Merlin Properties Socimi S.A.

CCAA Merlin Properties 2024 (EN) MERLIN PROPERTIES, SOCIMI, S.A. Financial Statements for the year ended 31 December 2024 and Directors’ Report MERLIN PROPERTIES SOCIMI, S.A. BALANCE SHEET AT 31 December 2024 (Expressed in thousands of euros) Notes to the Notes to the ASSETS financial statements 31-12-2024 31-12-2023 EQUITY AND LIABILITIES financial statements 31-12-2024 31-12-2023 NON-CURRENT ASSETS 7,799,284 7,847,747 EQUITY Note 10 4,707,425 3,902,449 Intangible assets 24,103 47,818 SHAREHOLDERS' EQUITY 4,725,420 3,911,870 Goodwill Note 5 23,161 46,321 Subscribed capital 563,725 469,771 Other intangible assets 942 1,497 Share premium 4,259,671 3,541,379 Property, plant and equipment 7,097 2,594 Reserves (107,263) (88,347) Investment property Note 6 4,421,916 4,423,414 Tresury shares (14,450) (15,410) Land 2,076,195 2,110,043 Other equity holders contributions 540 540 Buildings 2,263,788 2,273,995 Profit/(Loss) for the period 124,431 97,610 Property, plant and equipment under construction and advances 81,933 39,376 (Interim Dividend) Note 3 (101,234) (93,673) Non-current investments in Group companies and associates - 3,129,456 3,150,926 VALUATION ADJUSTMENTS- Note 10.4 (18,049) (9,475) Equity instruments Note 9 2,755,926 2,679,552 Hedging transactions (18,049) (9,475) Loans to companies Notes 7 y 16.2 373,530 471,374 Capital grants 54 54 Non-current financial investments - Note 7 167,779 149,704 Equity instruments 11,151 9,915 NON-CURRENT LIABILITIES 4,522,832 4,856,576 Derivatives - - Non-current provisions - Note 12 10,778 18,796 Loans to third parties 123,099 107,624 Long-term employee benefit obligations 4,511 4,510 Other financial assets 33,529 32,165 Other provisions 6,267 14,286 Deferred tax assets Note 14.2 48,933 73,291 Non-current payables - 4,166,316 4,487,617 Debt instruments and other marketable securities Note 11 2,781,045 3,283,337 CURRENT ASSETS 2,216,127 1,089,901 Bank borrowings Note 11 1,300,597 1,133,666 Inventories - 4,286 4,922 Derivatives Note 11 18,049 9,475 Advances to suppliers 4,286 4,922 Other financial liabilities Note 12 66,625 61,139 Trade and other trade receivables Note 7 42,701 31,224 Non-current payables to Group companies and associates Notes 7 y 16.2 4,461 450 Trade receivables for sales and services 18,327 15,766 Deferred tax liabilities Note 14.3 341,277 349,713 Trade receivables from Group companies and associates Notes 7 y 16.2 14,100 5,464 Sundry accounts receivable 491 538 Employee receivables 184 184 CURRENT LIABILITIES 785,154 178,623 Other accounts receivable from public authorities Note 14 9,599 9,272 Current payables - 630,436 26,521 Current investments in Group companies and associates - Note 7 753,560 698,393 Debt instruments and other marketable securities Note 11 621,361 20,966 Bank borrowings Note 11 3,913 2,709 Loans to companies Note 16.2 671,717 620,194 Other financial liabilities Note 12 5,162 2,846 Other financial assets Note 16.2 81,843 78,199 Current payables to Group companies and associates Notes 7 y 16.2 37,692 35,612 Current financial investments - Note 7 7,316 1,835 Trade and other payables - Note 13 117,026 116,451 Equity instruments 18 18 Payables to suppliers 45,309 42,557 Loans to companies 236 236 Payables to suppliers - Group companies and associates Notes 13 y 16.2 32,690 34,034 Debt securities 2 2 Sundry accounts payable 3,298 3,368 Other financial assets 7,060 1,579 Staff costs (remuneration payable) 11,931 11,739 Current prepayments and accrued income 14,670 13,605 Other accounts payable to public authorities Notes 13 y 14 20,797 23,853 Cash and cash equivalents - Note 8 1,393,594 339,922 Clients invoices 3,001 900 Cash 1,393,594 339,922 Current accrued expenses and deferred income - 39 TOTAL ASSETS 10,015,411 8,937,648 TOTAL LIABILITIES AND EQUITY 10,015,411 8,937,648 The accompanying Notes 1 to 23 and Appendix I and II are an integral part of the balance sheet at 31 December 2024. MERLIN PROPERTIES SOCIMI, S.A. INCOME STATEMENT FOR 2023 (Thousands of euros) Notes to the Year Year financial statements 2024 2023 CONTINUING OPERATIONS: Revenue Note 18.1 381,466 399,048 Other operating income 3,566 2,186 Staff costs - Note 18.2 (32,182) (30,946) Salaries, wages and similar expenses (28,897) (27,722) Employee benefit costs (3,285) (3,224) Other operating expenses Note 18.3 (54,280) (42,087) Depreciation and amortisation Notes 5 y 6 (69,033) (64,913) Change in provisions 8,019 (7,128) Impairment and gains or losses on disposal of non-current assets - Notes 6 ,7.2 y 9 (19,336) (47,952) Impairment and other losses (19,336) (47,952) Allocation of grants relating to non-financial assets and others 7 - PROFIT/(LOSS) FROM OPERATIONS 218,237 208,215 Finance income - Note 18.4 39,413 8,994 From marketable securities and other financial instruments 1,882 1,847 Other finance income Note 8 37,531 7,147 Finance costs - Note 18.4 (126,425) (108,893) On debts to Group companies and associates (1,935) (3,133) On payables to third parties (123,411) (105,407) Other finance costs (1,079) (353) Changes in fair value of financial instruments Note 18.4 (3,427) (9,891) Impairment and gains or losses on disposal of financial instruments - Notes 7.2, 9 y 18.4 (1,001) 5 Impairment and other losses - - Gains or losses on disposals and other (1,001) 5 FINANCIAL PROFIT/(LOSS) (91,440) (109,785) PROFIT/(LOSS) BEFORE TAX 126,797 98,430 Income tax Note 14.1 (2,366) (820) PROFIT/(LOSS) FOR THE YEAR 124,431 97,610 The accompanying Notes 1 to 23 and Appendix I and II are an integral part of the income statement for 2024. MERLIN PROPERTIES SOCIMI, S.A. STATEMENT OF CHANGES IN EQUITY FOR 2024 A) STATEMENTS OF RECOGNISED INCOME AND EXPENSES (Thousands of euros) Notes to the financial statements Year Year 2024 2023 PROFIT/(LOSS) PER INCOME STATEMENT (I) 124,431 97,610 Income and expense recognised directly in equity - Arising from cash flow hedges 2,696 (17,747) - Capital grants Notes 7 y 11 17 60 TOTAL INCOME AND EXPENSE RECOGNISED DIRECTLY IN EQUITY (II) 2,713 (17,687) Transfers to profit or loss - Arising from cash flow hedges (11,270) (4,526) - Capital grants (17) (6) TOTAL TRANSFERS TO PROFIT OR LOSS (III) (11,287) (4,532) TOTAL RECOGNISED INCOME AND EXPENSE (I+II+III) 115,857 75,391 The accompanying explanatory Notes 1 to 23 are an integral part of the statement of changes in equity for the period ending in 2024 MERLIN PROPERTIES SOCIMI, S.A. STATEMENT OF CHANGES IN EQUITY FOR 2024 B) STATEMENT OF CHANGES IN TOTAL EQUITY (Thousand of euros) Other Capital grants Share Share Shareholder Valuation Shareholder Profit/(loss) Interim Capital premium Reserves Contribution adjustments Contribution for the year Dividend TOTAL BALANCE AT END OF 2022 469,771 3,541,379 (443,080) (17,166) 12,798 540 910,716 - (444,815) 4,030,143 Total recognised income and expense - - - - (22,273) - 97,610 54 - 75,391 Transactions with shareholders: -Distribution of 2022 profit - - 352,551 - - - (910,716) - 444,815 (113,350) - Distribution of dividends - – - - - - - - (93,673) (93,673) Acquisition of treasury shares - - (252) 418 - - - - - 166 Recognition of share-based payments (Note 17) - - 2,804 - - - - - - 2,804 Delivery of 2017 stock plan share - - – – - - - - - – Delivery of flexible remuneration shares - - (370) 1,338 - - - - - 968 BALANCE AT END OF 2023 469,771 3,541,379 (88,347) (15,410) (9,475) 540 97,610 54 (93,673) 3,902,449 Total recognised income and expense - - - - (8,574) - 124,431 - - 115,857 Transactions with shareholders: - Distribution of 2023 profit - - – - - - (97,610) - 93,673 (3,937) - Distribution of dividends - (108,505) - - - - - - (101,234) (209,739) - Capital increase 93,954 826,797 (21,607) - - - - - - 899,144 Acquisition of treasury shares - - (18) (59) - - - - - (77) Recognition of share-based payments (Note 17) - - 2,804 - - - - - - 2,804 Delivery of 2017 stock plan share - - - - - - - - - - Delivery of flexible remuneration shares - - (95) 1,019 - - - - - 924 BALANCE AT END OF 2024 563,725 4,259,671 (107,263) (14,450) (18,049) 540 124,431 54 (101,234) 4,707,425 The accompanying explanatory Notes 1 to 23 and Appendix I and II are an integral part of the consolidated statement of changes in equity for the period ended as of 31 December 2024 MERLIN PROPERTIES SOCIMI, S.A. STATEMENT OF CASH FLOWS FOR 2024 (Thousands of euros) Notes to the Year Year financial statements 2024 2023 CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIES (I) 133,058 132,661 Profit/(Loss) for the year before tax 126,797 98,430 Adjustments for: 38,629 80,636 - Depreciation and amortisation charge Note 5 69,033 64,913 - Impairment losses Note 6 2,406 27,610 - Changes in provisions 6,083 20,390 - Gains/Losses on derecognition and disposal of non-current assets Note 6 16,930 20,342 - Gains/Losses on derecognition and disposal of financial instruments 1,001 (5) - Changes in fair value of financial instruments 3,427 9,891 - Finance income (39,412) (8,994) - Finance costs Note 18 126,425 108,893 - Dividend income Note 18 (81,895) (114,412) - Other income and expenses (65,369) (47,992) Changes in working capital (44,345) (50,417) - Inventories 636 (1,207) - Trade and other accounts receivable (31,037) (5,105) - Other current assets (5,482) (1,541) - Accounts payable (8,850) (41,598) - Other assets and liabilities 388 (966) Other cash flows from/(used in) operating activities 11,977 4,012 - Interest payments (115,674) (107,523) - Dividends received 91,865 102,858 - Interest received 27,779 7,149 - Collections /(payments) on debts to Group companies 867 (1) - Income tax recovered (paid) Note 14 7,140 1,529 - Other receivables/(payments) from operating activities - - CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES (II) (17,473) (113,295) Payments due to investments (310,861) (143,421) - Group companies and associates (211,244) (7,829) - Intangible assets (650) (874) - Property, plant and equipment (4,828) (736) - Investment property Note 6 (91,329) (133,258) - Other financial assets (1,519) - - Financial investments (1,291) (724) Proceeds from disposals 293,388 30,126 - Group companies and associates 248,566 - - Financial investments - - - Investment property 44,822 30,126 - Other financial assets - - CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES (III) 938,087 (22,525) Proceeds and payments relating to equity instruments- 685,870 (207,441) - Issuance of equity instruments 899,488 - - Treasury share purchases Note 10 58 (418) - Dividends paid (108,505) – - Premium refunds and reserves (105,171) (207,023) Proceeds and payments relating to financial liabilities 252,217 184,916 - Bank borrowings 165,836 1,021,625 - Issuance of debentures and bonds 92,025 - - Repayment of borrowings from Group companies and associates - - - Issuance / (repayment and amortization) of debt with Group companies and associates (5,363) (93,923) -Cancellation of interest rate derivatives - – - Repayment and redemption of debentures and bonds (281) (742,786) EFFECT OF FOREIGN EXCHANGE RATE CHANGES (IV) NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS (I+II+III+IV) 1,053,672 (3,159) Cash and cash equivalents at beginning of year 339,922 343,081 Cash and cash equivalents at end of year 1,393,594 339,922 The accompanying Notes 1 to 23 and Apendix I and II are an integral part of the statement of cash flows for 2024. Merlin Properties SOCIMI, S.A. Notes to the Financial Statements for the year ended 31/12/2024 1. Nature and activities of the Company Merlin Properties SOCIMI, S.A. (“the Company”) was incorporated in Spain on 25 March 2014 under the name Merlin Properties, S.A., Sociedad Unipersonal, in accordance with the Spanish Corporate Enterprises Act [Ley de Sociedades de Capital] On 22 May 2014, the Company requested to be included in the tax regime for listed companies investing in the property market (REITs), effective from 25 March 2014 (date of incorporation of the Company). On 27 February 2017, the Company changed its registered office from Paseo de la Castellana 42 to Paseo de la Castellana 257, Madrid, Spain. The Company’s corporate purpose is: – The acquisition and development of urban property for subsequent leasing, including the refurbishment of buildings as per Spanish Law 37/1992, of 28 December, on Value Added Tax [Ley 37/1992, de 28 de diciembre, del Impuesto sobre el Valor Añadido]; – The holding of shares in other REITs or in other non-resident entities in Spain with the same corporate purpose and that operate under a similar regime as that established for REITs with respect to the mandatory profit distribution policy enforced by law or by the articles of association; – The holding of shares in other resident or non-resident entities in Spain whose corporate purpose is to acquire urban property for subsequent leasing, and which operate under the same regime as that established for REITs with respect to the mandatory profit distribution policy enforced by law or by the articles of association, and which fulfil the investment requirements stipulated for these companies; and – The holding of shares or shares in collective property investment institutions regulated by Law 35/2003, of 4 November, on collective investment undertakings, or any law that may replace this in the future. In addition to the economic activity deriving from the principal corporate purpose, the Company may also carry on any other complementary activities; these being any that generate income representing less than 20%, taken as a whole, of the Company's income in each tax period, or any that can be classified as complementary as per prevailing legislation. The activities included in the Company’s corporate purpose may be indirectly carried on, either wholly or in part, through the ownership of shares in companies with a similar or identical corporate purpose. The direct and, where applicable, indirect performance of any activities which are reserved under special legislation are excluded. If the law prescribes the need for a professional qualification, administrative authorisation, entry in a public register, or any other requirement for the purpose of exercising any of the activities within the corporate purpose, no such activity can be exercised until all the applicable professional or administrative requirements have been met. 15 The Company engages mainly in the acquisition and management (through leasing to third parties) of offices, industrial buildings, logistic centres, local premises and shopping centres, and it may also invest to a lesser extent in other assets for lease. The 2016 financial year saw the merger by absorption of Testa Inmuebles en Renta SOCIMI, S.A. as well as the business combination carried out with the property business of Metrovacesa, S.A. The information required by section 107 of Spanish Law 43/1995, of 27 December, on Corporation Tax [Ley 43/1995 de 27 de diciembre del Impuesto sobre sociedades] relating to mergers is broken down in the 2016 financial statements. On 15 January 2020, the Company's shares were admitted to trading on Euronext Lisbon under a dual listing system. On 24 July 2024, the Company carried out a capital increase amounting to EUR 93,954 thousand with a share premium of EUR 826,796 thousand (see Note 10.1). All the Company's shares can be publicly traded and are listed on the Madrid, Barcelona, Bilbao and Valencia stock exchanges. The market price of the Company’s shares at 31 December 2024 and the average market price for the fourth quarter amounted to EUR 10.16 and EUR 10.40 per share, respectively. The Company is the head of a group of subsidiaries and is obliged under current legislation to prepare consolidated financial statements separately. These consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRSs), in conformity with Regulation (EC) no. 1606/2002 of the European Parliament and of the Council, of 19 July 2002, and with all the related implementing provisions and interpretations. The separate and consolidated financial statements for 2024 were formally prepared by the directors at the Board meeting held on 27 February 2024. The consolidated financial statements for 2024 of the Merlin Group prepared in conformity with the IFRSs adopted by the European Union present total assets of EUR 13,459,195 thousand and equity attributable to the Parent’s shareholders of EUR 7,500,980 thousand. Consolidated sales and consolidated profit attributable to the Parent amount to EUR 494,572 thousand and looses of EUR 283,759 thousand, respectively (EUR 464,779 thousand and profits of (83,497) thousand in 2023) In view of the business activities currently carried out by the Company, it does not have any environmental liability, expenses, assets, provisions or contingencies that could be significant with regards to its equity, financial position and results. Therefore, no specific disclosures relating to environmental issues are included in these notes to the financial statements. 1.1 SOCIMI Tax Regime Merlin Properties, SOCIMI, S.A., as the Parent of its Group, is governed by Spanish Law 11/2009, of 26 October, amended by Spanish Law 16/2012, of 27 December and following regulations, regulating listed companies investing in the property market (REITs) [Ley 11/2009, de 26 de octubre, modificada por la Ley 16/2012, de 27 de diciembre, por la que se regulan las Sociedades Anónimas Cotizadas de Inversión en el Mercado Inmobiliario]. Section 3 of that Law sets out the investment requirements for these types of companies, namely: 1. At least 80% of a REIT's assets must be invested in urban property for leasing purposes and/or in land to be developed for leasing purposes provided such development starts within three years of acquisition, along with investments in the capital or equity of other entities referred to in section 2.1 of that Law. The value of the assets will be determined based on the average of the individual balance sheets for each quarter of the year, and so the Company may opt to calculate such value by taking into account the market value of the assets included in such balance sheets instead of their carrying amount, in which case that value would apply to all balance sheets for the year. For these purposes, the money and collection rights arising from the disposal of these properties or shareholdings, if applicable, during the same year or previous years will not be calculated, provided that, in this last case, the reinvestment period referred to in section 6 of this Law has not elapsed. 2. Similarly, at least 80% of the income for the tax period for each year, excluding that arising from the disposal of shareholdings and properties used in the compliance of its main corporate purpose, once 16 the holding period referred to below has elapsed, should come from the lease of properties and from dividends or shares in profit from these investments. This percentage is calculated based on consolidated profit if the company is a parent of a group, as defined in section 42 of the Spanish Commercial Code [Código de Comercio], irrespective of the place of residence and the obligation to prepare consolidated financial statements. That group will be exclusively composed of the REIT and all the other entities referred to in section 2.1 of that Law. 3. The REIT's property assets must be leased for at least three years. The time that the properties have been offered for lease, up to a maximum of one year, will be included for the purposes of this calculation. This period will be calculated: a) In the case of properties that are included in the REIT's assets before it avails itself of the regime, from the date of commencement of the first tax period in which the special tax regime set forth in the Law is applied, provided that the property is leased or offered for lease at that date. Otherwise, the provisions of the following letter will apply. b) In the case of properties developed or acquired subsequently by the Company, from the date on which they were leased or offered for lease for the first time. c) Shares or equity investments in entities referred to in section 2.1 of that Law must be kept in the REIT's asset base at least during three years after their acquisition or, if applicable, from the beginning of the first tax period during which the special tax regime established in that Law applies. As established in transitional provision one of Law 11/2009, of 26 December, amended by Law 16/2012, of 27 December, regulating listed companies investing in the property market (REITs), these companies may opt to apply the special tax regime pursuant to section 13 of that Law, even when the requirements stipulated in it are not met, under the condition that such requirements are met within two years of the date application of the REIT tax regime is sought. REITs are taxed at a rate of 0% for income tax. However, where dividends distributed to an shareholder owning at least 5% of the REIT's share capital are exempt from taxation or taxed below 10%, such REIT will be subject to a special charge of 19% of the dividends distributed to those shareholders, in respect of corporation tax. If deemed applicable, this special charge will be paid by the REIT within two months after the dividend distribution date. With effect for the years beginning on or after 1 January 2021, Spanish Law 11/2021, of 9 July, on measures to prevent and combat tax fraud [Ley 11/2021, de 9 de julio, de medidas de prevención y lucha contra el fraude fiscal] amended section 9.4 of Spanish Law 11/2009, of 26 October, regulating listed companies investing in the property market (REITs). Specifically, a special tax of 15% was introduced on the amount of profit obtained in the year that is not distributed, in the part that comes from: a) income that has not been taxed at the general tax rate of income tax and, b) income that does not stem from the transfer of eligible assets, once the three- year maintenance period has elapsed, which has been included in the three-year reinvestment period stipulated in section 6.1.b) of Law 16/2012, of 27 December. This special tax will be considered a tax liability under corporation tax and will accrue on the day of the resolution applying the profit for the year by the shareholders at the general meeting or equivalent body. The tax must be self-assessed and deposited within two months of the accrual. The transitional period ended in 2017, and the Company is required to comply with all the requirements of the regime from then on. The Company's Management, supported by the opinion of its tax advisors, has carried out an assessment of compliance with the requirements of the Regime in the 2023 financial year, concluding that all the requirements are met. Consequently, the Company's financial statements for the 2024, financial year, prepared by its Directors and pending approval by the General Meeting, have been prepared under the SOCIMI Regime. The Company's Directors consider that these financial statements will be approved without significant changes. The financial statements for 2023, drawn up by the Directors, were approved by the General Meeting held on 9 May 2024. 17 1.2 Corporate transactions 2024 On 27 May 2024, the companies Slack Tailwind Systems, S.L.U. and Slow Rise Spain, S.L.U. were merged by absorption by Merlin Oficinas, S.L.U. (both fully owned by the Company). On 27 November 2024, the General Meeting of Global Murex Iberia, S.L., agreed to wind and liquidate the company, fully owned by the Company. On 17 December 2024, the Company acquired 5.84% of the shares representing the share capital of HCG Levante S.L. for EUR 1,070 thousand. This company owns land for tertiary use in the city of Valencia. 2023 Total split-up of the company Metroparque, S.A. with contribution of its Shopping Centres branch of activity to Merlin Retail, S.L. and the Offices branch of activity to Merlin Oficinas, S.L. (both 100% owned by the Company), with effective account date of 1 January 2023. On 7 November 2023, the Company acquired 100% of the shares representing the share capital of Merlin Edged, S.L.U. for EUR 3 thousand. On 13 January 2023, the Company acquired 7.32% of the shares representing the share capital of Moregal Hotels, S.L. for EUR 1,585 thousand. This company owns land for tertiary use in the city of Malaga. In 2023, the Company increased its share in Silicius Real Estate, SOCIMI, S.A. to 17.91% (17.80% previously) due to the distribution of a dividend via promissory notes convertible into shares. 