Good afternoon, everyone. Thank you for joining Merlin's 3M 2026 trading update.

As we always do on quarterly results, our CEO, Ismael Clemente, will briefly walk you through the main highlights of the period, and we will then open the line for a Q&A. Without further delay, I pass the word on to Ismael.

Thank you, Teresa. Merlin is off to a very good start of the year, with total revenues up 11.2%, owing to basically 3.5% increase in gross rents like-for-like, and the additional revenue brought by data centers, as compared to the same period last year.

The FFO, however, is only up 3.9%, still better than what we predicted. It was slightly lower than last year, but is only 3.9%, and as warned already at the full-year results, it's a combination of more financial expense, 10% increase, and much less financial income because in the same period last year, we were still enjoying significant amount of cash in our in our bank.

So 40% less income, financial income. That puts the company at a 8.8% total shareholder return per share, year-on-year, compared comparing the same periods.

We have seen a very strong activity in in all of our divisions, but particularly in traditional asset classes. Of course, Spain continues enjoying good macro, but I would not take out importance to the asset management effort carried out by by my colleagues.

The occupancy remains very high at 95% and and quite stable, despite the fact that in the first quarter, about 60% of renewals can be, and this is Spanish idiosyncrasies. Everything is done either in January or February, most of our renewals come due in in in the in the first two months of the of the year.

The erosion in occupancy of close to 60 bps, I believe is quite acceptable. We will discuss the guidance for next year probably in the in the next quarter, but what we said at the end of the financial year 2025 remains true.

In in offices, we said between 93% and 94%, and our models are giving us now midpoint in that range. In shopping centers, full stability, between 90 around 96.5%, something like that.

Remember, in in shopping centers, we are starting to yield manage a little bit the portfolio. You have seen it in the in the release spread.

We are starting to fight, in a good way, the occupancy cost ratio, which now stands at the lowest I have ever seen in my professional life at 10.8%. In logistics, and some of you I know are worried about logistics because you are kind of assuming that there is some sort of underperformance in the portfolio.

The truth is that simply it's the GXO shed, which is a big one. It's 48,000 square meters, and it will take time to release it up.

Because it's a relatively big pill to swallow for for the for the taker. We are in negotiations with more than one party, we are negotiating with multiple parties, and that will basically move the needle of occupancy as of year-end.

If we cannot sign that shed before year-end, occupancy will be more in the region of 96%. If we are able to sign it, it will be 99%.

Anyway, I already warned you that 99% is abnormal. Please, do not bang on our head every time we go down from 99% because 99%, of course, is is not reasonable.

More importantly, we continue executing the megaplam in very satisfactory manner. I think it's all the assets under construction are on track to meet the delivery dates, and the ones in which we were requesting licenses are now, little by little, achieving very interesting milestones in terms of construction licenses, etc.

I will go in further detail in a minute. Non-core sales, meaningless for the quarter, €6.8 million at premium to to GAV.

More importantly, we have been signing €123 million for execution in '26 and '27, giving us optionality for receiving the cash flow. As while we continue building data centers, it is critical for the company to keep cash flow, and as such, every time we sell an asset, we try to do it in in a in a type of contract in which we keep a lot of optionality as to what is the moment of execution and what is the moment of loss of cash flow and receipt of the money.

At present, we don't need money. We we are overfunded.

We have too much cash at banks, what we are trying to do is drag a little bit our feet in terms of of sales. That 122.9, it's also at at a premium to GAV.

I know some of you are are not worried or are making that question. It's at a premium to to GAV.

The NTA per share, it's €15.32 with no valuation, no no appraisal during the quarter. Another thing that has raised the eyebrows is we have said that we expect substantial revaluation of DCs in in 1H.

This is no nuclear science. It's simply that up to now, the scope of valuation of our appraisers has been a total potential of 240 megawatts of data centers, and just with Lisbon, we move into 340.

It's a very significant jump ahead, much more scope, and and I'm sure this is going to have an effect in the valuation of the portfolio, together with the fact that there's been a near elimination of any leasing risk in Phase 1, and increasingly in Phase 2. As a consequence, I'm sure that the valuers will reflect that in the discount rates and also bring in the cash flows closer to present.

This is why we expect some jump in in values in in in the first half. As you all know, in March we executed a capital increase, an ABO to fund Phase 3.

It was a very good transaction, reflecting particularly your support to to the company. It was heavily oversubscribed and and executed at at strike.

Thanks for that. At the end, 100% of the paper was placed with existing shareholders.

Of course, begging pardon to the super minority shareholders that, of course, cannot participate in in ABOs because of their non-institutional nature. Even from a legal standpoint, you cannot address them.

The final distribution after the general approval of the General Shareholders Meeting of €0.22 will be paid on on May 25. Some of you have asked about why the FFO goes down by 5.6%.

As we use the absolute number of shares of the company at the moment of reporting, which now includes the capital increase. We don't we don't use the average.

