Last Update11 Aug 25Fair value Increased 114%
kapirey has decreased revenue growth from -2.2% to -3.6%.
Merlin Propiertis is a Spanish REIT with 4 lines of business:
1. Bureaux
2. Logistics
3. Shopping Centers
4. Data Centers
Graph 1: Return on assets by business line.
This year does not present significant lease expirations, it will be the next 3 years that will define the group's medium-term revenues, The group's investments are drifting towards data centers, as they have higher returns and growing demand.
Figure 2: Annualized lease expirations by business segment
On 2 November 2026, 800 million euros of Eurobonos Merlin Properties Socimi at 1.87% will mature XS1512827095, taking into account Merlin's cash flow generation capacity, debt maturities should not supose any problem for the SOCIMI.
Graph 3: Medium and long-term debt maturities
Figure 4: Earnings and Revenue History
Why does Merlin consider data centers a profitable business?
1. The European x4 Data Center Market to 2035 according to S&P and World Bank data.
Graph 5: Potential growth of data centers in Europe
2. 70% of the submarine data cables linking the US and Europe pass through the Iberian Peninsula
3. Energy costs in the Peninsula are very competitive <€40/MWh
How are Merlin carrying out its investment in Data Centers, Plan Mega?
1. Merlin properties has partnered with Endeavour, CEO and founder Jakob Carnemark.
- He has more than 30 years of experience in the critical infrastructure sector, having worked in companies such as Skanska, IBM, Telus and Goldman Sachs.
- Prior to Endeavour, he founded Skanska Mission Critical and Aligned Energy, the latter becoming a multi-billion dollar company in the data center sector.
- Edged Energy is a subsidiary of Endeavour, specializing in the development of ultra-efficient data centers, designed for AI workloads and waterless cooling.
Graph 8 Mega pipeline plan
Phase I expects to lease 45 MW in 2027 with an annual rent between €66 million and €92 million Gross YoC 15.1%
Phase II 246 MW in 2029 with an annual income of €379 million gross YoC 14.2%.
The company's expansion plans are not limited to Data Centers, in logistics it expects to add 291 Km2 GRI 17.2 million € by 2027, YoC 7.5% YoC capex 11.1%. And in offices, it expects to build €795 million until 2040 (€4,592/m2) and a return on costs of 7.25%
Assumptions
I will start from the most conservative situation, where Merlin's 5-year plans are met and possible margin decreases in the renewals of lease expirations do not affect their income, as they will be offset by the higher margins from the leases of the data centers. Maintaining their current performance, 11% adding the 3.4% growth in rents for the first half of 2025 and the profit margin drops to 90%.
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Disclaimer
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