This article first appeared on GuruFocus .
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Occupancy Rate:95.6% overall, with offices at 94.2% and logistics at 96.4%.
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FFO Growth:Increased by 5.1% year-on-year to EUR 326.7 million.
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Office Like-for-Like Rental Growth:3.5% with a release spread of 4.8%.
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Logistics Release Spread:5.8% despite a 3% drop in occupancy.
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Shopping Centers Like-for-Like Growth:4.7% with an occupancy cost ratio of 11.0%.
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Data Centers Occupancy:100% for Phase 1, with significant progress in Phase 2.
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GAV Increase:4.7% year-on-year.
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Loan-to-Value Ratio:28.9%, with 100% fixed rate and no maturities until November 2026.
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Total Shareholder Return:10.2% for the year.
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GRI:EUR 541.9 million, with a 3.5% like-for-like increase.
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Dividend Per Share:Proposed at EUR 0.44.
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Net Initial Yield:4.2% for offices, 5.0% for logistics, and 5.7% for shopping centers.
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Data Centers Gross Yield on Cost:Phase 1 at 15.8% and Phase 2 expected at 14.4%.
Release Date: February 27, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Merlin Properties SOCIMI SA ( MRPRF ) reported a strong operating momentum with satisfactory rental growth across all asset classes, including data centers.
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The company achieved a high occupancy rate of 95.6% and a solid FFO growth of 5.1% year-on-year.
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The data center division performed exceptionally well, contributing significantly to the company's value uplift and achieving a full derisking of Phase 1.
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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.
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The company proposed a dividend per share of EUR0.44, reflecting a strong total shareholder return of 10.2%.
Negative Points
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The Barcelona office market remains a weak spot due to oversupply, affecting occupancy rates.
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Logistics saw a decrease in occupancy by 3 points, attributed to the loss of a tenant in a large warehouse.
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The company anticipates flat EPS and DPS for 2026 due to increased financial expenses absorbing top-line growth.
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Merlin Properties SOCIMI SA ( MRPRF ) faces challenges in closing deals with hyperscalers due to complex negotiations and potential unfavorable terms.
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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.
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 .