If we were to use the average, the FFO would have grown by 3.1%, and the adjusted FFO by 3.5%. We prefer to report what we see, and what we see is that now we have 620 million shares, and as such, if we have to divide the FFO by those by this number of shares, it's -5.6%, which anyway, it's already below the 10% theoretical dilution created by the capital increase.

With a some probability, maybe during the year, we will continue taking a bit eroding that dilution created by by the capital increase. In terms of behavior of the different asset classes, offices, as ended up the period at 93.6% occupancy, down close more or less 60 compared to the 94.2 at which we closed the year.

The like-for-like was 3.1% with a very interesting release spread of 2.8%. Offices continue to show some strength, despite the fact that we have a problem in in Barcelona, a problem that will aggravate in the second quarter because in the second quarter, as we have an unscheduled exit of the Meta fake news control center in Torre Glòries, so that that will further diminish the occupancy in Barcelona.

Thanks God Barcelona is a has a relatively minimal weight in our portfolio, so, no no big thing. Barcelona is, of course, a complicated city at present because of a the relative oversupply that we are experiencing in the area of 22@.

It will take some time to recover. We have commented on a number of occasions Barcelona is a strong market, sooner or later it will recover, but it's we need a little bit of patience there.

In fact, even in rents, now Madrid is about to overtake Barcelona in in average rents in the portfolio, despite being more concentrated in prime CBD, the one in Barcelona. Very interesting the performance we have observed in in in Madrid in recent times.

Logistics, down about 60 basis points to 95.8% from the 96.4% we were at the at the end of the year. The like-for-like is weak, 0.6%, but this is mainly due to the net variation in occupancy because, much to our surprise, the release spread has been super strong at 6.2%.

We still need to see what happens in the second, third, and fourth quarters to check whether this is a reflection of something or is simply it's it has happened a little bit randomly. We need to we need to check the consistency of this figure in the coming quarters.

Shopping centers is a rocket. 6.1% rent like for like-for-like and a release spread of 7.4%.

We told you that we would start managing yield, and we are doing exactly that. Despite this, the the sales have gone up so wildly that at the end, the the occupancy cost ratio continues going down.

Anyway, we will continue pushing a little bit in rents and and trying to normalize more the performance of of the of the portfolio. If we go very quickly through the different asset classes, and I will only stop in in data centers because of its importance.

In in offices, what is what strikes the eye is basically the the very good performance of Madrid, now reaching 94.6% with more than 1% change in in the period, and Barcelona, which has gone farther down by about 3 percentage points. Lisbon has gone down by 4 percentage points, but don't take that as an a reflection of anything.

It's simply that we have suffered the conjunction of the exit of BNP Paribas in in the Art's tower and some of the consequences, delayed consequence of the exit of Galp in in Torre A, that, at the pace we are reletting space there, this will be somehow normalized towards year-end. I think the the local team there is is doing an an excellent work in rebalancing the the the portfolio.

In terms of well, as a curiosity, the the the once demeaned A-1 corridor in Madrid is now a darling. Has moved from Cinderella into Princess.

Now it's is is occupied above the average occupancy of the portfolio, owing to the fact that part of the infrastructure problems that were endemic to that area, particularly the traffic jams because all the residential around had been built, but no changes had been made to the infrastructure. Finally, the municipality of Madrid has carried out some changes in the in the in the North traffic hub, and this has reduced very significantly the traffic jams in in the area.

The proximity of Operación Chamartín is also enticing more and more real estate managers in companies to to find its slot there because at the end, it's going to be very close to where the music will play in Madrid for the coming 25 or 30 30 years. In logistics, well, as commented, very good release spread and pedestrian growth in in like-for-like terms owing to GXO.

It's commented, it's a it's a big shed. We are now negotiating with three, four counterparties, but it will take time.

Bear with us because it's a it's a big shed, and and the and the market is not, although, is not in its best moment. We we need to make sure that we we sign that back and and and go back to a super high occupancy if at all possible.

Good news, however, is that we continue leasing well our work-in-progress. We are 178,320 pre-let or ahead of terms.

It is important to make the breakdown. It's 174 pre-let and 4 ahead of terms, it's basically all pre-let, which is interesting.

Even in the non-committed, we are working on reducing the total number, 182 by about 60 because we are in conversations with a tenant, and, reduce the non-committed to only 120, always with the idea that has been conveyed on many occasions to you of, finishing our landbank in logistics and, waiting for the next cycle, comfortably full and cash flowing. This is This is what we want to do.

At the same time, in Zal Port, we were able to to get two additional plots there, and one is has been pre-let to Lidl, and the other one, which is in the airport of of Barcelona, has been pre-let to Logista. That will add capacity in the super prime location of Zal Port in in in Barcelona.

