MERLIN Properties SOCIMI, S.A.

Reported gross rental income was EUR 292 million, total income was EUR 307 million, and FFO was EUR 180 million, all for the first half of 2026. Management said revenue grew 11.7% year over year, FFO increased 8% year over year, like-for-like rental growth was 3.3%, and GAV rose 3.7%. Occupancy was 94.7% overall, and LTV was 24.5% with EUR 2.6 billion of liquidity. Full-year guidance was raised: total cash flow guidance moved from EUR 327 million to EUR 340 million, or around EUR 0.55 per share versus EUR 0.53 previously, and management said it is on track to far exceed the 200 MW full-year 2026 IT leasing guidance, potentially ending the year at 340 MW. Phase 1 data center GRI was estimated at EUR 68 million for 2026, and management said EUR 101 million of promote had been accrued to date.

Ismael Clemente framed the first half as a strong operating period with resilient performance in traditional assets and faster-than-expected value creation in data centers. He emphasized that MERLIN is “commercializing much quicker than we can deliver product to market,” reflecting very strong demand in Iberia, and said the company is gaining visibility on future cash flows through advanced pre-leases. His tone was confident and upbeat, but he repeatedly stressed disciplined capital allocation, low leverage, and caution around debt and development costs.

The CFO commentary highlighted portfolio-level growth, with gross rental income of EUR 292 million, total income of EUR 307 million, and FFO of EUR 180 million in the first half. He pointed to EUR 768 million of capital increase proceeds strengthening the balance sheet, LTV at 24.5%, liquidity at EUR 2.6 billion, and investment-grade ratings from S&P and Moody’s. He also discussed the data center promote, saying EUR 101 million had been accrued to date on Phase 1 and explaining that the calculation reflects profitability over a 10-year period, with the eventual share of profits likely to fall in the 10% to 15% range of total portfolio profit over time.

Analysts focused heavily on data centers, asking about Phase 4 power for Navalmoral, tenant mix, competition, construction costs, and whether the capital structure could support further pre-leasing. Management said Navalmoral is moving through environmental approval and could start construction around the end of September, while also noting procurement is being advanced to reduce timing and supply-chain risk. On tenant mix, management said demand is broadening beyond hyperscalers and neoclouds to include direct corporate users and Chinese-linked demand, and on leverage they said they do not want to exceed roughly 32% to 35% LTV and are keeping debt at bay.