2. Basis of presentation of the financial statements 2.1 Regulatory financial reporting framework applicable to the Company These financial statements were prepared by the directors in accordance with the regulatory financial reporting framework applicable to the Company, which consists of: – The Commercial Code and all other Spanish commercial law; – The Spanish National Chart of Accounts [Plan General de Contabilidad] approved by Royal Decree 1514/2007, with the amendments introduced by Royal Decree 1159/2010, as well as by Royal Decree 602/2016 and Royal Decree 1/2021, and its industry adaptations. – The mandatory rules approved by the Spanish Accounting and Audit Institute to implement the National Chart of Accounts and its supplementary rules. – Law 11/2009, of 26 October, as amended by Law 16/2012, of 27 December and following provisions, regulating listed companies investing in the property market (REITs). – All other applicable Spanish accounting legislation. The figures included in the financial statements are expressed in thousands of euros. 2.2 Fair presentation The accompanying financial statements for 2024, which were obtained from the Company’s accounting records, are presented in accordance with Royal Decree 1514/2007 approving the Spanish National Chart of Accounts, as well as the amendments made thereto by Royal Decrees 1159/2010, 602/2016 and 1/2021 and, accordingly, present fairly the Company’s equity, financial position, results of operations and cash flows for 2024. 18 These financial statements, which were formally prepared by the Board of Directors, will be submitted for approval by the shareholders at the Ordinary General Shareholders Meeting, and it is considered that they will be approved without any changes. 2.3 Comparative information For comparison purposes the directors present, in addition to the figures for 2024 for each item in the balance sheet, income statement, statement of changes in equity, statement of cash flows and notes to the financial statements, the figures for 2023. 2.4 Accounting principles applied The directors formally prepared these financial statements taking into account all the obligatory accounting principles and standards with a significant effect on them. All obligatory accounting principles were applied. No non-obligatory accounting principles were applied. 2.5 Key issues in relation to the measurement and estimation of uncertainty In preparing the Company’s financial statements, the directors made estimates based on past experience and other factors that are considered to be reasonable in view of the current circumstances and that constitute the basis for establishing the carrying amount of the assets and liabilities whose value is not easily determinable through other sources. These estimates relate basically to the following: – The market value of the Company’s property assets (see Note 4.3). The Company obtained valuations from independent experts at 31 December 2024. – The assessment of possible impairment losses on certain assets (see Notes 4.1, 4.2, 4.3 and 4.5). – The fair value of certain financial instruments (see Note 4.5). – The assessment of provisions and contingencies (see Note 4.9) – The recovery of deferred tax assets and the tax rate applicable to temporary differences (see Note 4.11). – Compliance with the requirements governing REITs(see Notes 1 and 15). 21 Although these estimates were made on the basis of the best information available at 2024 year-end, events that take place in the future might make it necessary to change these estimates (upwards or downwards) in coming years. Changes in accounting estimates would be applied prospectively. 2.6 Grouping of items Certain items in the balance sheet, income statement, statement of changes in equity and statement of cash flows are grouped together to facilitate their understanding; however, whenever the amounts involved are material, the information is broken down in the related notes to the financial statements. 2.7 Correction of errors In preparing the accompanying financial statements, no significant errors were detected that would have given rise to restating the amounts included in the financial statements for 2023. 2.8 Changes in estimates and accounting policies The effect of any change in accounting estimates is recognised under the same income statement line item as that in which the expense or income based on the previous estimate had been recognised prospectively. Changes in accounting policies and correction of errors: if material, the cumulative effect at the beginning of the year is adjusted under “Reserves” and the effect for the current year is recognised in the income 19 statement. In these cases, the financial data for the comparative year presented together with those for the current year are restated. 2.9 Quantitative and qualitative information on current economic and geopolitical impacts No significant changes in the pattern of global economic activity have been observed in recent months, with global GDP growth rates expected to be slightly above 3% over the next few years (relatively modest rates by historical standards). Despite persistently high levels of uncertainty, the pace of global economic activity remains relatively robust, with services remaining the main engine of growth. The disinflation process is consolidating. In the second half of the year, headline inflation continued its gradual decline, mainly supported by a sharper-than-expected decline in energy prices. In any case, core inflation and, in particular, services inflation continue to show greater downward resilience. Monetary policy remains on an easing path in most of the world's economies. Compared with market expectations three months ago, monetary policy is now expected to ease more in the euro area and less in the United States, where strong employment data have cast doubt on the Fed's commitment to a continued downward path for interest rates. In financial markets, the following can be observed: (i) a recent outperformance of risky assets in the United States, together with an appreciation of the dollar against major world currencies and rising inflation expectations; and (ii) a rise in bond yields. Crude oil prices are lower than expected three months ago, partly due to weak demand from China. Natural gas prices, on the other hand, have rebounded recently on the back of some supply disruptions. However, this scenario is surrounded by exceptionally high uncertainty, mainly related to ongoing geopolitical tensions and, more recently, to the possible policies that the newly elected US administration might adopt in the coming months (a hypothetical general increase in tariffs would put downward pressure on economic activity and upward pressure on global inflation). Valuation of investment property and participation in Group companies and associates The Company regularly uses third parties from outside the Company as experts to determine the fair value of its property assets, whether directly managed and through the Group companies and associates in which it participates, on which the recoverable value of the assets is mainly recognised. The measurement methodology has not changed with regard to the previous year. Liquidity risk At 31 December 2024, the Company had a cash position of EUR 1,394 million at the year-end (including Treasury stock), reaching a liquidity position, including the corporate line of credit and undrawn facilities, amounting to EUR 793.3 million. The Company's directors and management are constantly monitoring the evolution of the current situation and the effects it may have on the credit market, and they believe that the Company's situation at 31 December 2024 ensures that the Company is solvent to fulfil the current obligations on the balance sheet at 31 December 2024, and there is no material uncertainty about the continuity of the Company's operations. Credit risk On the application of the simplified approach of impairment and credit risk, and also taking into consideration other differential factors of its portfolio of tenants and the characteristics of their leases, and the amounts collected thus far, the Company has concluded that the increased credit risk of its customers has not been significantly affected, with a risk of default below 1% of turnover. In relation to its other financial assets exposed to credit risk, which mainly correspond to loans to associates and third parties, the Company’s directors have determined that there has not been a significant increase in the risk, considering the measures agreed in some cases with tenants and the long-term expectations based on the historical experience with those entities, which make it possible to estimate that the credit risk will remain stable. 20 3. Allocation of profit/(loss) The distribution of profit/(loss) for the year proposed by the Company’s directors for approval by its shareholders at the General Meeting is as follows: Thousands of euros Profit/(Loss) for the year 124,431 Distribution: Interim dividend to be offset 101,234 To dividends 10,754 Other dividends distributed On 9 May 2024, the General Meeting approved the distribution of a final dividend out of the profit for 2023 in the amount of EUR 3,937 thousand, and the distribution of a dividend charged to the share premium in the amount of EUR 108,505 thousand. On 14 November 2024, the Company's Board of Directors approved the distribution of an interim dividend out of 2024 profits in the amount of EUR 101,234 thousand.. In the last five years, the Company has distributed the following dividends and Share Premium reimbursements: 2024 2023 2022 2021 2020 Distributions to shareholders 213,676 207,023 561,926 210,099 68,518 3.1 Restrictions relating to the distribution of dividends The Company is subject to the special regime for REITs. As established in section 6 of Law 11/2009, of 26 October, amended by Law 16/2012, of 27 December, the REITs opting to pay tax under the special tax regime are required to distribute the profit generated during the year to shareholders as dividends. Once the corresponding commercial obligations have been fulfilled, that distribution must be agreed within six months from year end, and the dividends paid within 30 days from the date on which the pay-out is agreed. Moreover, as specified in Law 11/2009, of 26 October, amended by Law 16/2012, of 27 December, the Company must distribute the following as dividends: – 100% of the profit from dividends or shares in profits distributed by the entities referred to in section 2.1 of Law 11/2009. – At least 50% of the profits arising from the transfer of the properties, shares or ownership interests referred to in section 2.1 of Law 11/2009, of 26 October, subsequent to expiry of the time limits referred to in section 3.2 of Law 11/2009, which are used for pursuit of the entities' principal corporate purpose. The remainder of these profits must be reinvested in other property or investments used for the pursuit of that activity within three years after the transfer date. Otherwise these profits should be distributed in full together with any profit arising in the year in which the reinvestment period expires. If the items to be reinvested are transferred prior to the end of the holding period, that profit must be distributed in full together with, if applicable, the profit generated during the year in which the items were transferred. The obligation to distribute profit does not apply to the portion of the profit attributable to prior years in which the Company was not included under the special tax regime established in this Law. – At least 80% of the remaining profits obtained. 21 When dividend distributions are charged to reserves generated from profits in a year in which the special tax regime applied, the distribution must necessarily be approved as set out above. 4. Accounting policies and measurement bases The principal accounting policies and measurement bases applied by the Company in preparing its financial statements for 2024 were as follows: 4.1 Intangible assets As a general rule, intangible assets are recognised initially at acquisition or production cost. They are subsequently measured at cost less any accumulated amortisation and any accumulated impairment losses. These assets are amortised over their useful life. When the useful life of these assets cannot be estimated reliably, they will be amortised over a period of ten years. The gains or losses arising from the derecognition of an intangible asset are calculated as the difference between the net profit obtained on the sale and the carrying amount of the asset, and are recognised in the consolidated income statement when the asset is derecognised. Goodwill Goodwill is recognised as an asset when it arises in an acquisition for valuable consideration in the context of a business combination. Goodwill is allocated to the cash-generating units to which the economic benefits of the business combination are expected to flow. After initial recognition, goodwill is measured at acquisition cost less any accumulated depreciation and any recognised accumulated impairment losses. In accordance with applicable legislation, the useful life of the goodwill is 10 years and it is amortised on a straight-line basis. These cash-generating units are analysed at least once a year for indications of impairment and, if those indications exist, they are tested for impairment in accordance with the methodology indicated below and the corresponding impairment loss is recognised. Impairment losses recognised in goodwill may not be reversed in subsequent fiscal years. Specifically, the Company recognises under “Goodwill” the goodwill that arose on the merger by absorption in 2016 of Testa Inmuebles en Renta SOCIMI, S.A. Computer software The computer software acquired or developed by the Company is recognised at acquisition or production cost and, where applicable, amortised on a straight-line basis over four years. Computer software maintenance costs are recognised with a charge to the income statement for the year in which they are incurred. 6 4.2 Property, plant and equipment Property, plant and equipment are initially recognized at acquisition or production cost, at which the amount of the additional or supplementary investments made are included, and are subsequently reduced by the related accumulated depreciation and by any impairment losses recognised, as indicated in Note 4.1 above. The revaluation surpluses or net increases in value resulting from revaluations and the assignments of gains as a result of business combinations are depreciated over the tax periods in the remaining useful lives of the revalued assets. Property, plant and equipment upkeep and maintenance expenses are recognised in the income statement for the year in which they are incurred. However, the costs of improvements leading to increased capacity or efficiency or to a lengthening of the useful lives of the assets are capitalised. For non-current assets that necessarily take a period of more than twelve months to get ready for their intended use, the capitalised costs include those borrowing costs as might have been incurred before the 22 assets are ready for their intended use and that have been charged by the supplier or relate to loans or other specific-purpose or general-purpose borrowings directly attributable to the acquisition or production of the assets. Work carried out by the Company on its own property, plant and equipment is recorded at accumulated cost, resulting from external costs plus in-house costs (determined based on in-house materials consumption) and manufacturing costs applying the same criteria as those used for inventory valuation. Depreciation of property, plant and equipment is calculated on a straight-line basis, based on the years of estimated useful life of the assets. The annual depreciation rates are applied to the respective values at the revalued cost, where applicable, and the years of estimated useful life are as follows: Years of useful life estimated Buildings for lease 50 – 75 Other fixtures 10-18 Furniture 10 Computer hardware 4 Other items of property, plant and equipment 4 – 5 Property, plant and equipment under construction is not depreciated until it enters into operation, at which time it is transferred to the corresponding property, plant and equipment account in view of its nature. Impairment of intangible assets, property, plant and equipment and investment property Whenever there is an indication that an asset with a finite useful life may be impaired, at least at year-end, which is the case for all of the Company's intangible assets, property, plant and equipment and investment property, the Company performs an impairment test to estimate the possible existence of impairment losses that reduce the recoverable amount of these assets to an amount below their carrying amount. The recoverable amount is the higher of fair value less costs to sell and value in use. In particular, for almost all investment property, the recoverable amount is determined on the basis of an independent valuation (see Note 6). If an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but such increased carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had been recognised for the asset in prior years. This impairment loss reversal is recognised as income, except in the case of goodwill, as mentioned in this Note. 4.3 Investment property “Investment Property” in the balance sheet reflects the values of the land, buildings and other structures held either to earn rentals or for capital appreciation. Depreciation of these items is carried out systematically and rationally based on the useful life of the assets and their residual value, in accordance with the normal decline in value caused by their use and by wear and tear, without prejudice to the technical or commercial obsolescence that may also affect the assets. The straight-line method is used to calculate the depreciation of investment property based on its estimated useful life (see Note 4.2). Investment property is measured as described in Note 4.2 on property, plant and equipment. The Company estimates the impairment losses on its investment property based on the fair value obtained in the appraisal performed by the independent expert. The method used to determine the fair value of the assets is detailed in Note 6. 23 4.4 Leases Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the leased asset to the lessee. All other leases are classified as operating leases. Finance leases: In finance leases in which the Company acts as the tenant, the cost of the leased assets is presented in the balance sheet, based on the nature of the leased asset, and, simultaneously, a liability is recognized for the same amount. This amount is the lower of the fair value of the leased asset and the present value, at the inception of the lease, of the agreed minimum lease payments, including the price of the purchase option when it is reasonably certain that it will be exercised. The minimum lease payments do not include contingent rent, costs for services and taxes to be paid by and reimbursed to the lessor. The total finance charges arising under the lease are allocated to the income statement for the year in which they are incurred using the effective interest method. Contingent rent is recognized as an expense for the period in which it is incurred. There are no finance leases in which the Company acts as landlord. Operating leases: In operating leases, the ownership of the leased asset and substantially all the risks and rewards relating to the leased assets remain with the landlord. If the Company acts as the lessor, income and costs arising under operating leases are allocated to the income statement for the year in which they are incurred. Also, the acquisition cost of the leased asset is presented in the balance sheet based on the nature of the asset, increased by the costs directly attributable to the lease, which are recognized as an expense over the lease term, applying the same method as that used to recognise lease income. If the Company acts as the tenant, costs arising under operating leases are allocated to the income statement for the year in which they are incurred. A payment made on entering into or acquiring a leasehold that is accounted for as an operating lease represents prepaid lease payments that are amortised over the lease term in accordance with the pattern of benefits provided. A payment made on entering into or acquiring a leasehold that is accounted for as an operating lease represents prepaid lease payments that are amortised over the lease term in accordance with the pattern of benefits provided. 4.5 Financial assets Classification The financial assets held by the Company are classified into the following categories: a) Financial assets at amortized cost: includes financial assets, including those admitted to trading on an organised market, in which the Company holds the investment to collect contractual cash flows, and the contractual terms of the asset give rise on specified dates to cash flows that are solely collections of principal and interest on the principal amount outstanding. In general, this category includes: i) Trade receivables: arising from the sale of goods or provision of services in the ordinary course of business for which collection is deferred, and ii) Non-trade receivables: arising from transactions involving loans or credit facilities granted by the Company with fixed or determinable payments. 