Merlin Properties Socimi, S.a. · BME:MRL
Merlin Properties Socimi — ESG Presentation (March 2024)
50 slides from Merlin Properties Socimi's sustainability presentation, March 2024
Slide 1: ESG Presentation
1 MERLIN PROPERTIES
Slide 2: Disclaimer
DISCLAIMER This presentation has been prepared certain assumptions and estimates. These offering, will not be registered under the This presentation may include forward- by MERLIN Properties SOCIMI, S.A. (the internal analyses may have not been verified U.S. Securities Act of 1933, as amended (the l
Slide 3: Contents
––– MERLIN Overview ––– Sustainability pillars ––– Pathway to Net Zero CONTENTS ––– Environmental performance ––– Social performance ––– Certifications & scorings ––– Green assets and financing
Slide 4: MERLIN Overview
MERLIN OVERVIEW
Slide 5: A snapshot of MERLIN
MERLIN overview | A snapshot of MERLIN € 11,270m Listed GAV in Spain & Portugal € 475.6m GRI € 284.2m REIT FFO regime € 4,050m NET DEBT € 35.0% IBEX-35 LTV 5
Slide 6: A snapshot of MERLIN: GAV and GRI breakdown
MERLIN overview | A snapshot of MERLIN 6.2% 3.0% 6.2% 3.0% otros 3.0% 0.1% 3.0% 0.1% otros 6.9% 16.9% 16.9% 16.9% Logistica Logistica CC CC Gross asset Gross rental value 55.8% oficinas 55.8% oficinas income 53.6% 53.6 (31/12/2023) (31/12/2023) 1% 18.1% 26.4% 26.4% Offices Shopping Centers Logistics
Slide 7: Reconvening our strategy
MERLIN overview | Reconvening our strategy 50% 50% Traditional(1) Digital(2) 75% Digital 25% Traditional (1) Offices + Shopping centers 7 (2) Data centers + e-commerce related logistics
Slide 8: Positioning
MERLIN overview | Positioning #1 REIT IN OFFICES AND LOGISTICS #1 • Presence in prime cities: Madrid, Barcelona, Lisbon • Flexibility to offer multitenant or headquarter buildings Offices • Capacity to adapt to the needs of the tenant #1 • “One-stop-shop” solution for logistics operators wishing to
Slide 9: Offices
MERLIN overview | Offices PRIME SPACES IN BOTH CBD AND NBA OFFERING A WIDE VARIETY OF SOLUTIONS TO CLIENTS sqm Prime+CBD NBA Periphery Madrid 239,073 487,685 86,157 Barcelona 137,293 39,600 25,385 Lisbon 111,572 12,260 - Other - - 18,306 By location By product Otros Otros Lisbon Lisbon 17% Barcelona
Slide 10: Logistics
MERLIN overview | Logistics NATIONAL FOOTPRINT IN THE MAIN LOGISTICS HUBS sqm Madrid-A2 Madrid-A4 Barcelona(1) Sevilla País Vasco Valencia Zaragoza Lisbon In operation 809,705 154,511 889,103 139,218 99,491 61,604 21,579 45,171 WIP Best II 214,467 - - - - - - - WIP Best III 98,924 - - 15,122 - 96,57
Slide 11: Shopping centers
MERLIN overview | Shopping centers URBAN AND DOMINANT ASSETS OFFERING NATIONAL SCALE IN HIGH GDP/CAPITA AREAS Muy grande sqm Urban Dominant(1) Secondary Spain 225,366 167,813 20,878 Lisbon Portugal - 60,098 - by GAV Other Spain By Type By location Muy grande • Lisboa 21% • Valencia 11% • Urban 61% •
Slide 12: Data centers
MERLIN overview | Data centers 4 STRATEGIC LOCATIONS IN THE IBERIAN PENINSULA TO DEVELOP STATE-OF-THE-ART DATA CENTERS SUITABLE FOR AI Bilbao - Arasur Barcelona - PLZF Immediate IT capacity 24 MW Immediate IT capacity 16 MW Potential IT capacity 76 MW In operation In operation Lisbon - VFX Madrid -
Slide 13: Sustainability Pillars
SUSTAINABILITY PILLARS
Slide 14: MERLIN's purpose
