MERLIN Properties SOCIMI, S.A. Trade Ideas — BME:MRL

Merlin and Iberdrola Drive Spain’s Largest Green Data Center By Ion Jauregui – Analyst at ActivTrades Merlin Properties has taken a decisive step in its strategic plan to establish itself as a key player in the data center sector in Southern Europe. The REIT has formed a partnership with Iberdrola to ensure the supply of renewable energy to the Bilbao Arasur campus, located in Ribabellosa (Álava), which is set to become Spain’s largest data center, with a total capacity of 350 MW IT. Iberdrola will build a 125.89 MW photovoltaic park in Armiñón, the largest in the Basque Country, which will power the complex under a long-term Power Purchase Agreement (PPA). The investment will amount to €70 million and will be managed by Ekienea, a company jointly owned by Iberdrola (75%), the Basque Government (18%), KREAN (5%), and the Alava Provincial Council (2%). The facility is expected to be fully operational by 2027. The project is part of Merlin’s Mega Plan, which involves a total investment of €2.4 billion by 2028, with operations in Madrid, Bilbao, Barcelona, and Lisbon. Arasur will serve as its flagship campus: it already has a first operational building of 22 MW IT and a second under construction of 48 MW IT, with future phases expected to increase capacity to 70 MW IT per building. From a strategic perspective, this partnership strengthens Merlin’s sustainability and business predictability. By securing stable, green energy over the long term, the company mitigates exposure to electricity price volatility and reinforces its ESG positioning. Additionally, the data center business is expected to generate recurring revenues exceeding €400 million annually by 2029, nearly double the current rental income. Technical Analysis In the markets, Merlin shares are currently trading around €13.26, after reaching annual highs near €13.36. The stock maintains a bullish trend, with an RSI of 66.8% and a positive MACD, suggesting continued upward momentum, though there is some risk of a pullback if resistance levels are not broken. The moving average crossover remains bullish, with the 50-day moving average acting as support, aligned with the Point of Control (POC) in the mid-range. Key technical levels are €12.78 as primary support and €12.31 as secondary support, while the current highs represent immediate resistance. A strong break above this level could open the way to targets in the €14–€14.50 range, while a pullback could bring the price back toward the identified support levels. Robust Growth Strategy Merlin combines a robust digital infrastructure growth strategy with a favorable technical outlook, reinforcing its appeal to investors seeking exposure to sustainable and tech-driven assets within the European real estate market. ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance and forecasting are not a synonym of a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Political risk is unpredictable. Central bank actions can vary. Platform tools do not guarantee success.

Socimis: Merlin and Colonial fall because of the Tax Reform The Spanish real estate sector is facing one of its biggest challenges in years, following the announcement of the agreement between PSOE and Sumar to include in the General Budget a proposal that eliminates the favorable tax regime for Socimis. This measure has not only caused significant falls in the share price of the main companies in the sector, such as Merlin Properties and Inmobiliaria Colonial, but has also sparked a debate on the economic and strategic impact of this decision. Stock market impact The uncertainty hit Merlin Properties hard, whose shares fell 4.24% yesterday to 9.71 euros, erasing all the gains accumulated during the year. Inmobiliaria Colonial fell 3.11% to 5.29 euros, accumulating a loss of 14.6% so far in 2024. Today's opening was positive at 9.77 for the former and 5.525 for the latter. These falls have only reflected not only the market's immediate reaction to these changes, but also concerns about the future of the sector. The elimination of this tax exemption, which currently allows Socimi to be taxed at 0% instead of 25% corporate income tax, will drastically reduce firstly their cash generation and secondly their ability to pay dividends on a one-off basis. In other words, this law is likely to have dynamited the Socimi business in part. It is unlikely that such a measure will gain the necessary support in Parliament, since the mere announcement has already affected the perception of the real estate sector. Even, extending to apply a tax on undistributed profit, something similar to a proposal already discarded in 2020. The recommendation possibly with nothing clear in the face of such a law for large managers could move from “Buy” as a sure thing to “Sell”, in a move ahead of such high regulatory uncertainty for the sector. Or at the very least, to establish a speculative operation and not so much an investment one. Sector Response Merlin Properties and Inmobiliaria Colonial have expressed their concern, warning that the tax change would not only impact their business model, but also discourage foreign investment in Spain. Colonial, with a strong presence in Paris, has already indicated that it will re-evaluate its investment strategy, hinting at the possibility of redirecting its operations to more stable and fiscally attractive markets. For its part, Merlin Properties highlights that the current tax regime for Socimis is aligned with international standards for REITs, considered essential for the development of offices, shopping centers and logistics. Technical Aspect If we look at the chart of Merlin (Ticker AT: MRL.ES) and Colonial (Ticker AT: COL.ES) is palpable fear already reflected on the 12th in both assets, currently Merlin had developed a good year upward until mid-September, from that date has been correcting healthy in demand liquidating selling positions to collect profits and on Friday and Monday have been given the signals indicated. Currently it is not very clear if it will return to the POC zone around 10.50, since the RSI indicates an oversold level of 33.69%, so it should recover positions. As for Colonial, its evolution has been very strong and with a strong upward trend and then, like Merlin, it has corrected in September. Currently the bearish gap has affected it in a different way since both companies have had very different performances, but it would not be unusual to see how this one also tries to climb towards the POC of 6 euros, although it will cost it since its current RSI is 45.58% so it is not as oversold as in the first one. Currently both practically replicate the situation of a 50-day average crossing below the 100-day average, although in the second one it seems that the 200-day average is starting a bullish crossover over the 100-day average, so we could see a faster price recovery in Colonial than in Merlin, due to the opportunistic appetite of short-term speculators. Conclusion The elimination of the Socimis tax regime could radically transform the Spanish real estate landscape. Beyond the pressure on large companies in the sector, the country risks losing its attractiveness as an investment destination compared to other European markets. Parliament's final decision will mark a turning point, not only for the Socimis, but also for the general confidence in the Spanish economy as a safe place to invest. Ion Jauregui - Analyst ActivTrades ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.

MERLIN Possible long scenario for Merlin.

MERLIN Properties SOCIMI, S.A.

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