24 b) Financial assets at fair value through changes in equity: financial assets whose contractual terms give rise, on specified dates, to cash flows that are only principal payments and interest on the amount of the principal outstanding, and are not held for trading and are not classified in the previous category, are included in this category. Investments in equity instruments irrevocably designated by the Company at the time of their initial recognition will also be included in this category, provided that they are not held for trading and should not be measured at cost. c) Financial assets at cost: the following investments are included in this category: a. equity instruments in Group companies, jointly controlled entities and associates; b. equity instruments whose fair value cannot be reliably determined, and the derivatives whose underlying is these investments; c. contributions made in joint accounts agreements and similar agreements; d. participating loans with contingent interest; e. financial assets that should be classified in the following category but whose fair value cannot be reliably estimated. Group companies are considered to be those related to the Company as a result of a relationship of control and associates are companies over which the Company exercises significant influence. Jointly controlled entities also include companies over which, by virtue of an agreement, the Company exercises joint control with one or more other venturers. d) Financial assets at fair value through profit or loss: includes financial assets held for trading and financial assets that have not been classified in any of the above categories. This category also includes financial assets that are optionally classified as such by the Company upon initial recognition that would otherwise have been included in another category, due to the fact that this classification eliminates or significantly reduces any measurement inconsistency or accounting mismatch that would otherwise arise. Initial recognition Financial assets are initially recognized, in general, at the fair value of the consideration given, plus any directly attributable transaction costs. However, transaction costs directly attributable to assets recognized at fair value through profit or loss are recognized in the income statement for the year. In the case of equity investments in Group companies affording control over the subsidiary, since 1 January 2010 the fees paid to legal advisers and other professionals relating to the acquisition of the investment have been recognized directly in profit or loss. Subsequent measurement Financial assets at amortized cost are recognized in accordance with this measurement basis, with accrued interest taken to the income statement using the effective interest method. Financial assets included in the fair value with changes in equity category will be recognized at fair value, without deducting the transaction costs that could be incurred in their disposal. Changes in fair value will be recognized directly in equity until the financial asset is derecognised or impaired, at which point the amount so recognized will be charged to the statement of comprehensive income statement. Financial assets at fair value through profit or loss are measured at fair value and the gains and losses arising from changes in fair value are recognized in the income statement for the year. Investments in Group companies and associates and interests in jointly controlled entities are measured at cost net, where appropriate, of any accumulated impairment losses. These losses are calculated as the difference between the carrying amount of the investments and their recoverable amount. Recoverable amount is the higher of fair value less costs to sell and the present value of the future cash flows from the investment. Unless there is better evidence of the recoverable amount, it is based on the value of the equity of the investee, adjusted by the amount of the unrealised gains existing at the date of measurement (including any goodwill). The valuation of the investment property of the investee companies has been carried out in accordance with 25 Valuation and Appraisal Standards published by the Royal Institute of Chartered Surveyors (RICS) of the United Kingdom and the International Valuation Standards (IVS) published by the International Valuation Standards Committee (IVSC). In the case of Company companies with an equity deficit, the Company follows the policy of recognizing provisions for this equity deficit. Impairment At least at each reporting date the Company tests financial assets not measured at fair value through profit or loss for impairment. Objective evidence of impairment is considered to exist when the recoverable amount of the financial asset is lower than its carrying amount. When this occurs, the impairment loss is recognized in the income statement. Objective evidence of impairment is considered to exist when the recoverable amount of the financial asset is lower than its carrying amount. In any case, equity instruments measured at fair value with changes in equity will be presumed to be impaired if their price has declined for one and a half years or by 40% and not recovered. The impairment is recognized in the income statement. Assets that have been impaired are reviewed at each balance sheet date to determine whether the impairment loss has been reversed. The Company derecognises a financial asset when it expires or when the rights to the cash flows from the financial asset have been transferred and substantially all the risks and rewards of ownership of the financial asset have been transferred. However, the Company does not derecognises financial assets, and recognizes a financial liability for an amount equal to the consideration received, in transfers of financial assets in which substantially all the risks and rewards of ownership are retained. However, the Company does not derecognises financial assets, and recognises a financial liability for an amount equal to the consideration received, in transfers of financial assets in which substantially all the risks and rewards of ownership are retained. 4.6 Financial liabilities The financial liabilities assumed or incurred by the Company are classified in the following categories: a) Financial liabilities at amortized cost: these include accounts payable by the Company that have arisen from the purchase of goods or services in the normal course of the Company’s business or those that, not having commercial substance and not considered derivative instruments, arise from transactions involving loans or credit facilities received by the Company. These liabilities are initially recognized at the fair value of the consideration received, adjusted by the directly attributable transaction costs. These liabilities are subsequently measured at amortized cost. b) Financial liabilities at fair value through profit or loss. Liability derivative financial instruments are measured at fair value using the same methods as those described above for financial assets at fair value through profit and loss. Assets and liabilities are presented separately on the balance sheet and their net amount is only presented if the Company has a legally enforceable right to offset the amounts recognized and also intends either to settle the amounts on a net basis or to realise the asset and settle the liability simultaneously. The Company derecognises financial liabilities when the obligations giving rise to them cease to exist. 4.7 Derivative financial instruments and accounting for hedging transactions The Group uses derivative financial instruments to hedge risks arising from its activities, transactions and future cash flows. These risks are mainly related to interest rate fluctuations. As part of these transactions, the Group enters into economic hedges. Derivatives are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured at fair value at each balance sheet date. The accounting treatment of subsequent 26 changes in fair value depends on whether the derivative has been designated as a hedging instrument and, if so, the nature of the hedged item. At the inception of the hedge, the Group documents the economic relationship between the hedging instrument and the hedged item, including whether changes in the cash flows of the hedging instrument are expected to offset changes in the cash flows of the hedged item. The Group documents its risk management objective and strategy for undertaking its hedging transactions. The Group documents its risk management goals and strategy for undertaking its hedging transactions. The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised under equity in the cash flow hedge reserve. The gain or loss relating to the ineffective portion is recognised immediately in the income statement under “Changes in fair value of financial instruments”. Gains or losses relating to the effective portion of the change in the intrinsic value of the option contracts are recognised in the cash flow hedge reserve in equity. Changes in the time value of the option contracts that are related to the hedged item (aligned time value) are recognised in other comprehensive income in the hedging reserve cost in equity. When forward contracts are used to hedge forecast transactions, the Group generally designates as the hedging instrument only the change in fair value of the forward contract related to the spot component. Gains or losses relating to the effective portion of the change in the spot component of the forward contract are recognised in the cash flow hedge reserve in equity. The change in the forward component of the contract related to the hedged item is recognised in other comprehensive income in the hedging reserve in equity. In some cases, the gain or loss relating to the effective portion of the change in fair value of the entire forward contract is recognised in the cash flow hedge reserve in equity. – Cash flow hedges: For cash flow hedges, the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised temporarily in equity and transferred to the income statement in the same period in which the hedged item affects profit or loss, unless the hedge relates to a forecast transaction that results in the recognition of a non-financial asset or liability, in which case the amounts recognised in equity are included in the cost of the asset or liability when acquired or assumed. – Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or when it no longer meets the criteria for hedge accounting. At that time, any cumulative gain or loss on the hedging instrument that has been recognised in equity remains in equity until the forecast transaction occurs. When the hedged transaction is no longer expected to occur, the cumulative gain or loss that had been recognised in equity is transferred to the income statement. Derivatives embedded in other financial instruments or in host contracts are accounted for separately as derivatives only if their risks and characteristics are not closely related to those of the host contracts and provided that such host contracts are not carried at fair value through profit or loss. The valuation techniques described in Note 5.7 are used to determine the fair value of the various derivative financial instruments. 4.8 Equity instruments An equity instrument is a contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Capital instruments issued by the Company are recognized in equity at the proceeds received, net of issue costs. The equity instruments acquired by the Company are recognized separately at acquisition cost and deducted from equity in the balance sheet, regardless of why they were acquired. No gains or losses from transactions involving own equity instruments are recognized in the consolidated income statement. If the Company’s own equity instruments are subsequently retired, capital is reduced by the nominal amount of these treasury shares and the positive or negative difference between the acquisition price and nominal amount of the shares is debited from or credited to reserves. 27 The transaction costs related to own equity instruments are recognized as a decrease in equity, net of any related tax effect. 4.9 Termination benefits Under the current law, the Company is required to pay termination benefits to employees terminated under certain conditions. Therefore, termination benefits that can be reasonably quantified are recognized as an expense in the year in which the decision to terminate the employment relationship is taken. In this sense, at 31 December 2024, the Company does not have commitments for this item, and there is no Downsizing Plan in force. 4.10 Provisions and contingencies When preparing the financial statements the directors made a distinction between: a. Provisions: credit balances covering present obligations arising from past events with respect to which it is probable that an outflow of resources embodying economic benefits that is uncertain as to its amount and/or timing will be required to settle the obligations; and b. Contingent liabilities: possible obligations that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more future events not wholly within the Company’s control. The financial statements include all the provisions as regards which it is considered that it is more likely than not that the obligation will have to be settled. Unless they are considered unlikely, contingent liabilities are not recognized in the financial statements, but rather are disclosed. Provisions are measured at the present value of the best possible estimate of the amount required to settle or transfer the obligation, taking into account the information available on the event and its consequences. Where discounting is used, adjustments made to provisions are recognized as finance cost on an accrual basis. The compensation receivable from a third party on settlement of the obligation is recognized as an asset, provided there is no doubt that the reimbursement will take place, unless there is a legal relationship under which a portion of the risk has been externalised, as a result of which the Company is not liable, in which case, the compensation will be taken into account when estimating, if appropriate, the amount of the related provision. 4.11 Share-based payments On the one hand, the Company recognises the goods and services received as an asset, if qualifying, or an expense, when obtained, with an increase to equity, if the transaction is settled in equity instruments, or with the corresponding liability, if it is settled with an amount that is referenced to the value of equity instruments. In the case of equity-settled transactions, both the services rendered and the increase in equity are measured at the fair value of the equity instruments granted, by reference to the grant date. In the case of cash-settled share-based payments, the goods and services received and the related liability are recognised at the fair value of the latter, by reference to the date on which the requirements for recognition are met. 2022-24 Incentive Plan The General Meeting on 4 May 2022 approved a long-term incentive plan consisting of the delivery of a maximum number of ordinary shares of MERLIN Properties SOCIMI, S.A. equal to 3,491,767 shares (representing 0.74% of the share capital, at the date of approval), aimed at the members of the MERLIN Group's executive and management team, including the Company's executive directors (“2022-24 LTIP”). The LTIP will be implemented through a single-cycle performance share plan with a target measurement period of 3 years, beginning on 1 January 2022 and ending on 31 December 2024, and it will be payable by the delivery of Company shares in 2025, once (i) compliance with the specific targets established for 2022-2024 has been verified and (ii) the beneficiary has remained in the MERLIN Group. 28 In relation to the targets or metrics to which the plan is linked (see Note 17), it includes market and non-market conditions. In relation to the “Total Shareholder Profitability” market condition, the Group applied a valuation methodology for the underlying assets at the delivery date of the incentive associated with the Monte Carlo simulation method. The Monte Carlo simulation is a statistical method applied to the financial modelling of the probability of different results where a random or independent variable is involved. In this regard, the Monte Carlo simulation method applied by the Group was based on a Brownian geometric model, which makes it possible to simulate the possible paths that the underlying asset can follow (price of Merlin's share and of the EPRA Nareit Development Europe index) based on the repetition of random samples to obtain different numerical results. For the development of the simulation, the generation of the random variable was carried out by applying standard normal distribution N (0.1). The average or expected value corresponding to the spot price of the Merlin share at the reporting date of the incentive and a standard deviation to describe the change with regard to the average, based on the volatility of the share, were established. In relation to non-market conditions: (i) EPRA NTA, (ii) net carbon emissions and environment and (iii) environment and society, the Group gives its estimate of compliance with them at each measurement date over the duration of the plan with the best information available. In 2024, the Company recognised an expense of EUR 2,804 thousand (EUR 2,804 thousand in 2023) with a balancing entry in reserves. 4.12 Income tax 4.12.1 General regime Tax expense (tax income) comprises current tax expense (current tax income) and deferred tax expense (deferred tax income). Current tax expense is the tax payable by the Company on its taxable income for a given year. Tax credits and other tax benefits, excluding tax withholdings and pre-payments, and tax loss carryforwards from prior years effectively offset in the current year reduce the current income tax expense. The deferred tax expense or income relates to the recognition and derecognition of deferred tax assets and liabilities. These include temporary differences measured at the amount expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities and their tax bases, and tax loss and tax credit carryforwards. These amounts are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled. Deferred tax liabilities are recognised for all taxable temporary differences, unless the temporary difference arises from the initial recognition of goodwill, goodwill for which amortisation is not deductible for tax purposes or the initial recognition of other assets and liabilities in a transaction that affects neither accounting profit (loss) nor taxable profit (tax loss). Deferred tax assets are recognised for temporary differences to the extent that it is considered probable that the consolidated companies will have sufficient taxable profits in the future against which the deferred tax asset can be utilised, and the deferred tax assets do not arise from the initial recognition of other assets and liabilities in a transaction that affects neither accounting profit (loss) nor taxable profit (tax loss). The other deferred tax assets (tax loss, temporary differences and tax credit carryforwards) are only recognised if it is considered probable that the Company will have sufficient future taxable profits against which they can be utilised. The deferred tax assets recognised are reassessed at the end of each reporting period and the appropriate adjustments are made to the extent that there are doubts as to their future recoverability. Also, unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that they will be recovered through future taxable profits. 4.12.2 REIT regime The REIT special tax regime, as amended by Law 16/2012 of 27 December, is based on a 0% corporation tax rate, provided certain requirements are met. Particularly noteworthy among those conditions is that at least 80% of income must come from urban property used for leasing purposes and acquired in full ownership or 29 through holdings in Spanish or foreign companies, regardless of whether or not they are listed on organised markets, that meet the same investment and profit distribution requirements. Likewise, the main sources of income for these entities must come from the property market, either through leasing the properties, their subsequent sale after a minimum lease period, or the income generated from holdings in entities with similar characteristics. Nevertheless, tax is accrued in proportion to dividend distributions. Dividends received by the shareholders are exempt, unless the recipient is a legal person subject to corporation tax or a permanent establishment of a foreign entity, in which case a deduction in the tax liability is established, so that these earnings are taxed at the shareholder’s rate. However, the remaining earnings will not be taxed so long as they are not distributed to shareholders. As established in Law 11/2009, of 26 October, amended by Law 16/2012, of 27 December, regulating listed companies investing in the property market (REITs), the entity will be subject to a special tax rate of 19% on the total dividends or profit shares distributed to shareholders with a shareholding in the entity of 5% or more, when these dividends are exempt or taxed at a rate below 10% in the shareholders. The Company has therefore established the procedure guaranteeing confirmation by shareholders of their tax rate, proceeding where applicable, to withhold 19% of the dividend distributed to shareholders that do not meet the aforementioned tax requirements. With effect for years beginning on or after 1 January 2021, Law 11/2021, of 9 July, on measures to prevent and combat tax fraud amended section 9.4 of Spanish Law 11/2009, of 26 October, regulating listed companies investing in the property market (REITs). Specifically, a special tax of 15% was introduced on the amount of profit obtained in the year that is not distributed, in the part that comes from: a) income that has not been taxed at the general tax rate of income tax and, b) income that does not stem from the transfer of eligible assets, once the three-year maintenance period has elapsed, which has been included in the three-year reinvestment period stipulated in section 6.1.b) of Law 16/2012, of 27 December. This special tax will be considered a tax liability under corporation tax and will accrue on the day of the resolution applying the profit for the year by the shareholders at the General Meeting or equivalent body. The tax must be self-assessed and deposited within two months of the accrual. 4.13 Revenue and expenses Revenue and expenses are recognized on an accrual basis, i.e. when the actual flow of the related goods and services occurs, regardless of when the resulting monetary or financial flow arises. Revenue is measured at the fair value of the consideration received, net of discounts and taxes. Interest and dividends received from financial assets The Company’s income that relates to dividends received from investees, in accordance with Ruling no. 2 of the Official ICAC Gazette no. 79/2009, on the classification for accounting purposes in separate financial statements of income and expenses of holding companies, is recognised as revenue, as the Company’s ordinary business activities include the management and administration of investments in other companies. Interest and dividends from financial assets accrued after the date of acquisition are recognised as income in the income statement. Interest is recognised using the effective interest method and dividends are recognised when the right to receive them is declared. Upon initial measurement of financial assets, accrued explicit interest receivable at the measurement date is recognised separately, based on maturity. Dividends declared by the pertinent body at the acquisition date are also accounted for separately. Explicit interest is the interest obtained by applying the financial instrument’s contractual interest rate. If distributed dividends are clearly derived from profits generated before the acquisition date because amounts have been distributed which are higher than the profits generated by the investee since acquisition, the difference is accounted for as a reduction in the carrying amount of the investment and not recognised as income. Revenue from sales and services Revenue from sales is recognised when the significant risks and rewards of ownership of the goods sold have been transferred to the buyer, and the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold. 30 Rental income is recognised on an accrual basis and incentives and the initial costs of the lease agreements are allocated to income on a straight-line basis. Revenue arising from variable rental income, which is calculated based on the sales of the tenants at the leased premises, is accrued on a regular basis by virtue of the most recent known sales data, given that the income can be reliably measured at this time, and is invoiced once the final sales data for the year is available. Interest income from financial assets is recognised using the effective interest method and dividend income is recognised when the shareholder’s right to receive payment is established. In any case, interest and dividends from financial assets accrued after the date of acquisition are recognised as income in the income statement. 4.14 Classification of assets and liabilities as current and non-current Assets and liabilities are classified in the balance sheet as current and non-current. For this purpose, assets and liabilities are classified as current when they are associated with the Company’s normal operating cycle and when they will foreseeably be sold, used, realised or settled within a maximum of one year; non-current assets and liabilities are different from the foregoing and will foreseeably mature, be sold or realised within a period of more than one year. 4.15 Transactions with related parties The Company carries out all its transactions with related parties at market values and in accordance with the agreements. The Company’s directors consider that there are no material risks in this connection that might give rise to significant liabilities in the future. 4.16 Environmental assets and liabilities Environmental assets are considered to be assets used on a lasting basis in the Company’s operations whose main purpose is to minimise environmental impact and protect and improve the environment, including the reduction or elimination of future pollution. Because of their nature, the Company’s business activities do not have a significant environmental impact. 