years left). The portfolio has a total area of approximately 374,000 sqm, located in Spain across 442 municipalities and 49 provinces. Above 60% of the portfolio is located in the Top-5 regions in terms of GDP per capita.

1

Annualized 2015 GRI, including contractual rent uplift. In addition, the infmation swap income for 2015 is € 1.5 million

2

Weighted average unexpired lease term calculated as from March 31, 2015

KEY FACTS

Percent Ownership

100%

Title

Freehold

GLA

373,157 sqm

Annual GRI1

€89.1M

Occupancy

100%

No of tenants 1 Wault2

23.0 years

LOCATION

+info

71 31 6 96 10 10 63 22 109 161 15 40 91 24 34 93 12

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Shopping Center - A Coruña Marineda

DESCRIPTION Marineda is the leading shopping complex in Galicia and the second largest in Spain. Opened in 2011 as part of the “Marineda City” shopping and leisure complex, the entire complex has a built area of more than 500,000 sqm and a gross leasable area (“GLA”) of approximately 196,000 sqm. The complex, which received 15.1 million visitors in 2014, has 6,000 parking spaces. The Marineda shopping centre located just 6.6 km from the centre of A Coruña and boasts excellent connections. The centre’s catchment area covers a population of almost 2.8 million people. The centre has 100,378 sqm of GLA and an attractive and balanced retail mix, including El Corte Inglés and IKEA. KEY FACTS

Percent Ownership

100%

Title

Freehold

GLA

106,276 sqm

Parking spaces

4,500

Annual GRI1

€18.7M

Occupancy

89%

No of tenants 150 Wault2

3.4 years

LOCATION

+info

1

Annualized 2015 GRI, calculated as gross passing rents as of March 31st, 2015, multiplied by 12

2

Weighted average unexpired lease term calculated as from March 31, 2015

A Coruña

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Offjce - Madrid Madrid A-1 +info

1

Annualized 2015 GRI, calculated as gross passing rents as of March 31st, 2015, multiplied by 12

2

Weighted average unexpired lease term calculated as from March 31, 2015

DESCRIPTION The portfolio has a total GLA of 34,175 sqm and includes 5 office buildings, one with total GLA of 10,856 sqm and 331 parking spaces fully let to Vestas, an offjce complex with 3 buildings with total GLA of 17,139 sqm and 392 parking spaces let to Philips and Neoris and an empty building with a total GLA of 6,180 sqm and 132 parking spaces. All the properties are built to the highest standards and are highly visible from the A1 highway, very close to Plaza de Castilla. LOCATION

Madrid

KEY FACTS

Percent Ownership

100%

Title

Freehold

GLA

34,175 sqm

Parking spaces

855

Annual GRI1

€9.8M

Occupancy

76%

No of tenants 3 Wault2

2.2 years

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Offjce - Barcelona World Trade Center Alameda Park 6

DESCRIPTION The property consists of one office building (building no.6) built in 2008 and located in WTC Almeda Park (Cornellá). The fjve-storey building has a GLA of 14,535 sqm and 213 parking spaces, and is currently occupied on a multitenant basis. The business park comprises 7 offjce buildings and a plot of land for mixed- use development (hotel and retail). Its strategic location, just 15 minutes from the centre of Barcelona and 10 minutes from the city’s airport, coupled with its excellent connections has attracted prestigious multinational companies such as Colt T elecom, Revlon, Alstom, and Panasonic.

+info

LOCATION Barcelona LOCATION KEY FACTS

Percent Ownership

100%

Title

Freehold

GLA

14,535 sqm

Parking spaces

213

Annual GRI1

€3.5M

Occupancy

100%

No of tenants 3 Wault2

7.5 years

1

Annualized 2015 GRI, calculated as gross passing rents as of March 31st, 2015, multiplied by 12

2

Weighted average unexpired lease term calculated as from March 31, 2015

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Offjce - Madrid Alcalá +info

DESCRIPTION Offjce building located in the heart of Madrid, in Alcalá 38–40 street, in an excellent location, at the junction of the renowned streets of Alcalá and Gran Via, in an area known for its high density and retail concentration. This area is currently undergoing a remarkable redevelopment alongside the Canalejas project, which is taking place in 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. LOCATION

Madrid

KEY FACTS

Percent Ownership

100%

Title

Freehold

GLA

9,315 sqm

Occupancy

100%

Wault2

1.8 years

Annual GRI1

€2.0M

No of tenants 1

1

Annualized 2015 GRI, calculated as gross passing rents as of March 31st, 2015, multiplied by 12