In shopping centers, I know Spain is, between the increase in population, the marginal propensity to spend, and the macro, it's it's really performing as like a rocket. The the sales, the increase in sales of 10.3%, which, will strike some of you as too high, it's part of it is is owing to the fact that Marineda, the extension of Marineda has been in operation in the period, and that has added about 4 points to to the figure.

If you want to do it like similar to like-for-like, it will be in the region of 6.2%, much more in line with, the the market statistics and what some of our peers are reporting in Spain. Footfall, however, is only +1.5%, and this is owing to very small things, difficult to explain, like for for example, in Barcelona, we have works in in Plaça Espanya, which are complicating the access to the to the shopping center.

In Larios, the Spanish high-speed high-speed train got suspended for a long period, and therefore access to Málaga was completely complicated by by the public authorities. We have a number of other situations in in in the portfolio, but we we we continue to see a very interesting footfall flow in in our in our shopping centers.

Data centers: For Phase 1, Madrid-Getafe 01, Barcelona-Zona Franca, and Bilbao-Arasur 03, the first building, are now fully equipped and fully let, and they will reach €97 million gross rental income in in the year of stabilization, which is '27, as anticipated to you a long time ago. Going into the details, Barcelona-Zona Franca has been repowered or is is being repowered.

All the machinery has been received, and we are doing now fit-out, but there's been a change in in in layout of the client, and, it's the fit-out is going like 15 days delayed, that's not relevant for cash flow, and we will start receiving cash flow in the third quarter of 2026, this year. Regarding Madrid-Getafe 01, well, it's now fully let to one neocloud and and two hyperscalers, who which basically host in the data center POPs, cloud points of presence, and are occupying an interesting part of the of the data center.

There we are finalizing the the power connection works. We are at present, we are digging trenches, in very plain language terms, and we expect to be ready in October '26, by fourth quarter '26, the main client, the AI client of the center, will start paying full rent.

A repowering opportunity has arisen that will or should allow us to go back to the 70 megawatts of Phase 1 that we told you in April 2022 in our Capital Markets Day. If we have we have the opportunity to acquire 10 megawatts of electricity that will give us 6 megawatts extra in in IT terms.

I know it's a small number, but it's, it's symbolically important for us. If we if we can clinch it, the repowering should be ready by fourth quarter '27, and that means that in terms of gross rental income, this year, it's set.

We will receive around €66 million in in rents. Next year should be 97, but then in 2028, there will be a significant jump if the repowering happens.

We will go to circa 110, including the the fixed step-ups of the existing contracts. Very very interesting for for the company.

Then for Phase 2, construction is progressing as commented, as planned, and the flow of pre-lets, it's promising. In in Arasur 02, it's fully let.

The first batch, 20 megawatts, should be, producing money by beginning of '27; the second batch, 28, by mid-20 '27. Very cool machinery, really, state of the art, liquid-cooled, and what is more important, fully back-to-backed by the client.

They they have now final clients for all that power. They are they are already sold in in that.

For Arasur 01, construction is underway. Pre-leasing is in advanced negotiations.

What this means: basically, that we have done something special in this occasion. We have signed a reservation agreement, which has, as an exhibit, all the technical documentation and the full form legal documentation, the lease contract.

However, the lease contract contains bracketed terms for the delivery dates. Three things can happen.

If nothing happens, at a certain point next year, which I will keep for me, okay, the contract will become fully binding for both parties, and it will be let. If we have to change the delivery dates, and I will explain why, and the counterparty accepts, again, it will become fully binding on both for both parties.

If we can find a language which is sufficiently flexible for delivery dates, which will need the collaboration of the final client of our, power taker and NVIDIA for the delivery of the of the chips, if we can find something which is amenable for the four parties, then eventually we will move into full let's say full form contract signing. It's pretty much done, okay?

That is that is the situation there, and, we are we are working. Why are we worried?

We are worried for a very simple reason: because we have our own working morale. We have our own, sense of fulfillment of contractual obligations, but when you are dealing with power, public administration or other counterparties, when you depend on third parties, of course you are exposed.

What we don't want to do is screw up. We don't want to screw up, not only because we are going to be imposed a significant penalty—penalty, at the end, you pay and that's it.

The problem is that we are a relatively small company, and we are just starting in the world of data centers. We we do not have the good will of the big American incumbents, and, screwing up on the delivery of of one of our facilities is not going to be good for us.

Particularly if it is owing to a third-party intervention, it will be a pity. What we are doing is trying to make sure that we, are pretty firm on the delivery dates.

Remember that in this case, the electric line comes through a photovoltaic plant that needs to be built, is being built or will start soon to be built by Iberdrola, by the by the utility provider, really next door to the to the data center, but the plant needs to be built, and the line will come through the plant to the data center. Two things need to be executed: the generation assets, the solar panels, and the line.

This requires lots of authorizations from the Basque Country authorities, from the central government authorities, etc., plus the execution of the works itself. This is why we have been a little bit very prudent in the way we have approached this potential pre-let.