4.17 Business combinations Business combinations are accounted for using the acquisition method, to which end the acquisition date and cost of the business combination are determined, measuring the identifiable assets acquired and liabilities assumed at their acquisition-date fair value. Goodwill or the negative goodwill on the combination is the difference between the fair values of the assets acquired and liabilities assumed that are recognized and the cost of the business combination all at the aforementioned acquisition date. The cost of the business combination is the sum of: – The acquisition-date fair values of the assets transferred, liabilities incurred or assumed and equity instruments issued. – The fair value of any contingent consideration that depends on future events or on the fulfilment of certain pre-defined conditions. The cost of the business combination does not include expenses relating to the issuance of equity instruments offered or financial liabilities delivered in exchange for the items acquired. Also, the cost of a business combination does not include the fees paid to legal advisers and other professionals involved in the combination, or any costs incurred internally in this connection. These amounts are taken directly to profit or loss. In the exceptional case in which negative goodwill arises on the combination, it is recognised as income in the income statement. 31 If at the end of the year in which a combination occurs it has not been possible to complete the valuation work needed to apply the acquisition method outlined above, the combination is accounted for provisionally. These provisional amounts can be adjusted during the period necessary to obtain the required information, which in no case may exceed one year. The effects of any adjustments made during this period are accounted for retroactively, and the comparative information is modified if necessary. Subsequent changes in the fair value of the contingent consideration are recognized in profit or loss, unless the consideration was classified as equity, in which case subsequent changes in its fair value are not recognised. 4.18 Foreign currency transactions The Company’s functional currency is the euro. Therefore, transactions in currencies other than the euro are considered to be foreign currency transactions and are recognized by applying the exchange rates prevailing at the date of the transaction. At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated to euros at the rates then prevailing. Any resulting gains or losses are recognized directly in the income statement in the period in which they arise. 4.19 Statement of cash flows The following terms are used in the statement of cash flows, which was prepared using the indirect method, with the meanings specified: – Cash flows: inflows and outflows of cash and cash equivalents, which are short-term, highly liquid investments that are subject to an insignificant risk of changes in value. – Operating activities: the principal revenue-producing activities of the Company and other activities that are not investing or financing activities. – Investing activities: the acquisition and disposal of long-term assets and other investments not included in cash and cash equivalents. – Financing activities: activities that result in changes in the size and composition of the equity and liabilities that are not operating activities. 5. Goodwill The goodwill recognised at 31 December 2024 arose from the merger by absorption with Testa Inmuebles en Renta, SOCIMI, S.A. in 2016. The changes in this heading in 2024 and 2023 were as follows: 2024 Thousands of euros Balance at 31/12/23 Additions Depreciation and amortisation Balance at 31/12/24 Cost 46,321 - (23,160) 23,161 46,321 - (23,160) 23,161 2023 Thousands of euros Balance at 31/12/22 Additions Depreciation and amortisation Balance at 31/12/23 Cost 69,481 - (23,160) 46,321 69,481 - (23,160) 46,321 32 The Company amortises goodwill over a period of 10 years and, therefore, recognised the related depreciation for the year under “Depreciation of property, plant and equipment” in the accompanying income statement for 2024 at EUR 23,160 thousand (EUR 23,160 thousand at 31 December 2023). The Company's directors, in accordance with their expectations of the evolution of the property market, as well as the market values of the acquired assets, have not identified any signs of impairment in their recoverable value. In this regard, at 31 December 2024 the existing gains in the property assets from Testa Inmuebles en Renta SOCIMI, S.A. amounted to EUR 737,455 thousand (EUR 714,877 thousand in 2023), as detailed as follows: Thousands of euros 2024 2023 Carrying amount of the investment property from Testa Inmuebles en Renta SOCIMI, S.A. 2,244,930 2,283,453 Fair value of the investment property from Testa Inmuebles en Renta SOCIMI, S.A. 2,982,385 2,998,330 Unrealised gains 737,455 714,877 The fair value indicated above was obtained from the valuations performed by independent experts, applying the methodology described in Note 6 below. 6. Investment property The breakdown of and changes in this heading in 2024 and 2023 are as follows: 2024 Thousands of euros Initial balance 31/12/2023 Entries, Additions and Allocations Removals, Disposals and Reversals Transfers Closing balance at 31/12/2024 Cost: Land 2,329,173 1,165 (50,358) - 2,279,980 Buildings 2,563,196 73,097 (13,926) (28,512) 2,593,855 Property, plant and equipment in the course of construction and advances 42,365 17,067 - 25,769 85,201 4,934,734 91,329 (64,284) (2,743) 4,959,036 Accumulated depreciation: Buildings (270,890) (44,337) 2,532 2,743 (309,952) (270,890) (44,337) 2,532 2,743 (309,952) Impairment: Land (219,130) (4,851) 20,196 - (203,785) Buildings (18,310) (3,728) 1,923 — (20,115) Property, plant and equipment in the course of construction and advances (2,990) (278) — — (3,268) (240,430) (8,857) 22,119 - (227,168) Investment property 4,423,414 38,135 (39,633) - 4,421,916 33 2023 Thousands of euros Initial balance 31/12/2022 Entries, Additions and Allocations Removals, Disposals and Reversals Transfers Closing balance at 31/12/2023 Cost: Land 2,345,168 4,373 (20,368) - 2,329,173 Buildings 2,396,203 85,858 (33,689) 114,824 2,563,196 Property, plant and equipment in the course of construction and advances 118,783 42,996 - (119,414) 42,365 4,860,154 133,227 (54,057) (4,590) 4,934,734 Accumulated depreciation: Buildings (238,652) (40,448) 3,620 4,590 (270,890) (238,652) (40,448) 3,620 4,590 (270,890) Impairment: Land (203,575) (24,332) 8,777 - (219,130) Buildings (23,159) (6,910) 8,805 2,954 (18,310) Property, plant and equipment in the course of construction and advances (1,401) (36) 1,401 (2,954) (2,990) (228,135) (31,278) 18,983 - (240,430) Investment property 4,393,367 61,501 (31,454) - 4,423,414 The “Land and buildings” heading includes operational property assets. In addition, undeveloped land with a book value of EUR 41,658 thousand (EUR 66,177 thousand in 2023) is also included. The “Property, plant and equipment in the course of construction and advances” heading corresponds to developing assets and assets that are being overhauled. Buildings for lease 2024 Improvements to buildings in use and in progress The additions for 2024 mainly corresponded to the development of Data Center in Getafe and the construction and refurbishment works at offices such as the Plaza Ruiz Picasso building. Acquisitions: During 2024, an office building in Madrid was acquired for EUR 542 thousand. Disposals In 2024 disposals mainly corresponded to the sale of an office building, various commercial premises and a plot of land in Madrid, and the sale of and office building in Granada. As a result of these divestments, the Company obtained a positive result of Euros 2,916 thousand, as the impairment associated with the assets disposed of, amounting to Euros 19,846 thousand, was written off on the sale. The remaining impairment reversals amounting to Euros 2,273 thousand relate to assets held by the Company at year-end 2024. 2023 Improvements to buildings in use and in progress 34 The additions for 2023 corresponded to the improvement and adaptation works carried out on certain properties owned by the Company, in particular, among others, the Plaza Ruiz Picasso building, corresponding to the office segment and the development of a Data Center in Getafe, both commencing operations during 2023, proceeding to transfer them to the appropriate heading. Acquisitions: During 2023, premises in the Porto Pi shopping centre in Majorca were acquired for EUR 1,101 thousand. Disposals In 2023, the Company sold the Vilamarina and Bonaire shopping centres, a logistics warehouse in Barcelona and a leased residential property in the Torre de Madrid. Result of these divestments: the Company obtained a loss of EUR 22,167 thousand recognised under “Gains or losses on disposals” in the accompanying income statement. The Company takes out the insurance policies it considers necessary to cover the risks that might affect its investment property. At 31 December 2024, the Company’s directors considered that the property, plant and equipment were fully insured against these risks. At 31 December 2024, the Company had no firm purchase commitments for investment property, without considering the investments committed in buildings and improvements. In 2024, no significant finance costs were capitalised in the construction costs or as a result or improvements to or refurbishments of the properties. At 31 December 2024, the Company did not have any investment property that was fully depreciated. At 31 December 2024, the Company holds property assets with an associated cost of EUR 726,686 thousand (EUR 478,308 thousand at 31 December 2023), securing various loans. At the 2024 year-end, the balance of the loans was EUR 499,719 thousand, while derivative financial instruments show a balance in liabilities of EUR 6,208 thousand. The Company holds no rights of use, seizure or similar situations with regard to its investment property. At 31 December 2024 and 2023, the gross surface areas and occupancy rates of the assets by line of business were as follows: 2024 GLA Occupancy rate (%) Offices 892,830 94% Shopping centres 114,303 98% Logistics 166,710 98% Data centers 22,508 27% Others 3,085 62% Total surface area 1,199,436 95% * Not including projects under way or land (1) The market standard for Data Centers is to measure occupancy in terms of processing capacity, taking into account the square metres of floor space required for processing rooms, which is the main subject of leases in the Data Center business. At 31 December 2024,the Data Center that the Company currently operates has an available processing capacity of 6 MW, with 1.6 MW (26.7%) committed as of that date. The Company considers as committed capacity the capacity physically occupied at the reference date or with respect to which, without being occupied at that date, there are contractual commitments reserving that capacity to ensure the future growth of the Company’s customers. 35 2023 GLA Occupancy rate (%) Offices 862,399 92% Shopping centres 114,350 97% Logistics 166,710 99% Data centers 22,508 53% Others 3,085 62% Total surface area 1,169,052 94% * Not including projects under way or land (1) The market standard for Data Centers is to measure occupancy in terms of processing capacity, taking into account the square metres of floor space required for processing rooms, which is the main subject of leases in the Data Center business. At 31 December 2023,the Data Center that the Company currently operates has an available processing capacity of 3 MW, with 1.6 MW (53.3%) committed as of that date. The Company considers as committed capacity the capacity physically occupied at the reference date or with respect to which, without being occupied at that date, there are contractual commitments reserving that capacity to ensure the future growth of the Company’s customers. All of the Company’s investment property is used for its own business activities and is located in Spain. Impairment losses The fair value of the property assets was determined by independent experts in accordance with the Appraisal and Valuation Standards issued by the Royal Institution of Chartered Surveyors (RICS) of the United Kingdom and the International Valuation Standards (IVS) issued by the International Valuation Standards Committee (IVSC). The method used to calculate the market value of the property assets involves drawing up ten-year projections of income and expenses for each asset, adjusted at the reporting date using a market discount rate. The residual amount at the end of year 10 is calculated by applying an exit yield or cap rate to the net income projections for year 11. The market values obtained are analysed by calculating and assessing the capitalisation of the returns implicit in these values. In the case of the data centre, projections at 6 years have been used, which is the period considered for the stabilisation of the market. The projections are designed to reflect the best estimate of future income and expenses from the investment properties. Both the exit yield and discount rate are determined taking into account the national market and institutional market conditions. The recoverable amount of the Company’s investment property, calculated based on the appraisals carried out by Jones Lang LaSalle, S.A., Savills Consultores Inmobiliarios, S.A. and CBRE Valuation Advisory S.A., which are not related to the Company, amount to EUR 5,786,958 thousand at 31 December 2024 (EUR 5,754,488 thousand at 31 December 2023). Based on this appraisal, the Company’s directors have identified several individual assets whose recoverable amount is less than their carrying amount and, therefore, an impairment loss of EUR 8,857 thousand (EUR 33,412 thousand at 31 December 2023) was recognised under “Impairment and gains or losses on disposals of property, plant and equipment” in the accompanying income statement for 2024. Furthermore, a reversal of impairment loss was recognised in the amount of EUR 22,119 thousand, due, mainly, to the disposal of a plot of land in Madrid, which had an associated impairment loss of EUR 18,541 thousand. At 31 December 2024, the valuations performed by CBRE Valuation Advisory, S.A., Jones Lang LaSalle, S.A. and Savills Consultores Inmobiliarios, S.A. did not indicate any type of uncertainty regarding the market value of the Company's investment property. The amount of the impairment and gains or losses on disposals of investment property described above are recognised under “Impairment and gains or losses on disposals of fixed assets” in the accompanying income statement. This heading also includes the impairment movements associated with investments in Group companies and associates, as well as those related to loans to Group companies and associates (see Notes 7.2 and 9), as detailed below: 36 Thousands of euros 2024 2023 Investment Property (3,668) (32,638) Balances with Group companies (current and non-current) 4,330 (3) Non-current investments in Group companies and associates (19,998) (12) (19,336) (48) Income and related expenses In 2024, the rental income from the investment property owned by the Company amounted to EUR 242,884 thousand (EUR 245,211 thousand at 31 December 2023) and the operating expenses of all kinds relating thereto totalled EUR 82,225 thousand (EUR 79,518 thousand at 31 December 2023). At the end of 2024 there were no restrictions on making new investment property investments, on the collection of rental income from them or in connection with the proceeds to be obtained from a potential disposal of them. a. Operating leases as lessee At the end of 2024 and 2023 the Company had contracted with lessors for the following minimum lease payments, based on the leases currently in force, without taking into account the charging of common expenses, future increases in the CPI or future contractual lease payment revisions: Thousands of euros Nominal value 2024 2023 Operating leases Minimum lease payments Within one year 768 727 1 to 5 years 64 741 832 1,468 The main expense relating to operating leases corresponds to the lease agreement that the Company entered into to rent out its offices. On 27 February 2017, the Company changed its registered office from Paseo de la Castellana 42 to Paseo de la Castellana 257, Madrid. This lease was novated in 2021 and extended until January 2026. The total lease expense accrued in 2024 amounted to EUR 880 thousand (EUR 778 thousand in 2023). The income for subleases in 2024 and 2023 from Magic Real Estate, S.L.U. and Testa Home, S.L. totalled EUR 4 thousand and EUR 13 thousand, respectively, and is recognised under “Other operating income” in the income statement for 2024. b. Operating leases as lessor At the end of 2024 the Company had contracted with tenants for the following minimum lease payments, based on the leases currently in force, without taking into account the charging of common expenses, future increases in the CPI or future contractual lease payment revisions (in thousands of euros). 37 Thousands of euros 2024 2023 Minimum lease payments: Within one year 246,255 224,801 1 to 5 years 516,115 509,716 Over 5 years 90,134 104,205 852,504 838,722 The detail of the operating lease and sublease payments recognised as an expense and as income, respectively, in 2024 is as follows: Thousands of euros 2024 2023 Minimum lease payments 245,211 227,678 Transfer of common expenses 54,758 53,683 299,969 281,361 The expenses passed on to the tenants recognised in the income statement for 2024 decreased the balance of “Other operating expenses” (Note 18.3). 7. Financial assets The detail of “Current and non-current financial investments” at 31 December 2024 and 2023 is as follows: Thousands of euros 12/31/2024 12/31/2023 Non-current financial investments: Equity instruments 11,151 9,915 Derivatives - — Guarantees given and prepayments 33,529 32,165 Loans to Group companies 373,530 471,374 Loans to third parties 123,099 107,624 541,309 621,078 Current financial investments: Equity instruments 18 18 Loans to Group companies 753,560 698,393 Loans to third parties 236 236 Trade and other receivables 42,701 31,224 Debt securities and other financial assets 7,062 1,581 803,577 731,452 1,344,886 1,352,530 7.1 Guarantees given and prepayments “Guarantees given and prepayments” includes mainly the guarantees arranged for lease agreements as collateral that the Company has deposited in the Housing Institute of each region, the balance of which at 31 December 2024 amounted to EUR 32,734 thousand (EUR 31,432 thousand at 31 December 2023), as well as the deposits amounting to EUR 286 thousand at that date (EUR 286 thousand at 31 December 2023). 38 7.2 Balances with Group companies (current and non-current) The Company has the following long-term and short-term balances with its subsidiaries at 31 December 2024 and 2023: 39 12/31/2024 Company Thousands of euros Long term credits short term credits Current Accounts – debit balances Dividends Ptes collection Long term debts short term debt Current accounts – credit balances Customers Suppliers Group companies: Merlin Retail, S.L.U. - 26,584 (15) - - - - 172 - Merlin Oficinas, S.L.U. - - (134) - - (5,467) - 245 - Merlin Logística, S.L.U. - 302,064 (15) - - - - 254 - Sevisur Logistica, S.A. - 10,197 (304) - - - - 45 - Parc Logistic de la Zona Franca, S.A. - 56,824 - - - - - 12,110 - Slack Tailwind Systems, S.L.U. - - - - - - - - - Slow Rise Spain, S.L.U. - - - - - - - - - Innovación Colaborativa, S.L.U. - 8,922 - - - - - 23 (228) Exhibitions Company, S.A.U. - 472 - - - - - - - Gescentesta, S.L.U. - - - - - (758) - - - La Vital Centro Comercial y de Ocio, S.L.U. - - (6) - - (7,942) - 24 - Desarrollo Urbano de Patraix, S.A.U. - 7,686 - - - - - - (32,007) Sadorma 2003, S.L.U. - - - - - (23,525) - - - Global Murex Iberia, S.L.U. - - - - - - - - - Varitelia Distribuciones, S.L.U - 160,516 - - - - - 71 - Global Carihuela Patrimonio Comercial, S.L.U - 64,196 18 - - - - 24 - MPCVI - Compra e Venda Imobiliária, S.A. - - - - - - - 16 - MPEP - Properties Escritórios Portugal, S.A. 21,325 549 - - - - - 8 - MP Monumental, S.A. - - - - - - - 44 - MP Torre A, S.A. 23,800 630 - - - - - 17 - VFX Logística, S.A. 33,160 3,415 - - - - - 68 - Promosete, Invest Inmobiliaria - - - - - - - 19 - Praça do Marqués - Serviços Auxiliares, S.A. - - - - - - - 22 - Torre Dos Oceanus Investimentos Inmobiliarios,S.A. - - - - - - - 14 - Forum Almada – Gestão Centro Comercial Sociedade Unipessoal, Lda. 225,000 6,266 66,249 - - - - 162 - Forum Almada II, S.A. - - - - - - - 86 - Torre Arts - Investimentos Imobiliarios, S.A. - - - - - - - 27 - Torre Fernao Magalhaes - Investimentos Imobiliarios, S.A. - - - 13,000 - - - 12 - Milos Asset Development, S.A. - 6,353 - - - - - - - Generous Profile Unipessoal, Lda 56,500 1,706 - - - - - - - Merlin Edged, S.L.U - 14,075 - - - - - - - Associates: - - - - - - - - - - - - - - - - - - Provitae Centros Asistenciales, S.L. - 1,262 - - - - - - - Pazo de Congresos de Vigo, S.A. - - - - - - - 340 - Paseo Comercial Carlos III, S.A. 13,056 - - - - - - - - Edged Spain, S.L. - - 3,050 - (4,461) - - 248 (5) Silicius Real Estate, S.L. - - - - - - - 49 (450) Renazca 689 - - - - - - - - Total 373,530 671,717 68,843 13,000 (4,461) (37,692) - 14,100 (32,690) 12/31/2023 40 Company Thousands of euros Long term credits short term credits Current Accounts – debit balances Dividends Ptes collection Long term debts short term debt Current accounts – credit balances Customers Suppliers Group companies: Merlin Retail, S.L.U. - 34,048 - - - - - 179 - Merlin Oficinas, S.L.U. - 2,298 - - - - - 251 (28) Merlin Logística, S.L.U. - 252,772 - 10,000 - - - 2,737 - Sevisur Logistica, S.A. - 11,721 - - - - - 43 - Parc Logistic de la Zona Franca, S.A. - 38,780 - - - - - 954 - Slack Tailwind Systems, S.L.U. - 140 - - - - - - - Slow Rise Spain, S.L.U. - 434 - - - - - 2 - Innovación Colaborativa, S.L.U. - 3,975 - - - - - 92 (200) Exhibitions Company, S.A.U. - - - - - (1,117) - - - Gescentesta, S.L.U. - - - - - (902) - - - La Vital Centro Comercial y de Ocio, S.L.U. - - - - - (8,397) - 23 - Desarrollo Urbano de Patraix, S.A.U. - 7,327 - - - - - - (32,006) Sadorma 2003, S.L.U. - - - - - (22,640) - - - Global Murex Iberia, S.L.U. 2,664 - - - - (2,556) - - - Varitelia Distribuciones, S.L.U - 190,898 - - - - - 67 - Global Carihuela Patrimonio Comercial, S.L.U - 51,233 - - - - - 29 - MPCVI - Compra e Venda Imobiliária, S.A. 15,454 394 - - - - - 16 - MPEP - Properties Escritórios Portugal, S.A. 21,325 393 - - - - - 7 - MP Monumental, S.A. 58,750 1,140 - - - - - 41 - MP Torre A, S.A. 22,000 527 - - - - - 7 - VFX Logística, S.A. 26,360 2,602 - - - - - 62 - Promosete, Invest Inmobiliaria 22,268 180 - - - - - 15 - Praça do Marqués - Serviços Auxiliares, S.A. - - - - - - - 20 - Torre Dos Oceanus Investimentos Inmobiliarios,S.A. 17,750 420 - - - - - 13 - Forum Almada – Gestão Centro Comercial Sociedade Unipessoal, Lda. 225,000 10,073 66,249 - - - - 173 - Forum Almada II, S.A. - - - - - - - 84 - Torre Arts - Investimentos Imobiliarios, S.A. - - - - - - - 24 - Torre Fernao Magalhaes - Investimentos Imobiliarios, S.A. - - - - - - - 11 - Milos Asset Development, S.A. - 7,531 - - - - - - - Generous Profile Unipessoal, Lda 56,500 2,110 - - - - - 24 - Merlin Edged, S.L.U - - - - - - - - - Associates: - - - - - - - - - Provitae Centros Asistenciales, S.L. - 1,198 - - - - - - - Pazo de Congresos de Vigo, S.A. - - - - - - - 340 - Paseo Comercial Carlos III, S.A. 2,619 - - - - - - 14 - Edged Spain, S.L. - - 1,950 - - - - 182 - Silicius Real Estate, S.L. - - - - (450) - - 49 (1,800) Renazca 684 - - - - - - 5 - Total 471,374 620,194 68,199 10,000 (450) (35,612) - 5,464 (34,034) 41 Long-term loans to Group companies and associates Long-term loans to Group companies and associates The main long-term loans granted by the Company to Group companies and associates recognised under “Loans to Group companies” were as follows: – In 2018, as a result of the purchase of Forum Almada-Gestao de Centro Comercial, Sociedade Uniperssoal, Lda, the Company subrogated to three primary loans that the subsidiary had with the previous shareholder for a total amount of EUR 276,708 thousand and with initial maturity set for 31 January 2022. These loans were extended for 7 years, at a new rate of 4.75%. During 2023, interest and principal were capitalised for an overall amount of EUR 56,880 thousand, through an increase in the cost of its