2

Weighted average unexpired lease term calculated as from March 31, 2015

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Offjce - Barcelona

DESCRIPTION This class-A offjce building has a GLA of 14,543 sqm, distributed over a ground fmoor and four upper levels. The building is also equipped with over 700 sqm of storage space and 247 parking spaces. The property is partially let out to blue chip multinationals such as Panasonic, Technip and Colt Telecom. The business park comprises 7 offjce buildings and a plot of land for mixed-use development (hotel and retail). Its strategic location, just 15 minutes from the centre of Barcelona and 10 minutes from the city’s airport, coupled with its excellent connections has attracted prestigious multinational companies such as Axa, Revlon, Alstom, and Schweppes.

+info World Trade Center Alameda Park 8

LOCATION Barcelona KEY FACTS

Percent Ownership

100%

Title

Freehold

GLA

14,543 sqm

No of tenants 3 Wault2

1.0 years

Annual GRI1

€1.9M

Occupancy

64%

1

Annualized 2015 GRI, calculated as gross passing rents as of March 31st, 2015, multiplied by 12

2

Weighted average unexpired lease term calculated as from March 31, 2015

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Logistics - Vitoria Vitoria - Júndiz

DESCRIPTION On a plot of 107,183 sqm, the constructed area of the property is 72,717 sqm, and is fully leased on a long-term basis to Norbert Dentrenssangle, one

  • f the leading international logistics operator. The property benefjts from

33 sheltered loading docks. The property is located between the Ali Gorbeo and Júndiz industrial parks. Ali Gobeo is notable for the presence of the 650,000 sqm Mercedes Benz factory, and Júndiz is in an excellent location, at the crossroads of national highways A68/A-1/N-1 and N-240, which make it a perfect location for

  • logistics. Over 500 companies are located in Júndiz, including the Spanish

Postal Service, DHL, Schencker, Azkar, ADIF, and Eroski.

+info

LOCATION Vitoria KEY FACTS

Percent Ownership

100%

Title

Freehold

GLA

72,717 sqm

No of tenants 1 Wault2

9.5 years

Annual GRI1

€2.8M

Occupancy

100%

1

Annualized 2015 GRI, calculated as gross passing rents as of March 31st, 2015, multiplied by 12

2

Weighted average unexpired lease term calculated as from March 31, 2015

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Logistics - Madrid Madrid - Meco +info

DESCRIPTION Logistics warehouse located in Madrid, in the Meco industrial area, a consolidated logistics area, known for its excellent connection to the A-2

  • corridor. The asset has a GLA of 35,285 sqm, fully let to Azkar (subsidiary
  • f Dachser, one of the leading logistics operator in Europe).

LOCATION

Madrid

KEY FACTS

Percent Ownership

100%

Title

Freehold

GLA

35,285 sqm

Occupancy

100%

Wault2

4.3 years

Annual GRI1

€1.8M

No of tenants 1

1

Annualized 2015 GRI, calculated as gross passing rents as of March 31st, 2015, multiplied by 12

2

Weighted average unexpired lease term calculated as from March 31, 2015

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Logistics - Madrid Madrid - Coslada +info

DESCRIPTION Logistics warehouse located in Madrid, in the Logistics Transport Centre in Coslada, a consolidated logistics area, known for its excellent connection to the A-2 highway and proximity to Madrid (18 kms.) and airport (7 kms.). The asset has a GLA of 28,490 sqm, fully let to Azkar (subsidiary of Dachser, one of the leading logistics operator in Europe). LOCATION

Madrid

KEY FACTS

Percent Ownership

100%

Title

Freehold

GLA

28,490 sqm

Occupancy

100%

Wault2

5.1 years

Annual GRI1

€1.4M

No of tenants 1

1

Annualized 2015 GRI, calculated as gross passing rents as of March 31st, 2015, multiplied by 12

2

Weighted average unexpired lease term calculated as from March 31, 2015

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Logistics - Getafe Madrid - Getafe

DESCRIPTION This asset, built in 2000 following the highest standards for logistics facilities, has a gross lettable area of 16,242 sqm and is fully leased on a long-term basis to Transportes Souto, one of the leading logistics operator in the Spanish market. The property is located in the industrial area known as CLA Getafe, primest logistics area in South Madrid (15 kilometers from Madrid center), which boasts excellent access to the A-4, M-50, R-4 and A-42 roads.