Regarding Lisbon 01 and 02, well, basically, construction is advancing significantly. If any of you fly often to Lisbon, you will see that the two buildings are now with columns erected.

They will start closing walls in the second half of the year and and and roofing. Works are advancing pretty well after finishing all the preparation of the ground, which, as is a complicated ground in in Lisbon.

Very happy with the way it is it is going. For the IT capacity, the the primary plan continues to be the adherence to the Portuguese gigafactory.

However, this is now being delayed again. It the RFP by the European Union might be sent to the different parties at the end of June or maybe July, and they expect to take a decision by year-end.

Taking into account that we started in all this process in February 2025 with the intention to have everything decided by April, maybe May, maybe June, it's a year and a half delay, and which is sometimes not compatible with private activities. We we cannot do things in that way.

We are advancing in some, alternative conversations, pretty similar to what we did with Arasur, but you will need to bear with us for a long while because those happens happen to be hyperscalers, and that means basically very very long conversations, very slow processes. It will take a lot of time to really get to a happy end.

Statistics are in our favor. We are talking to multiple counterparties, and sooner or later, one of them will end up concluding negotiations.

We're happy with the way it goes. Plus, if at all possible, if we can enter a full lease of the whole campus, it's is paradise for us.

If if we can really lease the whole campus and accelerate the construction of 03, 04, and 05, that will be perfect. This is why we are taking relatively long in in Lisbon, but the demand is very satisfactory.

In Madrid-Getafe 02, the demolition works are underway, should be finished by year-end, very happy with the way they are going, and the construction license has been submitted, the the request, to the municipality, and we expect to have it or to get it immediately after demolition works are finished. Maybe, with a little bit of luck, early next year.

We want to we want to rush in this case again because this data center enjoys a couple of bookings and highly credible, we believe it will it will go very well. The the current finalization target, which is first 1H 2029, it's about one half in advance of the one we told you about, it's like two quarters ago, when we feared that this would go to end of '29 with full cash flow in '30.

With a little bit of luck, it should go to more like first half '29, and for cash flow, well, again, for '30, full cash flow for '30, but, part partial cash flow already in in in '29. Regarding Madrid-Tres Cantos, this is a small data center, but, planning has been completed.

We got urbanization permit, and we are now moving round, and that's it, because, we expect to to have this ready in the first half of 2029, and we haven't started commercialization conversations because, first, it's very small; second, it's in Madrid, I think it will it will lease relatively well. Then for Phase 3, we're just starting in in Bilbao 4 and 5.

We are waiting for the execution of the power infrastructure by our electricity provider, which, as is Solaria. We have requested the construction license to the municipality, which, in turn, will put in motion the the different favorable reports that need to be received from the Basque government.

We are already readying the project in case we need to accelerate it. In in in our presentation of Phase 3, we said first half '30, first half '31.

This is simply an estimate. If if we need to accelerate, of course, eventually, we want to be ready in in case, for some reason, the client or one client wants to to get this slightly earlier.

We want to be ready. Regarding Lisbon 3, 4, 5, the construction license has been granted by the municipality, and we have started, doing the groundworks very quickly.

We are piloting already, and, we'll we will we will go fast here. Again, we have delivery dates of 1H '29, 1H '30, 1H '31.

If we get a client, that can be significantly accelerated, but we prefer to keep the existing dates, the guidance provided to you in in our Investor Day in in Arasur because we still we don't know what the future might hold, and if if we end up selling or leasing 01 and 02 to different clients on a retail basis or, wholesale colocation, then eventually, we will not rush in starting 3, 4, and 5. If if we do just one single lease, campus lease, then yes.

Then, Zaragoza-Wind. We have submitted already the DIGA, the declaration of general interest for the community of Aragón, and we are now moving into the PIGA, the project of general interest of Comunidad de Aragón.

It might sound like Chinese to you, but the interesting thing about the PIGA is that it moves the land from rural status into full construction license in as short as between 9 and 12 months in theory, unless, something happens or you find skeletons from the Stone Age in there. The idea is to to continue progressing hand-in-hand with the with the local Aragón authorities, which are highly collaborative, and, have the PIGA submitted before summer for readiness of the project in 4Q '29, and the second building, 2H '31.

Again, it depends on, whether we can find a client, and we have a lead for this one. Which is the because Bilbao and Lisbon will probably have the same client, but in we have a we have a lead, and we are we are working on the technical design specific to that to that lead.

Outside the Phase 1, 2, and 3, we got the declaration of project of regional interest for our Navalmoral project in Extremadura for Building 1 only, and we have obtained a little bit of power in there, around 30 megawatts utility, which are good for about 20 megawatts IT. Remember, for those of you who attended the Capital Markets Day in Arasur, that was called Phase 4, okay?