share in the subsidiary. In 2024 an interest payment was made in the amount EUR 14,523 thousand. The outstanding principal balance at the 2024 year-end is EUR 225,000 thousand, with accrued and unpaid interest of EUR 6,266 thousand (EUR 225,000 thousand and EUR 10,073 thousand in 2023). – In 2019, as a result of the purchase of the asset owned by MPEP- Properties Escritórios Portugal, S.A., the Company granted a loan amounting to EUR 13,330 thousand, accruing fixed interest of 5% and maturing on 2 September 2029. In 2023, an interest payment was made in the amount of EUR 605 thousand. In 2024 an interest payment was made in the amount EUR 607 thousand was made. The outstanding balance of principal plus accrued and unpaid interest at the 2024 year-end amounts to EUR 14,751 thousand (EUR 14,630 thousand in 2023). – In 2016, as a result of the purchase of MPCVI-Compra e venda Imobiliária, S.A., the Company subrogated to a primary loan that the subsidiary had with the previous owner for an amount of EUR 11,800 thousand with maturity set for 1 June 2025. That loan accrued interest at a fixed annual rate of 5.98%. In 2024, MPCVI-Compra e venda Imobiliária, S.A. repaid the full amount of the principal and interest, and the loan was cancelled on 31 December 2024. – In 2018, as a result of the purchase of Torre Dos Oceanus Investimentos Imobiliários, S.A., the Company subrogated to the primary loan that the subsidiary had with the previous owner for an amount of EUR 17,294 thousand, with maturity set for 17 April 2022. That loan was extended, with its new maturity set for 17 April 2023, accruing interest at a fixed annual rate of 5%. In 2024, Torre Dos Oceanus Investimentos Imobiliários, S.A., repaid the full amount of the principal and interest, and the loan was cancelled on 31 December 2024. – In 2017, as a result of the purchase of Promosete Investimentos Inmobiliarios, S.A., the Company subrogated to two primary loans that the subsidiary had with the previous owner for an amount of EUR 17,833 thousand with maturity set for 31 January 2022, extended to 31 December 2029. That loan accrued interest at a fixed rate of 1.93%. In 2024, Promosete Investimentos Inmobiliarios, S.A., repaid the full amount of the principal and interest, and the loan was cancelled on 31 December 2024. – In 2016, as a result of the purchase of MP Monumental, S.A., the Company subrogated to the two primary loans that the subsidiary had with the previous shareholder for an overall amount of EUR 38,040 thousand. This loan matured on 31 January 2030, accruing interest at a rate of 4.75%. In 2024, MP Monumental, S.A, repaid the full amount of the principal and interest, and the loan was cancelled on 31 December 2024. – In 2016, as a result of the purchase of MP Torre, S.A., the Company subrogated to a primary loan that the subsidiary had with the previous shareholder for an amount of EUR 31,122 thousand. That loan accrued interest at an annual rate of 3%. In 2024, the capital of the loan was increased by EUR 1,800 thousand, with a balance at 31 December of EUR 28,800 thousand. Furthermore, in 2024, interest was paid in the amount of EUR 962 thousand, leaving an outstanding balance of accrued and unpaid interest at year-end of EUR 630 thousand. This loan matures on 31 January 2030, accruing interest at a rate of 4.75%. – At 31 December 2023, the Company held a participation loan with Global Murex Iberia, S.L.U. amounting to EUR 18,000 thousand. This loan matured in 2019, at which time an addendum was signed extending the maturity of the agreement until 1 September 2024, extended to 31 December 2025. At 31 December 2023, the outstanding balance of the loan was impaired in an amount of EUR 15,336 thousand. During 2024, prior to the winding up and liquidation of Global Murex Iberia, S.L.U., 42 (see Notes 1.2 and 9), the reversal of the impairment has been recorded and the existing participation loan at the end of 2023 has been capitalised in the amount of EUR 18,000 thousand. – In 2020, the Company signed a CAPEX three lines of credit with VFXIMO Investimentos Imobiliàrios, S.A., MP Monumental, S.A. and MPEP Properties Escritórios Portugal, S.A. for maximum amounts of EUR 26,360, 30,250 and 7,000 thousand, respectively. The maturity of these agreements is 31 December 2025, with an interest rate of 3%. In 2024, MP Monumental, S.A. repaid the full amount of principal and interest, and its credit line was cancelled as of 31 December 2024. The company VFXIMO Investimentos Imobiliàrios, S.A. maintains its credit line fully drawn down, with an outstanding balance at 31 December 2024 of principal and interest totalling EUR 29,755 thousand. In 2024, the Company formalised a new CAPEX credit line with VFXIMO Investimentos Imobiliàrios, S.A., for a maximum amount of EUR 70,000 thousand, maturing on 31 December 2034, accruing interest at 4% The outstanding balance of this credit line at 31 December 2024 for principal and interest amounted to a total of EUR 6,820 thousand. The company MPEP Properties Escritórios Portugal, S.A. maintains its credit line fully drawn down, with an outstanding balance as at 31 December 2024 for principal and interest totalling EUR 7,123,000.. – On 3 August 2022, the Company acquired 100% of the shares of Generous Profile Unipessoal Lda. Subsequently, on 12 August 2022, Generous Profile Unipessoal Lda acquired the Liberdade 195 office building, through a loan granted by the Company for EUR 56,500 thousand. On 16 October 2023, a new loan agreement was signed on the same principal, with the new maturity set for 31 December 2029 and accruing interest at a rate of 5.15%. In 2023, the corporate name of the subsidiary was changed to MPLIB – Investimentos Imobiliários, Unipessoal Lda. In 2024, this company paid interest amounting to EUR 3,112 thousand, with an outstanding balance at 31 December 2024 for principal and interest totalling EUR 58,206 thousand. – At 31 December 2024, the Company held three outstanding loans with the affiliated company Paseo Comercial Carlos III, S.A. (owner of a shopping centre in Madrid) for a total of EUR 13,056 thousand. This amount includes the combined amount of EUR 2,648 thousand, in principal and interest, of two initial loans granted on 27 July 2017. Both loans have an interest rate of 1.15%, maturing on 27 September 2027. In 2024, the Company took out a new loan with its investee, for a principal of EUR 10,000 thousand euros, with a balance at 31 December 2024 of EUR 10,407 thousand, including interest accrued during the year, which amounted to EUR 407 thousand. This loan accrues interest at a rate of 4.81%, maturing on 21 December 2028. – There are a number of commitments under the contracts between the Company, which owns a Data Centre currently in operation, and its associate Edged Spain, S.L. With regard to the commitment relating to future profits, the Company has a liability to this investee of EUR 4,461 thousand at 31 December 2024. Short-term loans and debts to Group companies and associates – As a result of the purchase of Forum Almada-Gestao de Centro Comercial, Sociedade Uniperssoal, Lda, the Company subrogated to a primary loan that the subsidiary had with the previous shareholder for a total current amount of EUR 98,410 thousand. That loan does not accrue interest. The main outstanding balance at the end of 2024 amounted to EUR 66,249 thousand. – At 31 December 2024, the Company has a balance with Edged Spain, S.L. amounting to EUR 3,050 thousand (EUR 1,950 thousand in 2023), corresponding to the contributions made to its investee. – Loan agreement between Group companies with Merlin Logistics, S.L.U. with a term of one year, with subsequent renewals permitted for similar periods, at an interest rate of 4.81% per year. In 2024, interest and principal were capitalised for an overall amount of EUR 61,538 thousand, with an outstanding balance of EUR 252,772 thousand at 31 December 2023. In 2024 there was a repayment of principal and interest totalling EUR 13,790 thousand. Likewise, an increase in capital of EUR 56,567 thousand was recorded, of which EUR 21,167 thousand resulted from the capitalisation of interest and the set-off of debts between the Company and its subsidiary (EUR 6,420 thousand and EUR 14,747 thousand respectively). At year-end 2024, the interest debt was settled, leaving an outstanding principal balance of EUR 302,064 thousand. – Loan with Global Carihuela Patrimonio Comercial, S.L.U., whose balance comes from the financing from the business combination with Metrovacesa executed in 2016 through current accounts with 43 Group companies. That loan has a term of one year and matures on 31 December 2025, with subsequent renewals permitted for similar periods, accruing an annual interest rate of 4.81%. In 2024, interest and principal repayments on the loan amounted to EUR 2,530 thousand and EUR 1,108 thousand, respectively. There was also an increase in the principal of EUR 13,880 thousand, of which EUR 780 thousand originated from the offsetting of debts between the Company and its subsidiary. The outstanding balance of principal plus accrued and unpaid interest at the 2024 year-end amounts to EUR 64,196 thousand (EUR 51,233 thousand in 2023). – Inter-Group loan agreement with Varitelia Distribuciones, S.L.U. with a term of one year, maturing on 31 December 2025, with subsequent renewals permitted for similar periods, at an interest rate of 4.81% per year. In 2024, the principal was capitalised in the amount of EUR 30,000 thousand, as the Company increased its stake in its subsidiary. In addition, principal and interest in the amount of EUR 4,040 thousand and EUR 6,114 thousand, respectively, were repaid. The principal of the loan has been increased by EUR 2,117 thousand through the offsetting of debts owed by the Company to its subsidiary. The outstanding balance of principal plus accrued and unpaid interest at the 2024 year-end amounts to EUR 160,516 thousand (EUR 190,898 thousand in 2023). – Inter-Group loan agreement with Sevisur Logistics, S.A. with a term of one year, maturing on 31 December 2025, with subsequent renewals permitted for similar periods, at an interest rate of 4.81% per year. In 2024 year, principal and interest were repaid totalling EUR 4,904 thousand and EUR 2.025 thousand, respectively, recording an increase in the principal of the loan of EUR 3,329 thousand, of which EUR 329 thousand originate from the offsetting of debts between the Company and its subsidiary. The outstanding balance of principal plus accrued and unpaid interest at the 2024 year-end amounts to EUR 10,197 thousand (EUR 11,721 thousand at 31 December 2023). – Loan agreement with Parc Logistic, Zona Franca, S.A. This agreement has a term of one year, maturing on 31 December 2025, with subsequent renewals permitted for similar periods, at an interest rate of 4.81% per year. Over the course of the 2024 financial year, interest and principal totalling EUR 1,870 thousand and EUR 8,408 thousand, respectively, were amortised. Of this principal reduction, EUR 5,055 thousand originated from the offsetting of debts between the Company and its subsidiary. Likewise, during the 2024 financial year, the principal of the loan was increased by EUR 26,100 thousand. The outstanding balance of principal plus accrued and unpaid interest at the 2024 year-end amounts to EUR 56,824 thousand (EUR 38,780 thousand at 31 December 2023). – In 2023, the Company recognised an impairment in the short-term loan with Innovación Collaborativa, S.L.U. for EUR 4,093 thousand. In 2024, this impairment was reversed after capitalising EUR 15,000 thousand of loan principal as an increase in the Company's stake in its subsidiary. In addition to this decrease, EUR 2,434 thousand of principal repayment was recorded, originating from the offsetting of debts between the Company and its subsidiary. The Company also extended the loan by an additional EUR 18,288 thousand, of which EUR 488 thousand originated from the capitalisation of interest. At year-end 2024, an outstanding balance remains of principal plus accrued and unpaid interest of EUR 8,922 thousand (EUR 8,068 thousand at 31 December 2023). – Loan agreement between Group companies with Merlin Retail, S.L.U. maturing on 31 December 2025, with subsequent renewals permitted for similar periods, accruing an annual interest rate of 4.81%. In 2024, interest and principal repayments of EUR 973 thousand and EUR 24,648 thousand, respectively, were made. In 2024, the principal of the loan was increased by EUR 16,997 thousand, of which EUR 5,497 thousand originated from the offsetting of debts between the Company and its subsidiary. The outstanding balance of accrued and unpaid interest at the 2024 year-end was EUR 26,584 thousand (EUR 34,048 thousand at 31 December 2023). – At year-end 2023, the Company held two short-term loans with Slack Taiwind Systems, S.L.U. and Slow Rise Spain, S.L.U. (wholly owned by the Company), two short-term loans for the amounts of EUR 140 thousand and EUR 434 thousand, respectively, after having increased, during the 2023 financial year, the cost of its stake in both subsidiaries by EUR 1,011 thousand and EUR 7,721 thousand, respectively. On 27 May 2024, the two companies were merged by absorption by Merlin Oficinas, S.L.U., with the debt that the two subsidiaries held with the Company being transferred as the principal increase to the loan of Merlin Oficinas, S.L.U., for a total amount of EUR 574 thousand. The absorbing subsidiary, for its part, has increased the principal of the loan it held with the Company (EUR 2,298 thousand at the end of the 2023 financial year), through successive drawdowns and the offsetting of the Company's debts with Merlin Oficinas, S.L.U. and with the merged subsidiaries, for a combined amount of EUR 51,292 thousand. Likewise, during the 2024 financial year, Merlin Oficinas, S.L.U. has 44 fully repaid the loan it held with the Company, after paying EUR 54,096 thousand in principal and interest accrued to date. – On 7 November 2023, the Company acquired 100% of the shares representing the share capital of the company Merlin Edged, S.L.U. (See Note 1.2). In 2024, a loan was formalised between the Company and its subsidiary for a principal amount of EUR 14,075, maturing on 31 December 2025 and accruing interest at a rate of 4.81%. – Debt contract with the company Sadorma, S.A., whose balance originated in the financing from the business combination with Metrovacesa, carried out in the 2016 financial year, through current accounts with Group companies. This loan has a duration of one year and matures on 31 December 2025, with the possibility of subsequent renewals for similar periods, accruing interest at an annual rate of 4.81%. The outstanding balance at the end of the 2024 financial year of principal plus accrued and unpaid interest amounts to EUR 23,525 thousand. At 31 December 2024, the Company had no recorded impairment losses on the loans granted to Group companies and associates except that held with The Exhibitions Company S.A., having recorded a provision of EUR 95 thousand in 2024. An impairment reversal of EUR 200 thousand on the receivables from Milos Asset Development, S.A. was also recorded. 7.3 Third-party loans (current and non-current) The loan granted to Desarrollos Urbanísticos Udra, S.A.U. amounting to EUR 86,397 thousand is recorded under the heading “Third-Party Loans” under non-current assets, with a market interest rate. In 2020, the first capitalisation of interest took place, amounting to EUR 1,423 thousand. In 2021, 2022, 2023 and 2024, further capitalisations took place for EUR 1,442 thousand, EUR 1,466 thousand, EUR 1,490 thousand, and EUR 1,519 thousand respectively, with the resulting principal balance of the loan at 31 December 2024 of EUR 93,737 thousand (EUR 92,219 thousand at the end of 2023). The outstanding interest amounted to EUR 323 and 318 thousand at 31 December 2024 and 2023, respectively. In relation to the aforementioned loan, the Company has guarantees from the creditor associated with 10% of the shares it holds in Crea Madrid Nuevo Norte, S.A. In addition, under this heading, rent linearisation, marketing costs and tenant installation costs amounting to EUR 28,981 thousand (EUR 15,030 thousand at the end of 2023) are recorded. 7.4 Trade and other receivables At 31 December 2024, the heading “Trade and other receivables” includes the following items: Thousands of euros 12/31/2024 12/31/2023 Current assets: Trade and notes receivable 18,327 15,766 Group companies and associates 14,100 5,464 Sundry accounts receivable 491 538 Employee receivables 184 184 Other receivables from public authorities (Note 14) 9,599 9,272 42,701 31,224 “Trade and notes receivable” in the balance sheet at 31 December 2024 mainly included the balances receivable from leasing investment property. In general these receivables are interest free and the terms of collection range from immediate payment on billing to payment at 30 days, while the average collection period is approximately 5 days (5 days in 2023). The Company periodically analyses the risk of insolvency of its accounts receivable by updating the related provision for impairment losses. The Company’s directors consider that the amount of trade and other receivables approximates their fair value. 45 Movement in the provision for impairment and bad debt in 2024 was as follows: Thousands of euros 2024 2023 Initial balance (7,088) — Charges for the year (188) (283) Reversals/amounts used 1,193 (6,805) Other — — Closing balance (6,083) (7,088) In 2024, losses on bad debts amounted to EUR 423 thousand (EUR 15 thousand in 2023). The majority of impaired receivables are overdue by more than six months. 8. Cash and cash equivalents “Cash and cash equivalents” includes the Company’s cash and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value. The balance of this heading of the accompanying balance sheet comprises mainly the current accounts in euros held by the Company at various financial institutions, which accrue interest at market rates, amounting to EUR 1,393,594 thousand (EUR 339,922 thousand in 2023). At 31 December 2024 , there pledged balances in the amount of EUR 2,000 thousand. The interest earned in this regard in 2024 amounted to EUR 34,723 thousand and is recognised under “Other finance Income” in the accompanying income statement (EUR 7,147 thousand in 2023). 9. Non-current investments in Group companies and associates The breakdown of and changes in the balance of “Equity instruments” at 2024 and 2023 year-end is as follows: 46 2024 Company Euros Balance 12/31/2023 Additions Retirement due to spin- of Additions by spin-of Deterioratio n Retirement Balance 12/31/2024 Group Companies: Merlin Retail, S.L.U. 390,432 - - - - - 390,432 Merlin Oficinas, S.L.U. 824,488 - - 8,738 - - 833,226 Merlin Logística, S.L.U. 353,842 - - - - - 353,842 Sevisur Logistica, S.A. 37,629 - - - - - 37,629 Parc Logistic de la Zona Franca, S.A. 118,310 - - - - - 118,310 Slack Tailwind Systems, S.L.U. 940 - (1,014) - 74 - - Slow Rise Spain, S.L.U. 7,724 - (7,724) - - - - Innovación Colaborativa, S.L.U. - 15,000 - - (9,853) - 5,147 Exhibitions Company, S.A.U. 1,066 - - - (1,066) - - Gescentesta, S.L.U. 3 - - - - - 3 Metroparque - - - - - - - La Vital Centro Comercial y de Ocio, S.L.U. 56,788 - - - - - 56,788 Desarrollo Urbano de Patraix, S.A.U. 24,636 - - - (357) - 24,279 Sadorma 2003, S.L.U. 20,696 - - - 3,454 - 24,150 Varitelia Distribuciones, S.L.U 1,947 30,000 - - (736) - 31,211 Global Carihuela Patrimonio Comercial, S.L.U 20,580 - - - (14,329) - 6,251 MPCVI - Compra e Venda Imobiliária, S.A. 6,418 - - - - - 6,418 MPEP - Properties Escritórios Portugal, S.A. 1,085 - - - - - 1,085 MP Monumental, S.A. 41,570 - - - - - 41,570 MP Torre A, S.A. 20,101 1,500 - - - - 21,601 VFXIMO Investimentos Imobiliàrios, S.A. 30,182 20,200 - - - - 50,382 Promosete, Invest Inmobiliaria 10,386 - - - - - 10,386 Praça do Marqués - Serviços Auxiliares, S.A. 56,359 - - - - - 56,359 Torre Dos Oceanus Investimentos Inmobiliarios,S.A. 15,912 - - - - - 15,912 Forum Almada – Gestão Centro Comercial Sociedade Unipessoal, Lda. 89,454 - - - - - 89,454 Torre Arts - Investimentos Imobiliarios, S.A. 80,281 - - - - - 80,281 Torre Fernao Magalhaes - Investimentos Imobiliarios, S.A. 26,055 - - - - (13,000) 13,055 Milos Asset Development, S.A. - 1,600 - - (646) - 954 MPLIB – Investimentos Imobiliários, Unipessoal Lda. 52,690 - - - 4,118 - 56,808 Merlin Edged, S.L.U 3 - - - - - 3 Global Murex Iberia, S.L.U. - 2,664 - - - (2,664) - Associates: Moregal Hotels, S.L. 1,583 - - - (1) - 1,582 Provitae Centros Asistenciales, S.L. 2,320 - - - (64) - 2,256 Paseo Comercial Carlos III, S.A. 25,668 - - - - - 25,668 Centro Intermodal de Logística, S.A. 95,688 - - - - - 95,688 Parking del Palau, S.A.II., S.L.U. 872 - - - 66 - 938 Crea Madrid Nuevo Norte, S.A. 175,269 40,002 - - (658) - 214,613 G36, Development, S.A. 2 - - - - - 2 Edged Spain, S.L. 1 - - - - - 1 Silicius Real Estate, S.L. 88,572 - - - - - 88,572 HCG Levante, S.L - 1,070 - - - - 1,070 Total 2,679,552 112,036 (8,738) 8,738 (19,998) (15,664) 2,755,926 47 2023 Company Euros Balance 12/31/2022 Additions Retirement due to spin- of Additions by spin-of Deterioratio n Others Balance 12/31/2023 Group Companies: Merlin Retail, S.L.U. 251,408 - - 139,025 - - 390,433 Merlin Oficinas, S.L.U. 771,345 - - 53,143 - - 824,488 Merlin Logística, S.L.U. 292,304 61,538 - - - - 353,842 Sevisur Logistica, S.A. 37,629 - - - - - 37,629 Parc Logistic de la Zona Franca, S.A. 118,310 - - - - - 118,310 Slack Tailwind Systems, S.L.U. - 1,011 - - (71) - 940 Slow Rise Spain, S.L.U. 3 7,721 - - - - 7,724 Innovación Colaborativa, S.L.U. - - - - - - - Exhibitions Company, S.A.U. 2,224 - - - (1,158) - 1,066 Gescentesta, S.L.U. 3 - - - - - 3 Metroparque 231,557 - (231,557) - - - - La Vital Centro Comercial y de Ocio, S.L.U. 56,788 - - - - - 56,788 Desarrollo Urbano de Patraix, S.A.U. 24,977 - - - (341) - 24,636 Sadorma 2003, S.L.U. 19,089 - - - 1,608 - 20,697 Varitelia Distribuciones, S.L.U 22,702 - - - (20,755) - 1,947 Global Carihuela Patrimonio Comercial, S.L.U 9,240 - - - 11,339 - 20,579 MPCVI - Compra e Venda Imobiliária, S.A. 6,418 - - - - - 6,418 MPEP - Properties Escritórios Portugal, S.A. 1,085 - - - - - 1,085 MP Monumental, S.A. 22,648 18,922 - - - - 41,570 MP Torre A, S.A. 10,686 9,415 - - - - 20,101 VFXIMO Investimentos Imobiliàrios, S.A. 22,736 3,200 - - 2,417 1,828 30,181 Promosete, Invest Inmobiliaria 10,386 - - - - - 10,386 Praça do Marqués - Serviços Auxiliares, S.A. 56,359 - - - - - 56,359 Torre Dos Oceanus Investimentos Inmobiliarios,S.A. 15,912 - - - - - 15,912 Forum Almada – Gestão Centro Comercial Sociedade Unipessoal, Lda. 32,574 56,880 - - - - 89,454 Torre Arts - Investimentos Imobiliarios, S.A. 80,281 - - - - - 80,281 Torre Fernao Magalhaes - Investimentos Imobiliarios, S.A. 26,055 - - - - - 26,055 Milos Asset Development, S.A. 2 - - - (2) - - MPLIB – Investimentos Imobiliários, Unipessoal Lda. 56,252 - - - (3,562) - 52,690 Merlin Edged, S.L.U - 3 - - - - 3 Associates: Moregal Hotels, S.L. - 1,585 - - (2) - 1,583 Provitae Centros Asistenciales, S.L. 3,316 - - - (995) - 2,321 Paseo Comercial Carlos III, S.A. 25,668 - - - - - 25,668 Centro Intermodal de Logística, S.A. 95,688 - - - - - 95,688 Parking del Palau, S.A.II., S.L.U. 1,084 - - - (213) - 871 Crea Madrid Nuevo Norte, S.A. 172,793 3,040 - - (565) - 175,268 G36, Development, S.A. 3 - - - - - 3 Edged Spain, S.L. - - - - 1 - 1 Silicius Real Estate, S.L. 87,018 1,554 - - - - 88,572 Total 2,564,543 164,869 (231,557) 192,168 (12,299) 1,828 2,679,552 In compliance with section 155 of the Corporate Enterprises Act, the Company reported the holdings that exceed 10% of share capital in the companies described in the table above. The most significant transactions executed in 2024 are as follows: – In 2024, the Company increased the cost of its stake in the subsidiary Innovación Colaborativa, S.L.U., through the partial capitalisation of the loan granted to it, amounting to EUR 15,000 thousand (see Note 7). 