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Occupancy Rate: 95.6% overall, with offices at 94.2% and logistics at 96.4%. FFO Growth: Increased by 5.1% year-on-year to EUR 326.7 million. Office Like-for-Like Rental Growth: 3.5% with a release spread of 4.8%. Logistics Release Spread: 5.8% despite a 3% drop in occupancy. Shopping Centers Like-for-Like Growth: 4.7% with an occupancy cost ratio of 11.0%. Data Centers Occupancy: 100% for Phase 1, with significant progress in Phase 2. GAV Increase: 4.7% year-on-year. Loan-to-Value Ratio: 28.9%, with 100% fixed rate and no maturities until November 2026. Total Shareholder Return: 10.2% for the year. GRI: EUR 541.9 million, with a 3.5% like-for-like increase. Dividend Per Share: Proposed at EUR 0.44. Net Initial Yield: 4.2% for offices, 5.0% for logistics, and 5.7% for shopping centers. Data Centers Gross Yield on Cost: Phase 1 at 15.8% and Phase 2 expected at 14.4%.

Warning! GuruFocus has detected 8 Warning Signs with MRPRF. Is MRPRF fairly valued? Test your thesis with our free DCF calculator.

Release Date: February 27, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Merlin Properties SOCIMI SA (MRPRF) reported a strong operating momentum with satisfactory rental growth across all asset classes, including data centers. The company achieved a high occupancy rate of 95.6% and a solid FFO growth of 5.1% year-on-year. The data center division performed exceptionally well, contributing significantly to the company's value uplift and achieving a full derisking of Phase 1. Merlin Properties SOCIMI SA (MRPRF) maintained a low loan-to-value ratio of 28.9% with 100% fixed-rate debt and no maturities until November 2026. The company proposed a dividend per share of EUR0.44, reflecting a strong total shareholder return of 10.2%.

Negative Points

The Barcelona office market remains a weak spot due to oversupply, affecting occupancy rates. Logistics saw a decrease in occupancy by 3 points, attributed to the loss of a tenant in a large warehouse. The company anticipates flat EPS and DPS for 2026 due to increased financial expenses absorbing top-line growth. Merlin Properties SOCIMI SA (MRPRF) faces challenges in closing deals with hyperscalers due to complex negotiations and potential unfavorable terms. The company's expansion into Phase 3 of data centers involves significant risk and complexity, requiring careful management of construction and leasing activities.

Q & A Highlights

Q: Can you comment on the occupier type you're having discussions with across Phase 2 of your data center pipeline and whether we should anticipate a diversification of your tenant base? A: Ismael Clemente Orrego, CEO: The leasing of Bilbao 02 has been closed with an existing client, while the one in Madrid was with a new client. We are talking to a variety of clients, including hyperscalers and Tier 1 neo clouds. We expect to diversify our tenant base as we continue to expand our operations.

Story Continues

Q: What are your expectations for occupancy rates in offices and logistics for 2026? A: Ismael Clemente Orrego, CEO: In offices, we aim to maintain occupancy between 93% and 94%, despite losing a significant tenant in Barcelona. In logistics, we hope to improve occupancy slightly from 96.4%, depending on leasing a large shed in the Henares corridor.

Q: Your gross yield costs for data centers went up. Can you explain the movements on those numbers and why you still report a 70% margin? A: Ines Arellano, Head of Investor Relations: The 70% margin is the stabilization margin. We achieved better margins during the ramp-up than expected, but the 70% remains our target for stabilization.

Q: Why is now the right time to present Phase 3 of your data center projects? A: Ismael Clemente Orrego, CEO: We see Phase 2 as significantly de-risked and powered land is scarce in Europe. We want to capitalize on our advantage of having powered land and continue developing capacity in a favorable market.

Q: Can you explain the better-than-expected FFO driven by data centers? A: Ismael Clemente Orrego, CEO: We achieved better margins due to efficient operations and additional services provided to clients. However, we are not revising the 70% stabilized margin as we need more data.

Q: What is your view on the Barcelona office market, and do you expect higher release spreads going forward? A: Ismael Clemente Orrego, CEO: The Barcelona office market is currently digesting an oversupply. We expect it to stabilize within 18 to 24 months, with rents holding steady for now.

Q: What assumptions are included in your 2026 guidance regarding debt funding and logistics leasing? A: Ismael Clemente Orrego, CEO: We expect top-line income to increase by EUR40 million, offset by higher financial expenses. We assume the same share count and anticipate leasing up logistics vacancies, though it won't significantly impact overall results.

Q: How much of Phase 2 is currently factored into the appraisal values of your data centers? A: Francisco Rivas Gonzalez, Manager: Appraisers include assets under construction in their valuations. Once construction starts, the assets are appraised, and the value is gradually absorbed until delivery.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

This article first appeared on GuruFocus.