Interestingly enough, we got some electricity, not a lot, but given that civil construction is not the lion's share of the budget of a data center, we might perfectly start the construction of Building 1 being ready to equip 20 megawatts IT on it once finished because it's the only way to have an earlier ready-for-service date in case we get clients. This Extremadura project is raising a lot of interest in the market because of the sheer size it has.

Of course, during the civil construction period, we might get the real electricity, the one that we have requested from the local authorities, from the central, sorry, central government authorities. We requested 2.0 gigawatts, and, good for around 1.4 IT.

Whatever they give to us is going to be good. We we, if we can electrify the first building, and if we can electrify the second, because they are they are twins from a technical standpoint, we might start also the second if we if we get the the electricity from the from the central government.

That's basically it. LTV, bond maturities, and this is all relatively plain vanilla stuff.

Let's move into into Q&A, and I'm sure it's going to be much more interesting. I'm sure you will have interesting questions.

Great. Thank you very much, and good afternoon.

Thanks for taking my question. Just firstly, just on the broader FFO growth of the 4% which

you [unclear] Marius, you are breaking off. Your voice is metallic.

Can you check your line or eventually, if you want, if you send us in writing the questions, I will read in loud voice your question and reply to it. Do you agree with that method?

That's perfect. Apologies, my line's gone really funny.

Thank you.

Okay.

Questions.

FFO growth, circa 4% in the first quarter. Appreciate that it is early days, but is there upside potential to the flat guidance?

Yes, there is upside potential. Don't do this to me every year.

The $0.58 pre-capital increase are $0.53 post-capital increase. Let's stay with the 53 for the moment.

We will review the guidance in the second quarter, and in case we see that we are fine, yes, we will change it. For the moment, let's keep the 53 because it is not easy.

This year from a interest rates perspective is being a roller coaster, but it's a roller coaster that only goes up. The 10-year swap rate is going up significantly, and let's see.

Financial expenses might give us a headache. The good thing, however, is that however fast financial expenses grow in the coming years, the top line is going to run much, much faster.

That puts us in a very good situation. Compared to what I see around me, I think is a very good situation.

It's been fantastic. It's been a big luck to find this vector of growth of the data centers because it will simply send our top line to the roof, and this is going to go much faster than any potential increase in the financial costs.

Then, update on Portugal: How dual-track discussions are ongoing with tenants versus Gigafactory project? I have already referred to that.

We are holding a dual-track, true, and we might perfectly end up going through a private solution. The third building in Bilbao, under advanced negotiation rather than booking, able to provide details?

Yes, well, I have already given you the details. I will not be specific on who is the client, although it's relatively easy to guess.

Then, Navalmoral: What this means for Phase 3? Navalmoral is Phase 4, but as we commented in Arasur in the Capital Markets Day, Phase 3, it's a little bit flexible at this time round, could be increased by some things coming from Phase 4, some things coming from Tier 1 pipeline.

Or eventually, if we see that, for example, in Tres Cantos, it's going to be impossible to meet the deadlines given to market for Phase 3, we will move it to Phase 4. We need to get accustomed a little bit to the fact that having so many balls in the air, so many things in execution, some things will happen.

You need to be prepared for that. Let's be adult in that respect.

If something happens, I will duly inform all of you that we sometimes might need to do some adjustments.

Hello, Ismael. Can you hear me?

Yes, Celine. How are you?

Cool. Very good, very good.

Can I ask you two questions please on data centers? The first one is, can you give us an update on where you stand with the EU on your Portuguese scheme?

Then secondly, what does that mean that Navalmoral has been declared project of regional interest? What does that mean effectively for you in your day-to-day?

Thank you.

Okay. Regarding the EU, as commented, Celine, the problem is permanent delays.

As the program was launched by the European Union. They called it gigafactories because they were trying to replicate the Stargate program in the US, trying to find 1-gigawatt projects across Europe.

Then somebody raised the hand and said, "It's impossible." Then they reduced to 200 megawatts, then to 100 megawatts.

Finally, it's a 100-megawatt program. Locations moved from four to five in order to please more countries within the European Union.

Now they have moved from five to seven, little by little, it's starting to look like the lottery of the parish in which I go to mass on Sundays. The boys do a run, and then the one that ends up last still gets a medal because it's super sympathetic and has a very good smile.

Sooner or later, this program is going to be launched. Apparently, is going to be launched around June, July, for decision-making before year-end.

We can no longer be super faithful on that. In Spain, we are completely out of this.

We were told that we were not needed, we found our way in the private market. In Portugal, we have remained loyal to the verbal agreements reached with the Portuguese government.

We remain there to provide them with digital infrastructure in case they need it. If they tell us they don't need it or the situation continues being delayed, we might move perfectly into a private execution because at the end, we have to manage fiduciary your money.

We cannot play with that. Then, regarding Extremadura, the declaration of regional interest basically means, technically, that all periods for licenses are reduced to half, and therefore everything gets some sort of a fast track, and it moves significantly quicker.