48 – In 2024, the Company increased the cost of its stake in the subsidiary Varitelia Distribuciones, S.L.U., through the partial capitalisation of the loan granted to it, amounting to EUR 30,000 thousand (see Note 7). – In 2024, the Company increased the cost of its stake in the subsidiary Milos Asset Development, S.A., through the partial capitalisation of the loan granted to it, amounting to EUR 1,600 thousand. – On 27 May 2024, the companies Slack Tailwind Systems, S.L.U. and Slow Rise Spain, S.L.U. were merged by absorption by Merlin Oficinas, S.L.U., all of them 100% owned by the Company (see Note 7). – On 27 November 2024, the General Meeting of Global Murex Iberia, S.L. agreed to wind up and liquidate the company, 100% owned by the Company (see Note 7). – On 17 December 2024, the Company acquired 5.84% of the shares representing the share capital of HCG Levante S.L. for EUR 1,070 thousand. This company owns land for tertiary use in the city of Valencia. – During 2024, the investee Crea Madrid Nuevo Norte recorded an addition of EUR 40,002 thousand, corresponding to the capital increase subscribed by the Company. – During 2024, there was an increase in the cost of the Company's interest in the subsidiary VFXIMO Investimentos Imobiliàrios, S.A. amounting to EUR 20,200 thousand, as ancillary benefits to its equity. – During 2024, a share premium of EUR 13,000 thousand was distributed by the subsidiary Torre Fernao Magalhaes - Investimentos Imobiliarios, S.A., reducing the cost of the Company's shareholding. The most significant transactions executed in 2023 are as follows: - On 27 July 2023, a deed was executed effecting the total split-up of the branch of activity of Metroparque, S.A.U., allocating it to the already existing companies Merlin Oficinas, S.L.U. and Merlin Retail, S.L.U., 100% owned by the Company. This involved the transfer en bloc by universal succession of the equity of the Split Company to each of its branches, which would be terminated by winding it up without liquidation in favour of the Beneficiary Companies, distributing the assets in accordance with the branch of activity performed by them. The additions due to split-up were recognised as a higher cost of the Company’s share in the beneficiary companies, and that amount was reduced in the deferred tax liability generated in the total split-up of Metrovacesa (See Note 1.2). - During 2023, the Company increased the cost of its share in the subsidiary Merlin Logística, S.L. by partially capitalising the loan granted to it, in the amount of EUR 61,538 thousand. - During 2023, the Company increased the cost of its share in the subsidiary Slack Tailwind Systems, S.L.U. by partially capitalising the loan granted to it, in the amount of EUR 1,011 thousand. In 2023, the Company recognised an impairment in the share in the amount of EUR 71 thousand. - During 2023, the Company increased the cost of its share in the subsidiary Slow Rise Spain, S.L.U. by partially capitalising the loan granted to it, in the amount of EUR 7,721 thousand. - In 2023, the Company recognised an impairment in its share in the subsidiary Varitelia Distribuciones, S.L.U. in the amount of EUR 20,755 thousand. - The Company reversed the accumulated impairment in its share in the subsidiary Global Carihuela Patrimonio Comercial, S.L.U. in the amount of EUR 11,339 thousand. - During 2023, the Company increased the cost of its share in the Portuguese subsidiary MP Monumental, S.A. by capitalising the interest and principal (EUR 9,422 and EUR 9,500 thousand, respectively) of the loan granted to it in the amount of EUR 18,922 thousand. - During 2023, the Company extended the share in the equity of the Portuguese subsidiary MP Torre A, S.A. by capitalising interest and principal (EUR 293 and EUR 9,122 thousand, respectively) of the loan granted to it in the amount of EUR 9,415 thousand. 49 - During 2023, the Company increased the cost of its share in the Portuguese Subsidiary VFXIMO Investimentos Imobiliàrios, S.A. in the amount of EUR 3,200 thousand through shareholder contributions to the subsidiary’s equity. Additionally, it recognised an increase in the cost of its share in it in the amount of EUR 1,828 thousand, as a result of the adjustment to the purchase price, due to tax contingencies envisaged in the sale and purchase agreement. The Company recognised a reversal of the provision for impairment of its share in the amount of EUR 2,417 thousand. - During 2023, the Company increased the cost of its share in the Portuguese Subsidiary Forum Almada – Gestão Centro Comercial Sociedade Unipessoal, Lda. by capitalising interest and principal (EUR 5,172 and 51,708 thousand, respectively) of the loan granted to it in the amount of EUR 56,880 thousand. - In 2023, the Company recognised an impairment in its share in the subsidiary MPLIB – Investimentos Imobiliários in the amount of EUR 3,562 thousand. - On 13 January 2023, 7.32% of the shares of Moregal Hotels, S.L. were acquired for EUR 1,585 thousand. - In 2023, the Company participated in the increase of the share capital of the investee Crea Madrid Nuevo Norte, S.A., acquiring 10,114 shares, with a cost of EUR 3,040 thousand. At 31 December 2024, the Company had a 14.6% shareholding. - In 2023, the Company increased its share in Silicius Real Estate, SOCIMI, S.A. to 17.91% (previously 17.80%) due to the distribution of a dividend by promissory notes convertible into shares for an amount of EUR 1,554 thousand. At 31 December 2023, the Company held a stake in Silicius Real Estate SOCIMI, S,A, equivalent to 17.80% of the share capital. As part of the terms and conditions agreed with Silicius Real Estate SOCIMI, S,A at the time of entry into the Company's capital, certain conditions were included in relation to the shares received: On the fifth anniversary of the asset contribution, established in May 2025: • Silicius Real Estate SOCIMI, S.A. has the option to proceed with the purchase of the shares at a price per share equivalent to the net asset value (NAV) per share available at the aforementioned date increased by 30%. • If Silicius Real Estate SOCIMI, S.A. does not exercise the purchase option, Merlin will have the right to request the redemption of the interest through the return in kind of certain pre-selected assets. • If the Board of Silicius Real Estate SOCIMI, S.A. is not satisfied with the selection of assets made by Merlin, it will be obliged to purchase or redeem in cash from Merlin the Liquid B shares at the issue price (including par value and premium) at which they were issued. The aforementioned option is valued by Merlin on a periodic basis and is presented as a liability derivative, in case it could result in a negative adjustment to the recoverable value of the aforementioned shareholding (See Note 12). The directors annually assess the existence of signs of impairment on the holdings above and concluded that there are no further impairments at 31 December 2024. To determine whether the shares in Group companies and associates have become impaired, the proportional part of equity of the investees, adjusted by any unrealised gains and goodwill at the valuation date, was considered to be the best evidence of the recoverable amount, which were mainly identified based on third- party valuations of those assets. In 2024, impairment was identified for a total of EUR 27,710 thousand, mainly related to the shares held in Global Carihuela Patrimonio Comercial, S.L.U,, Innovación Colaborativa, S.L.U. and Exhibitions Company, S.A.U. Similarly, recorded impairments amounting to EUR 7,712 thousand were reversed, mainly related to the shares held in Imobiliários, Unipessoal Lda. y Sadorma 2003, S.L.U. The most significant information in relation to investments in Group companies and associates at 2024 and 2023 year-end is detailed in Appendix I. 50 10. Equity and shareholder’s equity 10.1 Share capital and share premium The detail of and changes in equity are presented in the statement of changes in equity. Share capital At 31 December 2024, the share capital of Merlin Properties SOCIMI, S.A., amounted to EUR 563,725 thousand, represented by 563,724,899 fully subscribed and paid shares of EUR 1 par value each, all of which are of the same class and confer the holders the same rights. On 23 July 2024, the Board of Directors of the Company approved a capital increase through the issuance of up to 93,954,149 new ordinary shares, representing approximately 20% of the share capital, of the same class and series as the then outstanding shares. The capital increase was to be made through cash contributions with no pre-emptive rights and by way of an accelerated private placement to qualified investors only. The placement process described above was completed on 24 July 2024 under the following conditions: – Issue of 93,954,149 shares with a par value of EUR 1 each, of the same class and series as the existing shares in circulation. – Cash amount of the capital increase: EUR 920,750,660. – The issue price was EUR 9.80 per share, of which EUR 1.00 represented the nominal value and EUR 8.80 represented the share premium. The new shares were admitted to trading on the Madrid, Barcelona, Bilbao and Valencia stock exchanges on 25 July 2024 and on the Lisbon stock exchange on 29 July 2024. All the Company's shares can be publicly traded and are listed on the Madrid, Barcelona, Bilbao and Valencia and Lisbon Stock Exchanges. The market price of the Parent’s shares at 31 December 2024 and the average market price for the fourth quarter amounted to EUR 10.06 and EUR 8.72 per share, respectively. At 31 December 2024, based on information extracted from the CNMV, in relation to the provisions of Royal Decree 1362/2007, of 19 October and Circular 2/2007, of 19 December, the shareholders with significant holdings in the share capital of Merlin Properties SOCIMI, S.A., both direct and indirect, in excess of 3% of the share capital, are the following based on public information: Shares % of share capital Direct Indirect Total Banco Santander, S.A. 112,958,071 26,072,122 139,030,193 24.660% Nortia Capital Investment Holding, S.L. 46,045,299 - 46,045,299 8.170% BlackRock, INC - 29,105,117 29,105,117 5.160% The information on Banco Santander and Nortia Capital Investment Holding, S.L.) was obtained from the Company's Register of Members at the end of 2024. Share premium The Consolidated Text of the Corporate Enterprises Act expressly permits the use of the share premium to increase capital and establishes no specific restrictions as to its use. This reserve is unrestricted so long as its allocation does not lower equity to below the amount of share capital. As a result of the capital increase described above, the amount of the share premium was increased by EUR 826,796 thousand. 51 On 9 May 2024, the General Meeting approved the distribution of an interim dividend charged to the “share premium” in the amount of EUR 108,505 thousand. 10.2. Reserves Legal reserve The legal reserve will be established in accordance with section 274 of the Consolidated Text of the Corporate Enterprises Act, which stipulates, in all cases, that 10% of net profit for each year must be transferred to the legal reserve until the balance of this reserve reaches at least 20% of the share capital. This reserve cannot be distributed, and if it is used to offset losses, in the event no other reserves are available for this purpose, it must be restored with future profits. At 31 December 2024, the Company had not yet reached the legally required minimum established in the revised text of the Corporate Enterprises Act. The legal reserve of companies which have chosen to avail themselves of the special tax regime established in Law 11/2009, of 26 October, regulating listed companies investing in the property market (REITs), must not exceed 20% of share capital. The articles of association of these companies may not establish any other type of restricted reserves. Merger reserves The mergers carried out in 2017 generated positive merger reserves of EUR 1,629 thousand. As a result of the merger by absorption of Testa Inmuebles en Renta SOCIMI, S.A. with the Company in 2016, this transaction generated negative merger reserves in the amount of EUR 308,131 thousand. Other reserves During 2024, the movement in “Other reserves” is mainly due to the expenses related to the capital increase carried out in that financial year, amounting to EUR 21,606 thousand. The item “Other reserves” includes the amount of the undistributed profit arising from the transfer of properties and shares or participations, as referred to in section 2(1) of Spanish Law 11/2009, of 26 October, regulating REITs, carried out after the periods referred to in section 3(3) of the aforementioned Law. This amount corresponds to the undistributed profits from the sale of the subsidiary Tree Inversiones Inmobiliarias SOCIMI, S.A. in 2022, and must be reinvested in other properties or interests used to fulfil the parent company's main corporate purpose within three years from the date of the transfer. At the end of 2024, this reinvestment obligation had been fully met. In this regard, the company obtained a binding tax consultation confirming the criteria applied. 10.3 Treasury shares At 31 December 2024, the Company held treasury shares amounting to EUR 14,450 thousand. The changes in 2024 were as follows: Number of Shares Thousands of euros Balance at 1 January 2023 1,536,184 17,166 Additions 83,106 689 Disposals (220,166) (2,445) Balance at 31 December 2023 1,399,124 15,410 Additions 29,471 59 Disposals (113,950) (1,019) Balance at 31 December 2024 1,314,645 14,450 52 The shareholders at the Annual General Meeting held on 27 April 2023 revoked the unused portion of the authorisation granted by the shareholders at the General Meeting of 10 April 2019 and authorised the acquisition of treasury shares by the Parent itself or by Group companies pursuant to section 146 et seq. of the Corporate Enterprises Act, complying with the requirements and restrictions established in current law during the five-year period. The disposals of 113,950 treasury shares (average cost of EUR 10.99 per share) relate mainly to the delivery of shares to employees as part of the flexible remuneration plan in the amount of EUR 1,019 thousand. And the sales made under the liquidity agreement that the Group has for securities listed on the Lisbon Stock Exchange. That liquidity agreement made net sales of 8,142 shares (EUR 59 thousand) in 2024. At 31 December 2024, the Parent held treasury shares representing 0.233% of its share capital. 10.4 Valuation adjustments This heading of the statement of financial position includes changes in the value of financial derivatives designated as cash flow hedges, as well as that corresponding to financial assets through profit and loss. Movement in this heading in 2024 was as follows : Thousands of euros Balance at 31 December 2022 12,798 Changes in the fair value of hedges in 2023 (22,273) Changes in the fair value of “Financial assets through profit and loss” - Balance at 31 December 2023 (9,475) Changes in the fair value of hedges in 2024 (8,574) Changes in the fair value of “Financial assets through profit and loss” - Balance at 31 December 2024 (18,049) The balance at year-end 2023 relates to the assessment of the interest rate hedges that the Company took out in 2024 and 2023 to cover the new syndicated mortgage financing for April 2023 to July 2030 (see Note 11). 11. Current and non-current financial liabilities The detail of current and non-current liabilities at 31 December 2024 and 2023 is as follows (in thousands of euros): 53 Thousands of euros 2024 2023 Non-current: Measured at amortised cost Syndicated loan 665,000 665,000 Syndicated loan arrangement expenses (2,983) (3,889) Total syndicated loan 662,017 661,111 Mortgage loan 499,063 350,000 Non-mortgage loan 145,581 127,880 Arrangement costs of the revolving loan facility and unsecured loan (6,064) (5,325) Total other loans 638,580 472,555 Debentures and bonds 2,800,000 3,300,000 Debenture issue expenses (18,955) (16,663) Total debentures and bonds 2,781,045 3,283,337 Total amortised cost 4,081,642 4,417,003 Measured at fair value () Interest rate derivative financial instruments 18,049 9,475 Total at fair value 18,049 9,475 Total non-current 4,099,691 4,426,478 Current: Measured at amortised cost Syndicated loan 900 1,144 Debentures and bonds 621,654 20,966 Non-mortgage loan 298 291 Mortgage loan 2,462 1,103 Revolving credit facility 511 525 Loan arrangement expenses (293) - Total amortised cost 625,532 24,029 Measured at fair value () Interest rate derivative financial instruments (258) (354) Total at fair value (258) (354) Total current 625,274 23,675 There is no material difference between the carrying amount and the fair value of financial liabilities at amortised cost. The Company does not have any confirming contracts at 31 December 2024. The detail of the Parent’s credit rating is as follows: Agency Rating Outlook Last Review Previous Standard & Poor´s BBB+ Stable 26/03/2024 BBB Positive Moody´s Baa1 Stable 02/10/2024 Baa2 Positive Both ratings agencies have upgraded the Company's credit rating in 2024. 11.1 Loans The detail of loans at 31 December 2024 and 2023 is as follows (in thousands of euros): 54 12/31/2024 Initial loan / Limit Debt arrangement expenses Long term Short term Short-term interest Syndicated loan 665,000 (2,983) 665,000 - 900 Revolving credit facilities 740,000 (3,181) - - 510 Non-mortgage loan 202,904 (226) 145,581 - 298 Mortgage loan 570,000 (2,657) 499,063 656 1,806 Total 2,177,904 (9,047) 1,309,644 656 3,514 12/31/2023 Initial loan / Limit Debt arrangement expenses Long term Short term Short-term interest Syndicated loan 665,000 (3,889) 665,000 - 1,144 Revolving credit facilities 740,000 (3,191) - - 525 Non-mortgage loan 220,225 (282) 127,880 - 291 Mortgage loan 350,000 (1,852) 350,000 - 1,103 Total 1,975,225 (9,214) 1,142,880 - 3,063 Syndicated loans and revolving credit facilities On 18 November 2022, the Company arranged a new senior syndicated loan for EUR 600 million with the possibility of being drawn down before 24 April 2023 for the redemption of the bond maturing in 2023. This facility will have a maturity of 5 years from its drawdown date and will accrue a market rate of interest of EURIBOR plus 130 basis points. Until the facility is drawn down, a fee of 26 basis points will be applied for the undrawn balance. On 20 April 2023, the Company drew down this facility in full. Furthermore, on that date, a novation agreement was executed in relation to the senior syndicated loan including a Tranche B corresponding to a revolving credit line in the amount of EUR 700 million. This new credit line has a maturity of 5 years with the possibility of two optional one-year extensions. The revolving credit line accrues an interest rate of EURIBOR + 100 basis points and includes a cost adjustment mechanism based on four sustainability criteria. On 18 July 2023, the novation of the syndicated loan and credit line was signed. The senior syndicated loan increased to EUR 665 million with the incorporation of the amounts of the bilateral loans of Kutxabank and Unicaja outlined in the following heading. Additionally, the limit on the credit line was increased to EUR 740 million. At the end of December 2024, this line had not been drawn down. On 16 July 2024, this credit line was extended until 20 April 2029. These facilities have the same commitment to maintain certain coverage ratios as the Company bonds and the Banco Sabadell and European Investment Bank facilities described below. These ratios are defined as the ratio between the value of the assets and the outstanding debt (“Loan to Value”), the ratio between the Group's revenue and the debt service (“ICR”) and the ratio between assets and debt, both without mortgage guarantee (“Unencumbered Ratio”). The Company’s directors have confirmed that these ratios were met at 31 December 2024 and do not expect that they will not be fulfilled in the coming years. Bilateral loans without mortgage security On 18 November 2022, the Company arranged a loan without mortgage security with Banco Sabadell for EUR 60 million, maturing in January 2028 and accruing a market rate of interest of EURIBOR + 120 basis points. 55 This facility includes commitments to maintain the coverage ratios described in the previous point. The Company’s directors have confirmed that these ratios were met at 31 December 2024 and do not expect that they will not be fulfilled in the coming years. On 31 March 2023, the Company arranged a mortgage-free loan with Kutxabank, S.A. for EUR 30 million maturing 5 years after its drawdown and accruing a market rate of EURIBOR + 130 basis points. Until the facility is drawn down, an undrawn balance fee of 26 basis points applies. On 20 April 2023, this facility was drawn down in full. On 24 April 2023, the Company arranged and drew down a mortgage-free loan with Unicaja Banco, S.A. for EUR 35 million, maturing 5 years after its drawdown and accruing a market rate of EURIBOR + 130 basis points. On 18 July 2023, both entities (Kutxabank, S.A. and Unicaja Banco, S.A.) assented the senior syndicated loan, becoming part of it. European Investment Bank loans On 20 December 2018, the Company formalised a loan without mortgage security with the European Investment Bank in an amount of EUR 51 million. On 4 November 2019, the Company formalised the second tranche of the loan without mortgage security with the European Investment Bank amounting to EUR 64 million, making EUR 115 million in total over the two tranches. This facility can be drawn down through several loans with a maturity of 10 years for each drawdown. This facility must be allocated to the development of logistics assets in the Castilla–La Mancha region. On 10 March 2020 and 26 October 2020, the Company drew down EUR 23.4 million and EUR 5.6 million corresponding to the first tranche of the facility. This facility accrues fixed interest at a rate of 60 basis points. On 20 December 2022, the Company had EUR 22 million and 358 basis points, meaning the first tranche of EUR 51 million was drawn down in full. On 20 December 2023, the Company drew down EUR 16.9 million accruing a fixed interest rate of 386 basis points. This loan corresponds to the first drawdown of the second tranche of EUR 64 million. On 7 November 2024, a new limit was set for the second tranche, from the initial EUR 64 million to EUR 46.7 million. On 18 December 2024, the Company drew down EUR 17.7 million of the second tranche mentioned in the previous paragraph accruing a fixed interest rate of 325.6 basis points. On 16 December 2021, the Company arranged a loan without mortgage security with the European Investment Bank in an amount of EUR 45.2 million and with 10-year maturity. This facility will be used to make investments in energy efficiency. At the year-end, this loan was not drawn down. These facilities include the commitments to maintain certain coverage ratios. These ratios are defined as the ratio between the value of the assets and the outstanding debt (“Loan to Value”), the ratio between the revenue of the Group and the debt service (“ICR”) and the ratio between assets and debt, both without mortgage guarantee (“Unencumbered Ratio”). The Company’s directors have confirmed that these ratios were met at 31 December 2024 and do not expect that they will not be fulfilled in the coming years. Mortgage loans On 27 July 2023, the Company arranged a loan with BBVA secured by a mortgage on the Torre Castellana. The loan is for EUR 180 million, with a term of 7 years, and accrues interest at a market rate of EURIBOR + 110 basis points. On 15 November 2023, the Company entered into a loan with Allianz secured by a mortgage on a portfolio of 4 office buildings in Madrid (three of them owned by the Company and one owned by a 100% owned investee). The loan is for EUR 170 million, with a term of 10 years, and accrues interest at a fixed rate of 4.523%. These facilities include commitments to maintain and comply with certain coverage ratios, such as the loan-to- value ratio between the ratio of the subsidiary's income and the debt service (ICR). The Company’s directors have confirmed that these ratios were met at 31 December 2024 and do not expect that they will not be fulfilled in the coming years. 