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LOCATION

Getafe

KEY FACTS

Percent Ownership

100%

Title

Freehold

GLA

16,242 sqm

No of tenants 1 Wault2

9.7 years

Annual GRI1

€1.1M

Occupancy

100%

1

Annualized 2015 GRI, calculated as gross passing rents as of March 31st, 2015, multiplied by 12

2

Weighted average unexpired lease term calculated as from March 31, 2015

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Logistics - Valencia Valencia - Almussafes

DESCRIPTION The property consists of seven modules with a total gross lettable area

  • f 26,612 sqm comprising 24,757 sqm for storage and 1,856 sqm for
  • ffjce. The property is located in the Sollana industrial area of the town of

Almussafes (22km from Valencia) and boasts excellent access to the AP-7, A-7 and V-31 roads. This industrial hub has grown around Ford’s main manufacturing facility in Spain, housing major operators and suppliers serving the automobile industry.

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Valencia

KEY FACTS

Percent Ownership

100%

Title

Freehold

GLA

26,612 sqm

No of tenants 3 Wault2

2.1 years

Annual GRI1

€1.1M

Occupancy

100%

LOCATION

1

Annualized 2015 GRI, calculated as gross passing rents as of March 31st, 2015, multiplied by 12

2

Weighted average unexpired lease term calculated as from March 31, 2015

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Logistics - Zaragoza Zaragoza - Plaza

DESCRIPTION Industrial facilities comprising 3 buildings (2 for logistics use and one for

  • ffjce use) leased on a long-term basis to the renowned retail operator

Imaginarium, a leading brand in the educational toys sector. The asset benefits from approximately 15,000 sqm of unused buildability rights. With a GLA of 20,764 sqm, the property is located in Zaragoza, in the consolidated Logistics Platform of Zaragoza (PLAZA), one of the largest logistics hubs in Spain, with an area of over 13 million sqm. The strategic location and excellent communications has converted PLAZA into an appealing location for renowned international companies such as Inditex, DHL, Azkar and Balay.

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Zaragoza

LOCATION KEY FACTS

Percent Ownership

100%

Title

Freehold

GLA

20,764 sqm

No of tenants 1 Wault2

11.4 years

Annual GRI1

€1.1M

Occupancy

100%

1

Annualized 2015 GRI, calculated as gross passing rents as of March 31st, 2015, multiplied by 12

2

Weighted average unexpired lease term calculated as from March 31, 2015

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36

Appendix II. The real estate market in Spain and Portugal

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37

GDP evolution The Macro-Economic Outlook for Iberia Continues to be Favourable Appendix II.

Spain is currently expected to be one of the fastest growing economies in Europe…

2015E 2016E 2016E 2015E

EU 2016E average EU 2015E average

1.7% 1.3%

SPAIN

2.8% 2.7%

PORTUGAL

1.7% 1.9%

Germany

1.0% 1.6%

Italy

0.5% 1.3%

France1

0.9% 1.3%

Source: EIU, IMF, Bank of Spain, Banca d'Italia, Banco de Portugal, Bundesbank and Factset as of March 2015

1 Based on IMF as Banque de France provides only 2015 GDP growth estimates (1.0%)

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38

CAGR 2014-17E:

+2.7%

700 650 600 550 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

CAGR 2014-17E:

+9.8%

189 159 186 215 223 234 241 268 304 319 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Private consumption in Spain (€bn) Spanish exports (€bn) Unemployment (million people) The Macro-Economic Outlook for Iberia Continues to be Favourable Appendix II.

… supported by recovering private consumption and solid momentum in exports, resulting in sustained employment creation

  • 15%

8 6 5 3 2 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Source: EIU, IMF, Bank of Spain, Banca d'Italia, Banco de Portugal, Bundesbank and Factset as of March 2015

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39

Signifjcant reduction of the risk premium since the peak resulting in record low interest rates

Financing Conditions are Very Supportive for Investments in Real Estate Appendix II.

750 8% 7% 6% 5% 4% 3% 2% 1% 0% 600 450 300 150

Spanish risk premium (bps) Spanish 10y bond (RHS) German 10y bond (RHS)

2008 2009 2010 2011 2012 2013 2014 2015

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40

0.2% 1.6% 2.3% 1.5% 0.3% 0.4% 1.4% 2.3% 3.6%

2007 2008 2009 2010 2011 2012 2013 2014 March 20151

The spread between the Madrid prime offjce yield and the Spanish Government 10 year bond reaching

historically high levels

Financing Conditions are Very Supportive for Investments in Real Estate Appendix II.