In practical terms, more importantly, is that the Junta de Extremadura is now clearly trying to help the project, and they have allowed us to get some power, which is testimonial, is not significant, on 45 kV, is not super high quality power, but it's okay. Will give us the possibility to illuminate one block out of the five, if we do a B100.

If we do a W96, the blocks are 24, partially one block, four blocks, or five blocks. Depending on the type of building we finally build there.

We will have some electricity, and as such, we can start serving clients there, which is important because clients normally deploy system engineers in the site, etc. Once they are working with you in a building which is occupied only by 1/5, then the second fifth, third fifth, fourth fifth, and five fifth is normally much easier to place with the same client.

Extremadura is raising a lot of interest among the clientele.

Thank you very much. Thank you.

Pleasure.

Hi, Ismael. Thanks for all these details and explanations.

I will have two questions if I may. Maybe the first one, you mentioned the valuation of data centers saying that maybe we can expect some substantial revaluation.

I understand this is maybe because of changing in the scope with Lisbon. Maybe can you give us maybe more thoughts on how we can anticipate that impact on the valuation for your data centers in H1?

Let me wait for one quarter. As we were carrying that land at cost.

Cost in Lisbon was as close as you can get to zero. Yes, it will be a significant impact.

It is not for me now to evaluate the impact. It will be the appraisers.

The appraisers will do their job. They will tell us how much they believe.

Yes, it's going to be an improvement compared to current situation because current situation is zero. Very very interestingly, and I believe also there will be some revaluations in existing assets because of certainty.

Clearly the certainty now is full, and as such, I'm sure the discount rates, etc. might be modified in our favor.

Regarding other asset classes, remains to be seen because the performance is very good, which should move valuations up. However, interest rates are going up, I don't know which of the two will prevail.

Only God knows. We will wait.

As commented with you on some occasions, for the next seven years, whatever happens to the traditional portfolio is going to pay in comparison to the value creation that you are about to witness in data centers. Don't be too worried about the traditional asset classes.

Okay. Maybe thank you for that.

Maybe my second question would be on Phase 2 and Phase 3, about the speed on how you spend the CapEx today. You have provided us a very detailed review on all these assets, but in terms of CapEx spending, how is it?

Are you spending this faster or in line with your initial plans?

At present, faster. Last year, '25, I think we executed 900-and-change million compared to 800 we had in our budget.

We were slightly faster. In '26, very importantly, talking about committed, which again, we have explained in some occasions.

We consider committed CapEx already spent because we don't want to run into the risk of insufficient funding. We don't want to make an equipment request from Vertiv and then discover that we don't have the money at the time it arrives to pay for it.

We kind of block the money of every equipment request we make, and hence why we have a relatively significant amount of cash. What we expect for '26 is a little bit of the same.

We expect '26 to be also fast in terms of CapEx deployment. The cash at banks we have at present, which is €1.75 billion, if you take out the bond repayment, €850, change, more or less, and the speed of deployment of CapEx in data centers, we are going to finish the year if you talk about committed, more or less at zero.

If you talk about real money at the banks, we will have money at the banks because part of it will be committed, but not yet spent, okay? Yes, we are spending pretty fast.

In that respect, the arrival of David Martínez, it's helping us a lot because he's making a significant effort of industrialization of the construction processes, which is important in many aspects. One of them is, of course, speed of execution, but the other one is combat to potential cost inflation episodes we might see in the future.

At present, Europe is relatively tranquil for the moment because there is a lot of bullshit, a lot of noise, but very few people is really building things. Sooner or later, that situation will change, and that might strain a little bit the commitment cues with the main suppliers.

You need to be mindful of that and try to make sure you slot your things in the right moment, and you get your equipment, and you might need to equip part of your things in advance, for which we are prepared. We have lots of sheds everywhere in Spain, we have a lot of storage capacity for equipment that we might receive.

Okay. Thank you very much.

It's a pleasure.

Good afternoon, all. Thank you for the presentation and taking my questions.

Maybe first, I was hoping you could give any color on your stance towards the Balcony portfolio. You mentioned you are not mentioned anymore in the last four bidders, but you were quite vocal in the past on your interest.

Happy to hear if you can give any color on it.

In principle, we couldn't agree in pricing, we are technically out, and that's it. They are running an investment banking process with long list, short list, etc., and we are not participating.

That's very clear. Then maybe second question, just curious given what's currently happening in the Middle East, have you identified any new potential risk or already encountered delays or cost inflation for the data center pipeline?

Not for the moment. As I was commenting, the fact that most, virtually all our supplies come from OECD countries, and the only thing that comes really from a far supplier is Japan, but it's made in Spain, in Zaragoza, the transformers.

It's going well so far. Collateral effects we are seeing from the Gulf crisis is more interest in Europe by hyperscalers because a number of data centers in the area have been hit.