56 Maturity of debt The details on the maturity of the amounts provided in these loans is as follows (in thousands of euros): Syndicated loan Non- mortgage loan Mortgage loan Total 2025 - - - 656 2026 - - - 750 2027 - - - 1,313 Over 3 years 665,000 145,581 350,000 1,307,581 665,000 145,581 350,000 1,310,300 None of the Company’s debt was denominated in non-euro currencies at 31 December 2024. The Company had undrawn credits and loans at 31 December 2024 with a number of financial institutions totalling EUR 797.3 million (EUR 832.3 million at 31 December 2024). There are no significant differences between the fair values and carrying amounts of the Company’s financial liabilities. The finance cost for interest on the loans and the revolving lines of credit totalled EUR 62,459 thousand in 2024 (EUR 34,280 thousand in 2023) and is recognised in the accompanying income statement for 2024. At 31 December 2024, the loan arrangement costs were recognised as a reduction in “Bank borrowings”. In 2024, the Company recognised EUR 2,033 thousand (EUR 3,798 thousand in 2023) associated with the debt under “Finance costs” in the accompanying income statement for 2024, having capitalised EUR 2,023 thousand in 2024. 11.2 Debenture issues On 12 May 2017, the Company subscribed a Euro Medium Term Notes (EMTN) issue programme of up to EUR 4,000 million, which will replace the original bond issue programme and its supplement subscribed on 06 April 2016 and 14 October 2016, respectively, for an overall maximum amount of EUR 2,700 million. On 18 May 2018, the Company extended that bond-issue scheme (Euro Medium Term Notes – EMTN) up to an amount of EUR 5,000 million. On 17 June 2020, the General Shareholders' Meeting approved the extension of this bond issuance program up to an amount of EUR 6,000 million, and the extension took place on 21 March 2021. Subsequently, on 4 August 2022, 11 May 2023 and 10 May 2024, the scheme was renewed for another year. On 1 June 2022, the Company received the approval of its bondholders to convert all of its bonds into green bonds in accordance with the Green Funding Framework published by the Group on 25 April 2022. The reclassification of the bonds to green bonds does not entail changes to any other features of the bonds, either regarding their terms and conditions, interest or maturities. In April 2024, the Group renewed the Green Funding Framework. On 30 June 2021, the Company issued a bond of EUR 500 million at 9 years at 99.196% of the nominal value and a coupon of 1.375%. These funds were used to pay the bond maturing in May 2022 early on 23 February 2022. On 25 April 2023, the Company repaid the bond corresponding to that maturity in the amount of EUR 742.8 million. On 2 February 2024, the Company increased the amount drawn down (tap) on the Bond maturing in September 2029 to 2.375% for an amount of EUR 100 million (implicit cost 3.93%). 57 The terms of the bonds issued by the Company are governed by and construed in accordance with English law and are listed on the Luxembourg Stock Exchange. In addition, the bond issuance scheme has the same guarantees and ratio performance obligations as the syndicated loan and the revolving credit facility. The terms of the bonds issued by the Company abide by UK laws and are traded on the Luxembourg Stock Exchange. The bond issue scheme has the same guarantees and ratio compliance obligations as the new syndicated loan and the revolving credit facility. At year-end 2024, the Company is compliant with the covenants in this agreement and the directors believe they will be met in 2025. 2024 The detail at 31 December 2024 and 2022 of the bonds issued by Company is as follows: Maturity Nominal value (Millions of euros) Coupon Listed price Return Market May 2025 600 1.750% MS +22 p.b. 2.84% Luxemburg November 2026 800 1.875% MS +50 p.b. 2.69% Luxemburg July 2027 500 2.375% MS +73 p.b. 2.91% Luxemburg September 2029 400 2.375% MS +81 p.b. 3.04% Luxemburg June 2030 500 1.375% MS +89 p.b. 3.14% Luxemburg December 2034 600 1.875% MS +128 p.b. 3.64% Luxemburg 3,400 2023 Maturity Nominal value (Millions of euros) Coupon Listed price Return Market May 2025 600 1.750% MS +82 p.b. 3.94% Luxemburg November 2026 800 1.875% MS +74 p.b. 3.32% Luxemburg July 2027 500 2.375% MS +105 p.b. 3.54% Luxemburg September 2029 300 2.375% MS +102 p.b. 3.44% Luxemburg June 2030 500 1.375% MS +176 p.b. 4.18% Luxemburg December 2034 600 1.875% MS +184 p.b. 4.35% Luxemburg 3,300 1.898% These bond issues include commitments to maintain certain coverage ratios. These ratios are defined as the ratio between the value of the assets and the outstanding debt (“Loan to Value”), the ratio between the Group's revenue and the debt service (“ICR”) and the ratio between assets and debt, both without mortgage guarantee (“Unencumbered Ratio”). The Company’s directors have confirmed that these ratios were met at 31 December 2024 and do not expect that they will not be fulfilled in the coming years. The finance cost for interest on the debenture issues amounted to EUR 64,799 thousand (EUR 67,755 thousand in 2023) and is recognised in the accompanying income statement for 2024. The accrued interest payable at 31 December 2024 amounted to EUR 21,654thousand (EUR 20,966 thousand in 2023). Debt arrangement expenses taken to the income statement in 2024 amounted to EUR5,391 thousand (EUR 4,119 thousand in 2023). 58 11.3 Interest rate derivatives In 2023 and 2022, the Group took out new interest rate hedges to cover the new syndicated facility for April 2023 to April 2028. The notional amount contracted was EUR 665 million at a fixed cost of 2.537%. In 2022, an interest rate hedge was contracted to cover Sabadell's mortgage-free loan until its maturity in January 2028 for a notional amount of EUR 60 million and a fixed cost of 2.512%. In 2023, an interest rate hedge was contracted to cover the BBVA mortgage-secured loan until its maturity in July 2023 for a notional amount of EUR 180 million at a fixed cost of 2.363%. In March 2024, the Group took out an interest rate hedge to cover the Caixabank mortgage-secured loan until its maturity in March 2034 for a notional amount of EUR 150 to EUR 135 million at a fixed cost of 2.598%. The detail of the financial instruments as of 31 December 2024 and 2022 is as follows (in thousands of euros): 2024 Thousands of euros Outstanding notional amount at each date Interest rate Interest contracted Fair Value Subsequent years 2024 2025 2026 2027 Syndicated (start 2023) 2.54% 10,958 665,000 665,000 665,000 665,000 665,000 Unsecured 2.512% 883 60,000 60,000 60,000 60,000 60,000 Mortgage loans 2.470% 6,208 329,719 329,063 328,313 327,000 325,500 18,049 1,054,719 1,054,063 1,053,313 1,052,000 1,050,500 2023 Thousands of euros Outstanding notional amount at each date Interest rate Interest contracted Fair Value Subsequent years 2023 2024 2025 2026 Syndicated (start 2023) — (7,546) 665,000 665,000 665,000 665,000 665,000 Unsecured 2.512% (563) 60,000 60,000 60,000 60,000 60,000 Mortgage loans 2.363% (1,012) 180,000 180,000 180,000 180,000 180,000 (9,121) 905,000 905,000 905,000 905,000 905,000 Thousands of euros Thousands of euros 12/31/2024 12/31/2023 Non-current Interest rate derivatives 18,049 9,475 Total non-current 18,049 9,475 Current Interest rate derivatives (258) (354) Total current (258) (354) 59 At 31 December 2024 and 2023, the impact for interest rate derivatives on liabilities and profit before tax of a 5% fluctuation in the estimated credit risk rate would be as follows: 2024 Thousands of euros Scenario Liabilities Equity Consolidated profit/(loss) before tax 5% rise in credit risk rate (21,499) 21,499 - 5% reduction in credit risk rate 22,181 (22,181) - 2023 Thousands of euros Scenario Liabilities Equity Consolidated profit/(loss) before tax 5% rise in credit risk rate (19,887) 19,887 - 5% reduction in credit risk rate 19,317 (19,317) - 60 12. Other current and non-current liabilities The detail of non-current and current liabilities at 31 December 2024 and 2023 is as follows: Thousands of euros 12/31/2024 12/31/2023 Non-current: Provisions 10,778 18,796 Other non-current liabilities 16,739 13,311 Guarantees and deposits received 49,886 47,828 77,403 79,935 Current: Other payables - — Other current liabilities 5,162 2,846 5,162 2,846 82,565 82,781 “Non-current provisions” mainly includes provisions for the risk assessment associated with a series of legal proceedings and third-party claims arising from the Company's activity, which have been recognised in accordance with the best existing estimates, as well as the provision corresponding to the variable remuneration that will be paid in the long term amounting to EUR 1,517 thousand (EUR 4,510 thousand in 2023). Additionally, the liabilities for tax debts on which there is uncertainty regarding their amount or maturity are recognised in the heading "Non-current provisions", and it is likely that the Company will have to pay out resources to cancel these obligations as a result of a present obligation. On 10 February 2022, the tax authorities informed the Company about the beginning of audits and investigations relating to corporate income tax, value added tax and withholding on account for various years. In this regard, and based on the best estimates of the tax assessments amounts and supplementary tax returns for the years subsequent to those inspected, in 2023 the Company recognised a provision of EUR 5,862 thousand under "Changes in provisions" in the accompanying income statement (see Notes 14.4 and 23). On 21 February 2024, the following Conformity Certificates were signed: • Corporate income tax for 2016 to 2019, under which an amount to be refunded to the Company of EUR 13,984 thousand was determined, comprising tax payable and late-payment interest. The above mentioned certificate recognises the effects of the ruling of 19 January 2024 of the Constitutional Court, which annulled certain provisions of Royal Decree-Law 3/2016 that had an impact on the taxable income for corporate income tax purposes for 2016 to 2019. • Value Added Tax for the years 2018 to 2019, under which an amount of EUR 799 thousand was determined to be paid to the Tax Agency by the Company, comprising tax payable and late payment interest. • Withholdings on account of non-resident income tax (IRNR) for 2018 to 2019, under which an amount of EUR 834 thousand was determined to be paid to the tax authorities by the Company, comprising tax payable and late payment interest. • Withholdings and payments on account on capital assets for 2018 and 2019, under which no amount was determined to be paid or refunded. On 2 April 2024, the Tax Agency made a net refund to the Company of the amounts relating to the aforementioned certificates. During 2024, the Company made a voluntary adjustment by filing supplementary VAT and non-resident income tax (IRNR - Impuesto sobre la Renta de No Residentes) self-assessments for the years 2020 to 2024. These self- 61 assessments resulted in an amount payable by the Company to the tax authorities of EUR 2,234 thousand, comprising tax payable and late-payment interest, after which the Company reversed the remaining amount of the provision recognised in 2023, amounting to EUR 1,834 thousand, which is recognised under the heading “Provisions” in the accompanying income statement. “Guarantees and deposits received” primarily comprise the amounts deposited by lessees to secure leases, which will be reimbursed at the end of the lease term. The amount included under “Other non-current liabilities” includes the estimated value of the resulting put option on the share in Silicius for EUR 13,739 thousand (EUR 10,311 thousand at 31 December 2023) (see Note 9). 13. Trade and other payables The detail of trade and other payables is as follows: Thousands of euros 12/31/2024 12/31/2023 Trade and other payables: Accounts Payables 45,309 42,557 Payable to suppliers, Group companies and associates 32,690 34,034 Sundry accounts payable 3,298 3,368 Remuneration payable 11,931 11,739 Other accounts payable to public authorities (see Note 14) 20,797 23,853 Advances from customers 3,001 900 117,026 116,451 The directors consider that the carrying amount of trade payables approximates their fair value. Information on the average period of payment to suppliers. Final Provision Two of Law 31/2014, of 3 December The information required by additional provision three of Spanish Law 18/2022, of 28 September, on creating and growing companies [Ley 18/2022, de 28 de septiembre, de creación y crecimiento de empresas] and Spanish Law 15/2010, of 5 July (amended by final provision two of Spanish Law 31/2014, of 3 December), prepared in accordance with the Spanish Accounting and Audit Institute (ICAC) Resolution of 29 January 2016 on the disclosures to be included in the notes to financial statements in relation to the average period of payment to suppliers in commercial transactions, is detailed below. Days 2024 2023 Average period of payment to suppliers 44 39 Ratio of transactions settled 44 39 Ratio of transactions not yet settled 45 36 62 Thousands of euros 2024 2023 Total payments made 204,187 252,107 Total payments outstanding 26,446 18,942 In accordance with the ICAC Resolution, the average period of payment to suppliers was calculated by taking into account the commercial transactions relating to the supply of goods or services for which payment has accrued in each year. For the sole purpose of the disclosures provided for in the Resolution, suppliers are considered to be the trade creditors for the supply of goods or services included in “Payable to suppliers” and “Sundry accounts payable” under current liabilities in the balance sheet and regardless of any financing due to the early collection of the supplier. “Average period of payment to suppliers” is taken to be the period that elapses from the delivery of the goods or the provision of the services by the supplier to the effective payment of the transaction. The monetary volume and number of invoices paid within the established legal period are detailed below. 2024 2023 Monetary volume (thousands of euros) 166,814 233,676 Percentage of total payments made 81.7% 92.7% Number of invoices 18,707 19,950 Percentage of total invoices 80.1% 80.6% The maximum legal payment period applicable to the Company in 2024 in accordance with Law 3/2004 of 29 December, establishing the measures to fight against default in commercial transactions is 60 days. 63 14. Tax situation The breakdown of the tax receivables and payables at 31 December 2024 and 2023 is as follows: Thousands of euros 12/31/2024 12/31/2023 Tax receivables: Non-current- Deferred tax assets 48,933 73,291 Current- VAT refundable 225 1,746 Other tax receivables 9,374 7,526 58,532 82,563 Tax payables: Non-current- Deferred tax liabilities 341,277 349,713 Current- VAT payable 462 4,754 Personal income tax withholdings payable 20,058 18,735 Payable to the Social Security 268 237 Deferred output VAT 9 127 362,074 373,566 14.1 Reconciliation of accounting profit, taxable profit and tax expense At 31 December 2024, the taxable profit was calculated as the accounting profit for the year. The reconciliation of the accounting profit, the taxable profit from corporation tax, the corporation tax payable or refundable, and the corporation tax expenses at 31 December 2024 and 2023 is as follows: 64 Thousands of euros 2024 2023 Accounting profit before tax 126,797 98,430 Temporary differences 36,664 19,993 Permanent differences (16,045) (15,805) Taxable profit prior to offsetting tax losses 147,416 102,618 Offset of tax losses (994) - Tax base 146,422 102,618 Tax base under the REIT regime 146,462 156,796 Tax base at the general tax rate — (54,178) Tax charge under the REIT regime (0%) - - Tax charge under the standard regime (25%) — (13,545) Adjustments to the tax charge - - Tax credit for reinvestment - - Tax credit for temporary measures - - Prepayments - — Corporation tax payable / (receivable) (7,235) Tax base under the REIT regime 146,462 156,796 Tax base at the general tax rate — (54,178) Tax charge under the REIT regime (0%) - - Tax charge under the standard regime (25%) - — Activated deductions - - Special charge - - Total current income tax expense - — Tax bases - - Deductions offset - - Offset of prior years’ corporation tax (9,883) - Other corporation tax adjustments (132) - Deferred tax asset adjustments - - Deferred tax liability adjustments 7,649 (820) Total deferred tax expense (2,366) (820) Total corporation tax expense (2,366) (820) The current tax expense recognised in 2024 relates mainly to the tax impact due to the sale of investment property whose portion of the margin has been taxed under the general regime. The permanent differences in 2024 mainly correspond to the amortisation of goodwill arising from the merger by absorption of Testa Inmobilia en Renta, SOCIMI, S.A., as well as various expenses and provisions not tax deductible in 2024. The temporary differences in 2024 correspond mainly to adjustments for differences between accounting and tax depreciation of the assets of Testa and Metrovacesa. The detail of the corporation tax (expense)/income at year-end 2024 and 2023 is as follows: Thousands of euros 2024 2023 Current tax: Continuing operations - — Deferred tax: Continuing operations (2,366) (820) Total tax (income)/expense (2,366) (820) 65 14.2 Deferred tax assets recognised The changes in 2024 and 2023 in the deferred tax assets recognised are as follows: Thousands of euros Total deferred tax assets at 31 December 2023 73,291 Offset of tax losses (18,162) Offset of deductions (6,196) Total deferred tax assets at 31 December 2024 48,933 Thousands of euros Total deferred tax assets at 31 December 2022 74,080 Offset of tax losses (1) Offset of deductions (788) Total deferred tax assets at 31 December 2023 73,291 On 10 January 2022, the Tax Agency notified the Company of the commencement of audits and investigations relating to Corporate Income Tax, Value Added Tax and withholdings on account for various years. On 21 February 2024, the conformity certificates were signed. The income tax assessment for 2016 to 2019 determined an amount to be refunded to the Company of EUR 13,984 thousand, comprising tax payable and late-payment interest. The above mentioned certificate recognises the effects of the ruling of 19 January 2024 of the Constitutional Court, which annulled certain provisions of Royal Decree-Law 3/2016 that had an impact on the taxable income for corporate income tax purposes for 2016 to 2019. The Company also filed supplementary income tax returns for the years 2021 to 2023. Based on the above, in 2024 the Company derecognised EUR 18,162 thousand of tax loss carryforwards and EUR 6,196 thousand of tax credits. The detail of the tax loss carryforwards at 31 December 2024 is as follows: Thousands of euros Recognised Tax credit Tax base Tax loss carryforwards: 2009 60,924 15,231 2010 1,650 413 2011 86,402 21,600 2019 1,201 300 2020 149 37 Total tax loss carryforwards 150,326 37,581 Other deferred taxes recognised 45,408 11,352 Total capitalised deferred tax assets 195,734 48,933 The “Other deferred taxes recognised” heading mainly includes the temporary differences caused by the limitation of the depreciation of the assets generated by the acquisition of the Testa subgroup and Metrovacesa and the tax deductions pending application mainly due to reinvestment. The deferred tax assets indicated above were recognised in the accompanying balance sheet because the Company’s directors considered that, based on their best estimate of the Company’s future earnings, including certain tax planning measures, it is probable that these assets will be recovered. As a result of the merger of Testa Inmuebles en Renta SOCIMI, S.A. and the property business of Metrovacesa, S.A., tax gains were generated arising from the difference between the values at which the assets were included in the financial statements and their tax bases. In accordance with the REIT regime, the Company will 66 pay tax on these gains when the property asset is sold. The directors estimate that the deferred tax assets detailed in the table above will be recovered when the property assets are sold, thus offsetting the aforementioned gains. The Company had unused tax deductions and credits at 31 December 2024 amounting to EUR 11,352 thousand (EUR 17,548 thousand in 2023), mainly due to the tax credits for reinvestment. Deferred tax assets not recognised The detail of tax assets not recognised at 31 December 2024 is as follows: Thousands of euros No recognised Tax base Tax loss carryforwards: 2019 2020 8,158 2023 54,174 Total tax loss carryforwards 62,332 14.3 Deferred tax liabilities The deferred tax liabilities mainly arose from the merger and the business combination executed in 2016 with Testa Inmuebles en Renta, SOCIMI, S.A. and the property business of Metrovacesa, S.A. and were caused by the differences existing between the book values and the tax values of the assets received in those transactions. The changes in “Deferred tax liabilities” at 31 December 2024 and 2023 were as follows: Thousands of euros Total deferred tax liabilities at 31 December 2023 349,713 Assest sales (8,436) Total deferred tax liabilities at 31 December 2024 341,277 Thousands of euros Total deferred tax liabilities at 31 December 2022 389,102 Corporate transactions (Notes 1.2 and 9) (39,389) Total deferred tax liabilities at 31 December 2023 349,713 As a result of the merger of Testa Inmuebles en Renta SOCIMI, S.A. and the property business of Metrovacesa, S.A., tax gains were generated arising from the difference between the values at which the assets were included in the financial statements and their tax bases. In accordance with the REIT regime, the Company will pay tax on these gains when the property asset is sold. A portion of these deferred tax assets has been derecognised as a result of the Metroparque demerger as described in Note 1.2. 67 14.4 Years open for review and tax audits Under current legislation, taxes cannot be deemed to have been definitively settled until the tax returns filed have been reviewed by the tax authorities or until the four-year statute of limitations has expired. At year-end 2024, the Company had open for review the 2020 to 2023 financial years for corporation tax, the 2021 to 2024 financial years for VAT and personal income tax and non-resident income tax withholdings, and the 2022 to 2025 financial years for the economic activities tax and property tax. The Company’s managing body considers that the tax returns for the aforementioned taxes have been filed correctly and, therefore, even in the event of discrepancies in the interpretation of current tax legislation in relation to the tax treatment afforded to certain transactions, the possible liabilities as might arise would not have a material effect on the accompanying financial statements. Also, Law 34/2015, of 21 September, partially amending Law 58/2003, of 17 December, on General Taxation establishes the right of the tax authorities to initiate a review and investigation procedure of the tax losses offset or carried forward or tax credits taken or carried forward, which will become statute barred after ten years from the day on which the regulatory period established for filing the tax return or self-assessment relating to the year or the tax period in which the right to offset the tax loss or to apply the tax credits arose. 