Source: CBRE and Factset as of March 2015

1 Calculated based on the difference between the December 2014 prime offjce yield in Madrid of 5.0% and the yield of the Spanish Government 10 year bond as of 31 March 2015 of 1.4%

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41

Source: CBRE

1 Rebased to 100 in Q4 2007 2 Barcelona shopping centre capital value index rebased to 100 in Q1 2008

Capital values vs. Q4 20071 Valuations in the Iberian Commercial Property Sector remain Very Attractive vs. Previous Peak Appendix II.

100% 90% 80% 70% 60% 50% 40% 30% ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14

56.8% 55.3% 54.9%

Offjce - Madrid (CBD) Logistics - Madrid (CBD) Shopping centres - Madrid (Prime) 100% 90% 80% 70% 60% 50% 40% 30% ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14

71.62%

Offjce - Barcelona (CBD) Logistics - Barcelona (CBD) Shopping centres - Barcelona (Prime)

55.3% 54.2%

MADRID BARCELONA

100% 90% 80% 70% 60% 50% 40% 30% ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14

83.0%

Offjce - Lisbon (CBD) Logistics - Lisbon (CBD) Shopping centres - Lisbon (Prime)

76.9% 60.9%

LISBON

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42

Prime Offjce yield relative to high & low of current cycle as of Q4 2014

The Spanish and Portuguese offjce markets have room for recovery

Iberian Offjces Market - Ample Room for Rent Recovery Appendix II.

Source: CBRE

10 8 6 4 2

London WE Paris London City Berlin Frankfurt Dublin Madrid Barcelona Amsterdam Milan Brussels Rome Lisbon Athens

Current Yield Cyclical Low

Yields have compressed in line with other European markets However, rents are still significantly below peak rent levels, with CBD rents only having moved 3% since 2013 and BD rents still fmat since 2011 No major new developments upcoming

The fundamental outlook for offjces continues to be solid Positive outlook compared to other key European cities

Key trends

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43

Change in Prime Offjce rent (%) Iberian Offjces Market - Ample Room for Rent Recovery Appendix II.

90 (60) (30) 30 60

Dublin Madrid Barcelona London City London WE Paris Milan Brussels Berlin Lisbon Rome Amsterdam Frankfurt Trough to Current Peak to Trough

Source: CBRE

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44

Shopping centres yield evolution (%) Change in shopping centres rent (€/sqm/year) Compression in yields and rental stabilisation has boosted capital values Iberian Retail Market – Polarisation of Market Creates Opportunity Appendix II.

Yields have compressed in prime retail more than in other asset classes There is potential for rent recovery but asset selection is key Third generation OOT and prime-city shopping centres are best positioned

Retail opportunities continue to exist across portfolios and selected assets Rent recovery likely to be more polarized amongst shopping centres

Key Trends

8.0 7.0 6.0 5.0 4.0

Madrid Madrid Barcelona Barcelona

Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 1,500 1,000 500 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014

Source: CBRE

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45

Logistics yield evolution (%) Iberian Logistics Market – Signifjcant Room for an Emerging Operator Appendix II. Change in Logistics rent (€/sqm/year)

105 90 75 60 45 30 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014

Madrid Barcelona

9 8 7 6 5 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014

Madrid & Barcelona

Source: CBRE

Yields have only slightly compressed since the peak in 2012 Rents are still in line with 2009 levels

Fragmented market, with quality assets in high demand from tenants

Key Trends

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46

Why Portugal now? The Portuguese Opportunity Appendix II.

Source: CBRE

1 Gross yields for offjces and net yields for shopping centres 2 Refers to Lisbon only 3 Refers to Madrid onlyw

The Troika exited Portugal last year

as its economy started growing

Yield gap exists between

Spain and Portugal Opportunistic investors have started to show interest in Portugal as they

did in Spain a year ago

2010

682

2011

124

2012

105

2013

305

2014

847

Investment in Portuguese real estate (€m)

Spain3 Portugal2 Yields1 (%) Offjce CBD Shopping centres

6.25% 5.0% 7.5% 5.5%

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47 PASEO DE LA CASTELLANA, 42 28046 MADRID +34 91 787 55 30 info@merlinprop.com www.merlinproperties.com