Sustainability pillars | MERLIN’s purpose Making an impact Following the 2.0 °C It is an ambitious Our targets build on the Sustainable assets pledge made at the strategy with clear strong progress we have COP21 Convention on actions to support the made since inception. MERLIN designs Climate Change
Slide 15: Sustainability policy
Sustainability pillars | Sustainability policy Principles Goals SDG Actions undertaken Installation of energy efficient Develop and operate systems and equipments sustainable assets Active management Mitigate the carbon footprint Photovoltaic plan (Project Sun) of climate of the whole value chain ch
Slide 16: MERLIN's journey
Sustainability pillars | MERLIN’s journey DISTINCT TRACK RECORD ON ESG SINCE INCEPTION, WHICH POISES MERLIN TO SUCCESSFULLY IMPLEMENT OUR PATHWAY TO NET ZERO 2015 2016 2018 Baseline 2020 2022 • Launch of the certification • Obtained first LEED • Procurement of renewable • Pathway to Net Zero program
Slide 17: Milestones and objectives
Sustainability pillars | Milestones and objectives THE GROUP’S ENVIRONMENTAL SUSTAINABILITY IS A KEY ASPECT TO ENSURE COMPLIANCE WITH ITS TARGETS AT ALL LEVELS AND TO ENHANCE ITS VALUE CREATION, WITH ACTIVE MANAGEMENT OF CLIMATE CHANGE AND EFFICIENCY IN THE USE OF RESOURCES AS KEY PILLARS Launch of
Slide 18: Sustainability governance
Sustainability pillars | Sustainability governance GOVERNANCE COMPENSATION Short-term Incentive Plan 7.5% Improvement in Scorings 13 members 7 members 9 members 7.5% Improvement in GHG emissions Long-term Incentive Plan • 4 BoD directors Including the following • 3 MRL employees departments: 10% • S
Slide 19: Materiality analysis
Sustainability pillars | Materiality analysis DOUBLE MATERIALITY HIGH FINANCIAL MATERIALITY Relationship Corporate ethics with customers and governance Energy efficiency and and users emissions reduction Cybersecurity and data processing Working conditions Risk management of employees Use and manage
Slide 20: Pathway to Net Zero
PATHWAY TO NET ZERO
Slide 21: Pathway to Net Zero at a glance
Pathway to Net Zero | At a glance 1 2 3 4 5 Reducing Reducing Offsetting Reducing Renewable operational embodied residual tenant energy carbon carbon emissions emissions 85% reduction in Embodied carbon Carbon neutrality Assessment as from Procurement operational carbon footprint calculation 2022. T
Slide 22: Reducing operational carbon
Pathway to Net Zero | Reducing operational carbon Baseline (2018) Target (2028) Carbon footprint (scope 1 + 2) 22,753 Tn CO2 3,000 Tn CO2 Carbon intensity (scope 1 + 2) 27.4 kg/sqm 3.2 kg/sqm Strategy 100% On site solar Renewal of heating Energy Energy saving renewable energy energy generation and c
Slide 23: Reducing operational carbon: performance to date
Pathway to Net Zero | Reducing operational carbon | Performance to date Scope 1+2 market based emissions Scope 1+2 market based intensity (Tons CO2) (Tons CO2 / sqm) 24.8 20,198 19.9 16,946 3,069 3,429 2,711 2,433 3.2 3.5 2.9 2.7 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023 (baseline)
Slide 24: Reducing embodied carbon
Pathway to Net Zero | Reducing embodied carbon Target Carbon footprint to be assessed Assessment in all new developments and refurbishments Set targets for Offices, Logistics Reduction and Shopping Centers Strategy Calculation of carbon footprint Bidding process for construction Use of low carbon ma
Slide 25: Embodied carbon: progress to date