Data centers are, of course, center in any crisis because they host data, which are vital for today's society. One, two, three data centers have been hit, nothing serious has happened, but that has sparked even more interest now in European locations.

That's basically it. I think we are okay for the moment.

Of course, we are not okay. I hope the situation there is resolved sooner rather than later, and we can go back to a normal life.

Thank you. One last question: You now received the 30 megawatts of power for Extremadura.

Is that somewhere linked or does that give you any view on when you can obtain the remainder that you requested, or is it something completely separate?

It's completely separate. It's completely separate, Véronique.

It's a pity, but it's completely separate. This is electricity obtained through the distribution network, through Iberdrola, who is the electricity supplier there.

The one we have requested in Almaraz 400 kV is electricity requested to the transport system, to the national grid authority, to Red Eléctrica. Two different sources of electricity, and one thing has nothing to do with the other.

We hope the power contest is called sooner rather than later. We provoked it.

We are ranking first. There is enough electricity in the substation, we are hopeful that we are going to get a very significant chunk of electricity there.

The truth is that we deposited the bank guarantees on February 25, and we are still waiting. Hopefully during the year, we should know more or the power contest should be called or...

Because it would be paradoxical that we end up receiving a lot of electricity earlier in Portugal than we are receiving in Spain. As a Spaniard, it kills me, but it's the situation.

That's clear. Thank you.

Hello. Thank you.

I'd like to ask a question specifically on construction cost inflation. I know that Ismael, you said that so far there's nothing especially that you're seeing or that you think you should mention, but just thinking maybe a bit more long term, I was wondering if we were to see that inflation in oil prices feeling into construction costs, how does that impact your CapEx plans?

Would you rather increase that CapEx because probably you would be able to transfer that to higher rents for data centers, or would you rather just do less megawatts and keep to your original CapEx commitments?

It depends on the relative impact. Far, the first, Phase 1 is completed.

Phase 2, I would say 80% to 85% is ordered at fixed price and being received as we speak. In Phase 3, of course, yes, it will have an impact.

That impact, in our opinion, for the moment, is confined to steel, but not significantly, concrete, and then the oil costs, or fuel costs for groundworks, etc. As the civil construction is around 25% of the total budget of a data center, unless the movements are gigantic, and we move into a 20% deviation, it shouldn't impact that much our total figures.

Rents continue playing in our favor. We are seeing now rents in the market above what we have underwritten for Phase 3.

Rents might give us a hand if that happens.

Thank you very much. That's super clear.

Maybe also on kind of supply chain bottlenecks, based on the conversations that you're having with your prospective tenants, would you say that they are a little bit worried about not receiving their equipment in time, or maybe the market just not being able to supply to all the demands for equipment that all these companies are placing in?

Not for the moment. In fact, NVIDIA, if any, they have normalized a little bit the delivery times that, at some point, were really, really long, particularly with the initial deliveries of GB200, there was a significant bottleneck.

Now they are little by little normalizing. They have increased their production capacity.

This is good. What the clients are not getting is data center capacity.

We are seeing now that in some cases, they are trying to push for longer-term contracts, which is a clear sign that they are under certain stress to secure IT capacity. I don't surrender.

I believe at some point in the future, we will be able to charge back some of the common expenses. At present, as the system is they pay you a lump sum, and they forget.

There is a gross to net conversion which is significant and much higher than in other asset classes. I believe this is one of the things that could change in the future because unless the rent inflation continues going up and up and up, at some point, maybe the rent inflation stops, but they start accepting some charge back of part of the expenses, which is the same.

The net effect is an increasing NOI, which will be good for all parties. From what we see, there are no signs of abatement of the demand.

In fact, up to now, everyone was saying, "What do you have ready for '26?" because '27 and '28, I still need to see whether I get clients or not.

Now, people is starting to ask, "What do you have ready for '27, '28?" because they already have visibility on back-to-back clientele up to '28.

I'm sure next year, that benchmark is going to move to '30 and eventually '32 because, particularly in Europe, we are not building capacity at enough pace to cope with the current demand.

Thank you. Thank you very much.

It's a pleasure, Ana. Thank you.

Hello, everyone. I would have a couple of questions actually.

The first one would be a follow-up question on shopping centers. We clearly see that there are great spot currently in Spain.

I was wondering about your strategy for this segment going forward looking at acquisitions. Do you contemplate more acquisitions, more opportunities outside of the Balcony portfolio there?

What about disposals in front of that? Do you have disposals budget?

Okay. Look,

one thing in reality is pretty much tied to the other. In terms of shopping center, our strategy is very simple.

It's to try to manage our yield through rents. We are trying to push a little bit of rents in order to send back the occupancy cost ratios to, let's say, more normalized levels.

We are trying to basically extract a little bit more cash flow from that portfolio, benefiting from the current favorable situation in consumptions. Regarding acquisitions, very difficult.