Gross Rents Like-for-Like Growth: +3.4% FFO Per Share Growth: +6.4% year on year NTA Per Share Growth: +5.7% year on year Total Shareholder Return (TSR): +8.4% for the period Occupancy Rate: 95.5%, stable overall Office Like-for-Like Growth: +3.8% year on year Logistics Like-for-Like Growth: +1.7% year on year Shopping Centers Like-for-Like Growth: +3.5% year on year Office Release Spread: 0.2% (5.0% excluding specific deal) Logistics Release Spread: 5.7% Shopping Centers Lease Spread: 4.2% Transaction Volume: Over 700,000 square meters in the first nine months

Warning! GuruFocus has detected 7 Warning Signs with MRPRF. Is MRPRF fairly valued? Test your thesis with our free DCF calculator.

Release Date: November 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Merlin Properties SOCIMI SA (MRPRF) reported a 3.4% increase in gross rents like-for-like, indicating strong performance in traditional asset classes. The company's Funds From Operations (FFO) increased by 6.4% year-on-year, despite higher financial expenses. Occupancy rates remain high and stable at 95.5%, showcasing the company's ability to maintain tenant retention. The MEGA Plan for Data Centers is progressing successfully, with significant pre-commercialization efforts underway. Merlin Properties SOCIMI SA (MRPRF) achieved a 5.7% increase in Net Tangible Assets (NTA) per share year-on-year, contributing to a theoretical Total Shareholder Return (TSR) of 8.4% for the period.

Negative Points

The European Union's Gigafactory program has experienced delays, impacting the competitive advantage of Merlin Properties SOCIMI SA (MRPRF) in Phase III execution. Higher financial costs due to early bond issuance have eroded part of the company's margins. Logistics occupancy has decreased by 200 basis points, affecting the like-for-like growth in this segment. The requirement for double environmental assessments in Madrid projects has caused potential delays of six months to a year. The European Union program restricts commercialization to European names, narrowing the scope of potential clients for the company's data centers.

Q & A Highlights

Q: Can you clarify the comments on Phase III being delayed for four months and the strategy going forward? Are you going to try and pre-lease those 180 megawatts in the upsizing pipeline? A: The delay is due to the European Union Gigafactory program, which has been complicated and stressful. We are considering lifting the restriction on European Union commercialization to achieve the same results with less stress. We are not delayed in CapEx execution and are on track. However, we are facing delays in two Madrid projects due to double environmental assessments, which could push the cash flows of Phase II from 2029 to 2030. We are preparing for Phase III, which will overlap with the tail end of Phase II, and will communicate the scope in the February conference call.

Story Continues

Q: Are there any more environmental reviews for the other data centers under construction in Phase II? A: In Phase II, we are clear on all environmental studies, including Arasur building number 1. We are clear in Portugal and the Basque Country. The only pending assessments are in Getafe and Tres Cantos, where we need to conduct a second environmental assessment due to legislative requirements. We are advancing administrative red tape for Phase III to anticipate potential delays.

Q: If successful in the EU Gigafactory submission, how would the partnership work, and what would the EU contribute? A: We have chosen the offtaking modality, where 35% of the offtaking is guaranteed by the EU and local governments. For the 180 megawatts, 60 megawatts will be offtaken by the EU and local governments, and the rest will be commercialized with our clients. We are working on back-to-back agreements with clients irrespective of the EU outcome, aiming for 48 megawatts committed by April.

Q: What are your thoughts on the US investing heavily in data centers and AI, and should Europe follow suit? A: The US and Europe are different. In Spain, there is limited data center construction, but interest from significant accounts is growing. We are securing power for future projects to meet demand. Spain and Portugal have excess generation capacity, which is advantageous. We are preparing for Phase III and will present a funding plan in February, potentially involving external partners for large projects.

Q: Why should the European Union select an operator in Spain and Portugal for the program? A: The EU appreciates combined projects with more capacity and connectivity. Spain and Portugal have a unique grid system, which is advantageous. Our proposal offers a powerful option with more capacity and companies that could use our facilities. The EU aims to incentivize capacity and offer services to various entities within Europe.

Q: Do you have a cutoff date for moving on from the EU project and consortium? A: We haven't made a final decision, but we might wait until April. If delays continue or more administrative hurdles arise, we may pull out. We are committed to the country and believe the project could push the AI ecosystem in Spain and Portugal. However, delays reduce the program's attractiveness.

Q: Will you discuss the financing plan for Phase III in February? A: Yes, we will present the definition and scope of Phase III along with the funding plan. Phase III might include significant projects like Navalmoral de la Mata, which may require a separate analysis for funding. We may consider taking a partner for this project to bring additional value.

Q: When do you expect more competitive products in the data center market, and how could that impact Phase III? A: We don't expect significant competition before 2030. Currently, there is limited construction activity in Spain and Europe. Our Phase III will likely be commercialized on a clear market basis, with ready-for-service dates starting in 2028. The competitive landscape in Europe is challenging due to power availability and regulatory complexities.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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