Pathway to Net Zero | Reducing embodied carbon | Progress to date Assesment All developments and / or refurbishments >€ 3m policy Assesments Offices Logistics Shopping Centers completed # 2 2 1 Maximum Offices Logistics Shopping Centers limits going forward KgCO2/sqm 500 400 500 25
Slide 26: Plaza Ruiz Picasso
Pathway to Net Zero | Reducing embodied carbon | Plaza Ruiz Picasso 11 GLA Completion Embodied carbon intensity Electricity source EPC rating targeted 36,899 sqm 2023 375 kgCO2/sqm 100% A renewable energy 26
Slide 27: Josefa Valcárcel
Pathway to Net Zero | Reducing embodied carbon | Josefa Valcárcel 48 GLA Completion Embodied carbon intensity Electricity source EPC rating targeted 19,893 sqm 2025 112 kgCO2/sqm 100% A renewable energy 27
Slide 28: Cabanillas Park II B
Pathway to Net Zero | Reducing embodied carbon | Progress to date - Cabanillas Park II B GLA Completion Embodied carbon intensity Electricity source EPC rating targeted 47,464 sqm 2024 247 kgCO2/sqm 100% A renewable energy 28
Slide 29: San Fernando III
Pathway to Net Zero | Reducing embodied carbon | Progress to date - San Fernando III GLA Completion Embodied carbon intensity Electricity source EPC rating targeted 43,245 sqm 2024 330 kgCO2/sqm 100% A renewable energy 29
Slide 30: Callao
Pathway to Net Zero | Reducing embodied carbon | Progress to date - Callao 5 GLA Completion Embodied carbon intensity Electricity source EPC rating targeted 10,550 sqm 2026 420 kgCO2/sqm 100% A renewable energy 30
Slide 31: Offsetting unavoidable emissions
Pathway to Net Zero | Offsetting unavoidable emissions Own initiatives undertaken and implemented by MERLIN’s sustainability team Certified by science-based experts MERLIN will offset unavoidable Focus on nature-based carbon emissions solutions with the following strategy Positive impact on local an
Slide 32: Offsetting unavoidable emissions: progress to date
Pathway to Net Zero | Offsetting unavoidable emissions | Progress to date • Signing of an agreement with the landowner and/or land manager for Legal the agreed term (between 30-50 years) • Supervision by the competent Phase 1 administrations and by an independent third party Analysis of MERLIN’s for
Slide 33: Reducing the whole value chain emissions
Pathway to Net Zero | Reducing the whole value chain emissions OUR PATHWAY BROADENS ITS SCOPE TO INCLUDE TARGETS COVERING TENANT-CONTROLLED SPACE AS WELL AS MOBILITY EMISSIONS (SCOPE 3) Target Report scope 3 estimate 2022 Engagement with top tenants to share real data 2022 Green clauses 100% new con
Slide 34: Whole value chain emissions: progress to date
Pathway to Net Zero | Reducing whole value chain emissions | Progress to date AN ENTICING GREEN CLAUSE TO ENGAGE TENANTS IN OUR PATHWAY TO NET ZERO 3 milestones to be achieved in order The tenant also agrees to share to benefit from the rent reduction… their actual data consumption Implementation so
Slide 35: Renewable energy: Project Sun
Pathway to Net Zero | Renewable energy: Project Sun Procurement 63 assets 2 A Coruña Bilbao across all Baseline (2018) 1 1 Vitoria asset categories 1 1 0% Zaragoza 5 Barcelona Today 1 100%(1) Total Investment 1 Target (2030) 23 Madrid Valencia € 31.1m 1 15 1 1 1 100% (1) 1 4 1 Lisbons Palma de Mallo
Slide 36: Project Sun: progress to date
Pathway to Net Zero | Project Sun | Progress to date Projects Capacity (Mwp) 28 14.9 executed executed 35 30.5 under execution under execution or to be executed # households(1) we can supply 6,467 executed 13,205 under execution 36 (1) Using as reference 3.49 MWh/year consumption of an average house