It's very difficult to find portfolios that really makes sense for us. Balcony, there were two, three, four assets that were really interesting for us, but this is just one opportunity that we looked at on an opportunistic basis.

I'm not sure there will be many more like these in the immediate foreseeable future, which again brings the question some of you make to me sometimes that why didn't you buy the Unibail leftovers, etc.? Because we run a listed company, and in a listed company, you can be contrarian, but only this much contrarian.

Because if you are super contrarian, people will kill you in a public place because, "Oh, shopping centers, they are about to disappear in the US." Sometimes you need to take decisions a little bit delayed in time because you need to be cleaner than the cleanest.

Yes, if there is an acquisition opportunity in the market, we'll have a look at it. If not, we will simply enjoy our portfolio.

There will be many more cycles in the future. There will be other situations in the future.

10 years from now, the online sales will start going up again. Now they are completely stalled, single-digit growth figures, but maybe in 2035 online sales skyrocket again, and people start being afraid of shopping centers disappearing.

Then maybe we venture into some acquisition, and I will remind you of what you told me about buying more shopping centers because that would have been a good idea had we executed it like 3 years ago. Anyway, and then disposals: We will continue disposing of around 1% of our portfolio per year.

The budget for this year, save error, is like 130 or something like that. We will try to comply with our internal disposal budget.

We would have accelerated a little bit in case we had bought the Balcony portfolio. If we don't buy the Balcony portfolio, then why selling income?

We will keep it. I know some of you say, "Why don't you sell all the traditional assets and become a mono-asset class, pure-play data center company?"

That would be super cool. We would be the coolest managers in Europe for the next 10 years.

Then one day, when data centers hit the wall because at some point there will be maturity, and there could even be oversupply, then, what do we do? You get out of our shareholding list, and our share price plummets.

It would be a pity because the company at present is pretty well balanced, and we will endeavor to continue keeping that sort of balance in our income streams.

Thank you. My second question relates to logistics.

Clearly we can see that one departure can weigh much on operating KPI. I was wondering if you have any other tenant like GXO that will leave in the coming quarters?

Actually, I will have the same question on offices. What are your main leasing challenges in the coming quarters in terms of tenant departures?

Okay. One very important point in this respect, Stéphanie, is that we calculate occupancy based on GLA, square meterage.

As a consequence, any departure in logistics, of course, is meaningful for the total occupancy of the company. However, from a rent perspective, it's like leasing 1,000 square meters of offices, okay?

Don't be carried away by what happens in logistics in square meterage terms. We do not expect to have any further departures, particularly this year, but, at some point, of course, the portfolio is a moving portfolio, and there could be in the future departures in logistics that we will try to replace.

When the cycle is helping us, it's easier to replace. When the cycle doesn't help you, it's more difficult to replace.

Remember always, we calculate occupancy is not economic occupancy, is not financial occupancy. It is space occupancy.

We calculate based on space. In fact, as of year-end, we will start reporting the occupancy in data centers, and believe it or not, it will not move the needle that much because in square meterage terms, the data centers are relatively meaningless.

Even though we bring into the equation at the end of the year Barcelona 1, Arasur 3, and Madrid-Getafe 1, that is like 60,000 square meters, 100% occupied, they will make up for the GXO shed, but that's it. However, financially speaking, it is super important, okay?

Likewise with offices. I think in offices, the team did a wonderful preemptive work in the past years securing extensions of the biggest leases we have in the portfolio because we still have like 70% of our portfolio is multi-tenant, but 30% of our portfolio in offices is headquartered leases.

Of course, they can mean a lot in case you lose the client. Most of that job has been already done.

We renewed Pricewaterhouse, we renewed Técnicas Reunidas, we renewed Indra, we renewed in due time Endesa. We are in a relatively comfortable position, and we are pretty mindful of the fact that for some of those headquarter leases, there is a bilateral relationship with clients.

We highly value the bread and butter nature of their cash flow. If at all possible, our first idea is always to renew, unless we want to vacate the building for conversion into residential or things like that.

Our first idea is always to renew. We don't expect any exits this year in offices in our portfolio.

For next year, I will need to check the forward office report, but not for this year. I have been checking everything recently on the occasion of our board yesterday, and there is nothing significant going out this year, neither in offices, nor in logistics, nor in shopping centers.

I think the year, as commented on the full-year results, should be a year of relative continuation of the performance of 2025, in which you will see a significant hike in top line that will not be matched by a significant hike in cash flow owing to the financial expenses line. Other than that, it's okay.

Then next year, you will see a much more significant jump in the top line that will be accompanied by some cash flow growth.

Thank you so much.

It's a pleasure.

Thank you very much. There are no more questions.

We thank you all very much for being here with us in this 3M 2026 trading update. Where we are at disposal if you have any additional questions.

Thank you very much.