Slide 37: Environmental Performance
ENVIRONMENTAL PERFORMANCE
Slide 38: Energy for MERLIN
Environmental performance | Energy for MERLIN Total energy (MWh) Total energy intensity (MWh/sqm) 121,163 120,693 118,763 0.058 0.058 0.056 Absolute 2021 Absolute 2022 Absolute 2023 Absolute 2021 Absolute 2022 Absolute 2023 113,746 111,598 109,126 0.073 0.071 0.071 LfL 2021 LfL 2022 LfL 2023 LfL 202
Slide 39: Water & Waste for MERLIN
Environmental performance | Water & Waste for MERLIN WATER WASTE 704,215 690,204 660,003 668,306 554,034 512,544 Total (m3) Absolute Absolute Absolute LfL LfL LfL 2021 2022 2023 2021 2022 2023 6,198 7,054 6,668 6,197 6,766 6,100 Total (Tns) Absolute Absolute Absolute LfL LfL LfL 2021 2022 2023 2021
Slide 40: Social Performance
ag SOCIAL N Ss ort | iy. <=) PERFORMANCE [| gp a
Slide 41: Staff
Social performance | Staff Compensation 111 Total staff 101 266 58 23 MERLIN IBEX-35 MERLIN IBEX-35 Average salary per Salary gap 47% 53% employee (€k) (x) Women Men 41
Slide 42: Social performance: community engagement
Social performance | Supporting NGOs Local community engagement Community investment > 0.1% MERLIN also contributes to Measured by the London of GRI to fund NGOs local development through Benchmarking Group (LBG) its assets, supporting different initiatives and activities in Education four key areas
Slide 43: Certifications & Scorings
CERTIFICATIONS & SCORINGS
Slide 44: LEED & BREEAM
Certifications & scorings | LEED & BREEAM CERTIFICATION PROGRAM COMPLETED WITH THE HIGHEST STANDARDS Platinum Excellent 10% 6% Silver otros correct otr Silver Correct GoldLogistica Good Lo 12% 17% Gold Platinum CC Good VeryCC go 78% 46% oficinas Excelle ofi Very Good 30% 44
Slide 45: Scorings
Certifications & scorings | Scorings Inclusion for MERLIN B Average score B C 7.2 Top 1% 3 year in a row in the Europe DJSI rd A- Financial Europe Global (negligible risk) +1st time in the World DJSI services average 83% 69% #1 Average peers: 69% Average sector: 37% IBEX-35 45
Slide 46: Green Assets & Financing
GREEN ASSETS & FINANCING
Slide 47: Eligible categories and eligibility criteria reminder
Green Assets & Financing | Eligible categories and eligibility criteria reminder ACQUISITION & OWNERSHIP OF BUILDINGS Buildings that have achieved one of the Or Or following certifications: Buildings built before 31 December 2020 Operational CO2 emissions intensity(2) • LEED Gold or above with an En
Slide 48: Eligible categories and eligibility criteria reminder
Green Assets & Financing | Eligible categories and eligibility criteria reminder ENERGY EFFICIENCY RENEWABLE ENERGY POLLUTION PREVENTION CLEAN TRANSPORTATION AND CONTROL Investments related to Investments in solar Investments related to certified Investments related replacement of obsolete photovolt
Slide 49: Green financings & allocation proposal
Green Assets & Financing | Green financings & Allocation proposal Green Maturity Outstanding Asset Allocation/Criteria Financing Date amount 2025 Bonds 26/05/2025 € 600m € 5,229m 2026 Bonds 02/11/2026 € 800m Offices 2027 Bonds 13/07/2027 € 500m € 763m 2029 Bonds 18/09/2029 € 400m Logistics 2030 Bond
Slide 50: Contact
Paseo de la Castellana, 257 28046 Madrid +34 91 769 19 00 info@merlinprop.com www.merlinproperties.com
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