15. Disclosure requirements arising from REIT status, Law 11/2009, amended by Law 16/2012 and Law 11/2021 a. Reserves arising from the years prior to applying the tax regime established in Law 11/2009, as amended by Law 16/2012, of 27 December. There are no reserves from years prior to the Company’s adherence to the REIT regime, taking into consideration the Company was incorporated in 2014, the year in which it requested to apply the aforementioned tax regime. a. Reserves arising from the years in which the tax regime established in this Act was applied, distinguishing between the portion that comes from income subject to a 0%, 15% and 19% tax rate and that which is taxed at the general tax rate, where applicable. The following changes in reserves occurred in 2014 to 2024: Thousands of euros Subject to a 0% tax rate Subject to a 19% tax rate Subject to a 15% tax rate Subject to the general tax rate Not Subject 2024 2023 352,551 - - - - 2022 8,961 - - - - 2021 (25,467) - - - - 2020 17,940 - - - - 2019 20,857 - - - - 2018 11,453 - - - (38) 2017 11,897 - - - 1,628 2016 2,986 - - - (532,767) 2015 (54,543) - - - - In 2023, among others, EUR 332,961 thousand in reserves generated at 0% were generated from the undistributed profit arising from the transfer of properties and shares referred to in section 2(1) of Law 11/2009, of 26 October, regulating REITs. That amount must be reinvested in other properties or shares assigned to performance of the Company’s main corporate purpose within three years of the transfer date. That amount corresponds to the undistributed profits from the divestment of the share in Tree Inversiones Inmobiliarias, SOCIMI, S.A. in 2022 and must be reinvested in other properties or shares assigned to performance of the Company’s main corporate purpose within three years of the transfer date. 68 c. Dividends distributed charged to profit for each year in which the tax regime established in this Act was applied, distinguishing between the portion that comes from income subject to a 0%, 15% or 19% tax rate and that which is taxed at the general tax rate, where applicable. Thousands of euros Subject to a 0% tax rate Subject to a 19% tax rate Subject to a 15% tax rate Subject to the general tax rate 2024 2023 207,023 - - - 2022 444,815 - - - 2021 70,033 - - - 2020 68,519 - - - 2019 185,857 - - 1,275 2018 16,235 - - 86,911 2017 102,687 - - 38,081 2016 3,789 - - 57,808 2015 25,035 - - - () Based on the distribution year, including final dividends generated in the previous year. d. In the case of dividends distributed charged to reserves, indicate the year relating to the reserves applied and whether they were taxed at a rate of 0%, 15%, 19% or at the general tax rate. No dividends were distributed charged to reserves in 2014 to 2024 e. Date of the resolution to distribute dividends referred to in letters c) and d) above. On 26 November 2024, the Company’s Board approved the distribution of an interim dividend charged to the profits for 2023 in the amount of EUR 101,234 thousand. On 9 May 2024, the General Meeting approved the distribution of a final dividend charged to the profits for 2023 in the amount of 3,937 thousand and the distribution of a dividend charged to the share premium in the amount of EUR 108,805 thousand. On 16 November 2023, the Board of Directors of the Company approved the distribution of an interim dividend charged to profit for 2023 in the amount of EUR 93,673 thousand. On 27 April 2023, the General Meeting approved the distribution of a final dividend charged to the profits for 2023 in the amount of EUR 113,350 thousand. On 10 November 2022, the Company’s Board approved the distribution of a dividend of EUR 93,646 thousand charged to profit for 2022. On 28 July 2022, the Company’s Board of Directors approved the distribution of an interim dividend charged to profit for 2022 in the amount of EUR 351,169 thousand. On 4 May 2022, the General Shareholders Meeting approved the distribution of a dividend charged to the “share premium” reserve in the amount of EUR 106,497 thousand, and the distribution of a dividend charged to profit for 2021 for EUR 10,614 thousand. On 11 November 2021, the General Shareholders Meeting approved the distribution of a dividend of EUR 70,033 thousand charged to the profit for 2021. On 17 June 2020, the Company’s General Shareholders Meeting approved the distribution of an interim dividend charged to profit for 2019 in the amount of EUR 68,518 thousand. That dividend was paid on 8 July 2020. 69 On 10 October 2019, the Company’s Board of Directors resolved to distribute of an interim dividend charged to profit for 2019 in the amount of EUR 92,939 thousand. This interim dividend was paid to shareholders on 28 October 2019. On 10 April 2019, the Company’s General Shareholders Meeting approved the distribution of an interim dividend charged to profit for 2018 in the amount of EUR 94,193 thousand. That dividend was paid on 7 May 2019. On 9 October 2018, the Company’s Board of Directors resolved to distribute of an interim dividend charged to profit for 2018 in the amount of EUR 93,522 thousand. This interim dividend was paid to shareholders on 25 October 2018. On 7 May 2018, the Company’s General Shareholders Meeting approved the distribution of an interim dividend charged to profit for 2017 in the amount of EUR 9,624 thousand. That dividend was paid on 25 May 2018. On 9 October 2017, the Company’s Board of Directors resolved to distribute a dividend in the amount of EUR 93,457 thousand as an interim dividend charged to profit for 2017. This interim dividend was paid to shareholders on 25 October 2017. The General Shareholders’ Meeting held on 26 April 2017 approved the distribution of a dividend out of 2016 profit of EUR 47,311 thousand, which was paid to shareholders on 18 May 2017. On 19 October 2016, the Company’s Board of Directors resolved to distribute EUR 59,759 thousand as an interim dividend with a charge to profit for 2016. This interim dividend was paid to shareholders on 25 October 2016. The General Shareholders’ Meeting held on 6 April 2016 approved the distribution of a dividend out of 2015 profit of EUR 1,838 thousand, which was paid to shareholders on 27 April 2016. On 14 October 2015, the Company’s Board of Directors resolved to distribute EUR 25,035 thousand as an interim dividend with a charge to profit for 2015. This interim dividend was paid to shareholders on 28 October 2015. f. Acquisition date of the properties intended for lease and the shares in the share capital of companies referred to in section 2.1 of this Act. Detail in Appendix II g. Identify the assets included in the calculation of the 80% referred to in section 3.1 of this Law. 100% of the Company’s investment property is made up of urban properties intended for lease, as well as land intended for property development and subsequent lease. Accordingly, the majority of the shares in companies complies with the requirements of section 2.1 of Law 11/2009. These assets are identified in Appendix II, which is an integral part of these financial statements. The Company’s consolidated balance sheet of the Merlin Group for REIT purposes complies with the minimum investment requirement of 80%. h. Reserves arising from the years in which the special tax regime established in this Act was applied, that were drawn down in the tax period, that were not used for distribution or to offset losses, identifying the year relating to these reserves. No reserves were provisioned in financial years 2014 to 2024. 70 16. Balances and transactions with related parties 16.1 Transactions with Group companies and associates The detail of the transactions with Group companies and associates in 2024 and 2023 is as follows: Society 2024 2023 Importe neto de la cifra de negocios 142,282 174,486 Sales Dividends 81,895 114,412 Merlin Retail, SLU 12,146 13,330 Merlin Oficinas, SLU 26,502 22,377 Merlin Logística, SLU 9,616 43,842 Sevisur Logística, SA 3,857 3,906 Parc Logístic Zona Franca, SA 925 La Vital Centro Comercial, SL 4,123 2,896 Global Carihuela PC, SLU 12,244 1,371 MPCVI Investim. Imobil., SA 188 198 MP Monumental, SA 12 214 Promosete Invest. Imobil., SA 1,221 837 Praça do Marquês Serv.Aux, SA 841 1,982 Torre dos Oceanus-Invest. Imob 838 827 Torre Arts-Invest. Imob., SA 2,267 2,097 Torre Fernão Magalhães-Invest. 1,193 673 Centro Intermodal de Logística, S.A. 5,922 7,880 MP Torre A, SA 404 Metroparque, SA 8,808 Varitelia Distribuciones, SLU 1,150 Parking del Palau, SA 66 Silicius Real Estate SOCIMI, S.A. 1,554 Income from Loans to Group and Associated Companies 48,049 49,826 Merlin Retail, SLU 1,159 2,494 Merlin Oficinas, SLU 506 456 Merlin Logística, SLU 12,935 12,769 Sevisur Logística, SA 474 691 Parc Logístic Zona Franca, SA 2,222 775 Innovación Colaborativa, SLU 603 301 The Exhibitions Company, SAU 14 - Desarrollo Urbano de Patraix, SA 357 339 Varitelia Distribuciones, SLU 7,656 8,992 Global Carihuela PC, SLU 2,720 2,392 MPCVI Investim. Imobil., SA 467 937 MPEP Properties Escritórios 939 936 MP Monumental, SA 1,128 2,250 MP Torre A, SA 1,066 1,039 71 VFXIMO Invest. Imobil., SA 813 791 Promosete Invest. Imobil., SA 214 430 Torre dos Oceanus-Invest. Imob 500 962 Forum Almada-Gestao Centr Com 10,717 10,507 Milos Asset Development, SLU 365 404 MPLIB Investimentos Imobiliarios, Unipessoal Lda. 2,709 1,946 Provitae Centros Asistenc., SL 42 39 Pº Comer. Carlos III, SA 436 29 Renazca, SA 7 7 Slack Tailwind Systems, SL - 61 Slow Rise Spain, SL 279 Rental activity 6,900 4,797 Innovación Colaborativa, SLU 6,867 4,769 Parking del Palau, SA 33 28 Service activity 5,439 5,453 Merlin Retail, SLU 702 796 Merlin Oficinas, SLU 977 961 Merlin Logística, SLU 1,047 984 Sevisur Logística, SA 178 173 Parc Logístic Zona Franca, SA 296 279 La Vital Centro Comercial, SL 99 95 Varitelia Distribuciones, SLU 260 257 Global Carihuela PC, SLU 99 100 MPCVI Investim. Imobil., SA 34 32 MPEP Properties Escritórios 29 28 MP Monumental, SA 150 144 MP Torre A, SA 12 41 VFXIMO Invest. Imobil., SA 39 48 Promosete Invest. Imobil., SA 71 62 Praça do Marquês Serv.Aux, SA 86 82 Torre dos Oceanus-Invest. Imob 56 55 Forum Almada-Gestao Centr Com 596 586 Forum Almada II, SA 346 346 Torre Arts-Invest. Imob., SA 106 100 Torre Fernão Magalhães-Invest. 48 46 MPLIB Investimentos Imobiliarios, Unipessoal Lda. 74 97 Edged Spain, SLU 66 66 Pº Comer. Carlos III, SA 50 50 Renazca, SA 18 18 Slow Rise Spain, SL 7 Other operating income 68 14 Edged Spain, SLU 55 - Centro Intermodal de Logística, S.A. 2 3 72 Silicius Real Estate SOCIMI, S.A. 11 11 Other operating expenses 64 974 Revenues from re-invoicing of expenses 1,553 1,276 Innovación Colaborativa, SLU 1,553 1,276 External services (1,489) (297) Merlin Properties SOCIMI, SA (12) - Innovación Colaborativa, SLU (760) (176) Testa Residencial SOCIMI, SA - - Edged Spain, SLU (617) The Exhibitions Company, SAU (1) Varitelia Distribuciones, SLU (85) (84) Parking del Palau, SA (14) (14) Merlin Oficinas, SLU (23) Tributes (5) (5) Varitelia Distribuciones, SLU (5) (5) Financial expenses (1,936) (3,132) Merlin Oficinas, SLU (256) (487) The Exhibitions Company, SAU (9) (60) Gescentesta, SLU (44) (49) La Vital Centro Comercial, SL (422) (371) Sadorma 2003, SL (1,092) (1,041) Global Murex Iberia, SL (113) (118) Parc Logístic Zona Franca, SA - (16) Merlin Retail, SLU (990) Total 140,474 172,341 At 31 December 2024 and 2023, the Company had entered into services agreements with some companies of its Group, by virtue of which it earned income for the provision of services amounting to EUR 5,439 thousand and EUR 5,453 thousand, respectively. These services were recognised under “Revenue” in the accompanying income statement. 73 16.2 Balances with Group companies and associates The amount of the balances in the balance sheet at 31 December 2024 detailed in Note 7 is as follows: Thousands of euros 12/31/2024 12/31/2023 Long-term loans to Group companies and associates 373,530 471,373,654 Current loans to Group companies and associates 671,717 620,194,097 Other current financial assets 81,843 78,199,066 Non-current payables to Group companies and associates (4,461) (450,000) Current payables to Group companies and associates (37,692) (35,612,251) Receivable from Group companies and associates 14,100 5,464,245 Payable to suppliers, Group companies and associates (32,690) (34,033,865) 16.3 Balances and transactions with related parties The detail of the balances and transactions with related parties is as follows: Thousands of euros 2024 2023 Assets Liabilities Assets Liabilities Balances: Banco Santander, S.A. (a) () 23,396 100,000 47,332 100,000 Banco Santander, S.A. (a) - - - Banco Santander, S.A. (b) - 373 - 389 Pº Comercial Carlos III (d) 13,056 - 2,619 - Provitae Centros Asistenciales, S.L. (e) 1,262 - 1,198 - Silicius Real Estate SOCIMI, S.A. (f) - 450 - 2,250 Edged Spain, S.L.U. (g) 3,803 4,461 2,856 404 Total 41,517 105,284 54,005 103,043 () The liability corresponds to the part of the corporate credit line corresponding to Banco Santander, undrawn at 31.12.2024 and 31.12.2023. 2024 2023 Income Expenses Income Expenses Transactions: Banco Santander, S.A (a, b y c) 2,015 1,748 3,304 496 Pº Comercial Carlos III (d) 436 — 29 — Provitae Centros Asistenciales, S.L. (e) 42 — 39 — Edged Spain, S.L.U. (g) — 837 — 609 Total 2,493 2,585 3,372 1,105 During 2024, only the shareholder Banco Santander, S.A. held the status of significant shareholder pursuant to the regulations in force. (a) Balances with Banco Santander Group At 31 December 2024, the Company had bank balances deposited at Banco Santander, S.A. in the amount of EUR 23,936 thousand. At 31 December 2024, the Company had no loans contracted with shareholders except for a corporate line of credit in the amount of EUR 740 million, which was undrawn at 31 December 2024, in which Banco Santander, S.A. participated with EUR 100 million. 74 In 2024, the finance costs incurred in transactions with Santander, S.A. amounted to EUR 382 thousand, which included EUR 16 thousand in guarantee fees and EUR 11 thousand in current account management costs. The Company also has guarantee lines granted by the shareholder Banco Santander, S.A. in the amount of EUR 3,069 thousand. (b) Transactions with Banco Santander Group In 2024, the Company recognised financial income of EUR 1,300 thousand as remuneration for current accounts. In 2024, the Company had 3 leases with Banco Santander Group in different buildings. The duration of the leases covers a period of up to 2 years, and in 2024 they generated of EUR 715 thousand, including income from leasing, as well as parking spaces and transfers of ATM space in shopping centres. The securities deposited by the tenants amounted to EUR 373 thousand. In addition, the Company has contracted General Shareholders Meeting and shareholder registration organisation services amounting to EUR 80 thousand, in addition to listing agent services on the Euronext Lisboa stock exchange, dividend agent and register of members management services for EUR 36 thousand. (c) Company share capital increase On 24 July 2024, MERLIN Properties S.A. SOCIMI carried out a capital increase by means of an accelerated placement against cash contributions and excluding pre-emptive rights through the issue of 93,954,149 ordinary shares of MERLIN, each with a par value of one euro (EUR 1), of the same class and series as the shares currently existing and outstanding (see Note 10.1). As a result of their performance, the following transactions with significant shareholders have taken place: • Participation of Banco Santander, S.A. as Agent Bank (EUR 50 thousand; 0.005% of the issue) and as Co-Global Coordinator, the amount of the fee invoiced in this transaction being EUR 1,250 thousand, of which EUR 50 thousand are raised as agent bank commission and EUR 1,200 thousand as basic commission and discretionary commission. • Banco Santander, S.A., direct or indirect holder of approximately 24.6% of MERLIN's share capital, subscribed 23,094,534 new shares, thus maintaining its stake in MERLIN's share capital after the Capital Increase (at the same 24.6%). • Nortia Capital Investment Holding, S.L., which directly or indirectly holds approximately 8.17% of MERLIN's share capital, subscribed 7,674,216 new shares, thus maintaining its interest in MERLIN's share capital after the Capital Increase (at the same 8.17%). The above related-party transactions related to the capital increase were reported by the Audit and Control Committee to the Board of Directors on 22 July 2024. These reports, in compliance with current legislation, were notified to the CNMV (registration numbers 29819 and 29820) and published on the corporate website: https://ir.merlinproperties.com/regulador/operaciones-vinculadas/. Transactions with Directors In addition, the capital increase of 24 July 2024 in MERLIN Properties S.A. SOCIMI resulted in the following transaction involving the Company's Directors: • The pre-emptive subscription by the Chief Executive Officer, holding approximately 0.14% of the share capital, and by the Managing Director, holding approximately 0.13% of the share capital, who subscribed to 131,893 and 124,392 new shares respectively in the capital increase, thus maintaining their shareholding in MERLIN's share capital after the capital increase. (d) Paseo Comercial Carlos III, S.A. At 31 December 2024, the Company has three loans outstanding for a combined amount of EUR 13,056 thousand with its associate Paseo Comercial Carlos III, S.A. (owner of a shopping centre in Madrid) (see Note 7). 75 This amount includes EUR 2,539 thousand corresponding to two initial loans granted on 27 July 2020, which were EUR 2,539 thousand at 31 December 2023. During 2024, the Company entered into a new loan for an additional EUR 10,000 thousand. This additional facility is part of the guarantee requested from the shareholders by the company's financing entities. Furthermore, the amount as at 31 December 2024 includes EUR 517 thousand of accrued interest (EUR 80 thousand as at 31 December 2023), and the financial income for the year 2024 is EUR 436 thousand. (e) Provitae Centros Asistenciales, S.L. At 31 December 2024, the Company had a loan in force in the amount of EUR 1,262 thousand (EUR 1,198 thousand at 31 December 2023), which included EUR 224 thousand of interest accrued (EUR 182 thousand and 2021), granted on 10 January 2002 to the associate Provitae Centro Asistenciales, S.L., which holds land in Villajoyosa. The financial income for the year 2024 is EUR 42 thousand. (f) Silicius Real Estate SOCIMI, S.A. The Company also had outstanding payment obligations of EUR 450 thousand, recognised as “Other current and non-current financial liabilities” in the attached balance sheet. (g) Edged Spain, S.L.U. Under the contracts between the Company, owner of a Data Center currently in operation, and Edged Spain, S.L., there are a number of commitments based on the overheads, turnover and future utility of these Data Centers, for which the Company has recorded in 2024, EUR 837 thousand of expenses, EUR 3,803 thousand of assets and EUR 4,461 thousand of liabilities, respectively (EUR 609 thousand, EUR 2,856 thousand and EUR 404 thousand in 2023). Dividends and other profits distributed to related parties (thousands of euros) 2024 2023 Significant shareholders 52,086 50,290 Banco Santander, S.A. 52,086 50,290 Directors and executives 2,966 3,002 Directors 1,757 1,806 Executives 1,209 1,196 Total 55,052 53,292 17. Information relating to the Company’s Board of Directors and senior executives The Company's directors and the parties related thereto did not have any conflicts of interest that had to be reported in accordance with article 229 of the revised text of the Spanish Capital Companies Act. Directors' compensation and other benefits At 31 December 2024 and 2023, salaries, per diem attendance fees and any other type of compensation paid to members of the Company’s bodies totalled EUR 6,791 thousand and EUR 6,239 thousand, as detailed below: 76 Thousands of euros 2024 2023 Fixed and variable remuneration 6,492 6,010 Statutory compensation - - Termination benefits - - Per diems 288 218 Life and health insurance 11 11 6,791 6,239 In addition to the above amounts, in 2024, the executive directors received total payments of EUR 2,561 thousand corresponding to variable remuneration for 2023 and deferred variable remuneration for 2021 and 2022. At 31 December 2024, outstanding accrued amounts associated with the variable remuneration for 2022 to 2024, amounting to EUR 4,380 thousand, were maintained, of which EUR 1,879 thousand were recognised under “Non-current provisions” and EUR 2,501 thousand under “Trade and other accounts payable” in the accompanying balance sheet. With regard to the ‘golden parachute’ clauses for executive directors of the Company in the event of dismissal or takeover, these clauses provide for compensation that represented a total commitment of EUR 8,989 thousand as of 31 December 2024. The breakdown, by board member, of the amounts disclosed above is as follows: Thousands of euros 2024 2023 Director: Remuneration of board members José Luis de Mora Gil-Gallardo () Chairman - Proprietary director 280 - Javier García Carranza Benjumea () Chairman - Proprietary director 170 - Ismael Clemente Orrego CEO 2,663 2,686 Miguel Ollero Barrera Executive director 1,832 1,843 María Luisa Jordá Castro Independent director 183 187 Ana García Fau Independent director 211 207 George Donald Johnston Independent director 189 187 Fernando Ortiz Vaamonde Independent director 148 142 Juan María Aguirre Gonzalo Independent director 183 177 Pilar Cavero Mestre Independent director 158 152 Francisca Ortega Hernández Agero Proprietary director 171 167 Emilio Novela Berlín Independent director 193 185 María Ana Forner Beltrán Proprietary director — 78 Ignacio Gil-Casares Satrústegui Proprietary director 51 142 Juan Antonio Alcaraz García Proprietary director 148 75 Inès Archer Toper Independent director 103 — Julia Bayón Pedraza Proprietary director 97 — 6,780 6,228 () On 16 May 2024, the Board of Directors of the Company accepted and approved the resignation of Mr Javier García Carranza Benjumea as a member of the Board of Directors. At the same meeting, following a favourable report from the Appointments and Remuneration Committee, the Board of Directors of the Company unanimously approved the appointment by co-option of Mr José Luis de Mora Gil-Gallardo as a director representing the shareholder Banco Santander, S.A. and his appointment as Chairman of the Board of Directors of the Company to fill the existing vacancy. 77 The term of office of director Ignacio Gil Casares Satrústegui expired in 2024. At the Ordinary General Meeting of Shareholders held on 9 May 2024, the appointment of Inès Archer Toper as an independent director and Julia Bayón Pedraza as a nominee director representing the shareholder Banco Santander, S.A. was approved, bringing the number of members of the Company's Board of Directors to 14. The Company has granted no advances, loans or guarantees to any of its directors. The Company's directors are covered by the “Corporate Third-Party Liability Insurance Policies for Directors and Executives” taken out by the Parent to cover possible damages that may be claimed, and that are evidenced as a result of a management error committed by its directors or executives, as well as those of its subsidiaries, in discharging their duties. The premium amounted to an annual total of EUR 272 thousand (EUR 320 thousand in 2023). Remuneration and other benefits for senior management The remuneration of the Company's senior management, including the Head of Internal Audit, excluding those who are simultaneously members of the Board of Directors (whose remuneration is disclosed above) in 2024 and 2023, is summarised as follows: 2024 Thousands of euros Number of persons Fixed and variable remuneration Other remuneration Total 9 5,856 35 5,891 2023 Thousands of euros Number of persons Fixed and variable remuneration Other remuneration Total 9 5,800 32 5,832 In addition to the above amounts, in 2024 senior management received payments for a total amount of EUR 3,736 thousand corresponding the variable remuneration for 2023 and the deferred variable remuneration for 2021 and 2022. At 31 December 2024, outstanding accrued amounts associated with the variable remuneration for 2022 to 2024, amounting to EUR 6,236 thousand, were maintained, of which EUR 2,631 thousand were recognised under “Non-current provisions” and EUR 3,605 thousand under “Trade and other accounts payable” in the accompanying balance sheet. 2022-24 Incentive Plan The General Meeting held on 4 May 2022 approved a long-term remuneration plan consisting in the delivery of 3,491,767 shares ordinary shares of the Company (representing 0.74% of the Company’s share capital at the date of approval), aimed at the management team and other important members of the Group's workforce (the 2022-24 Incentive Plan). The 2022-24 Incentive Plan consisted in a single cycle with a target measurement period of 3 years, beginning on 1 January 2022 and ending on 31 December 2024. If the targets are met, the shares will be delivered in 2025, once the corresponding financial statements for 2024 have been prepared and audited. All shares delivered under the 2022-24 Incentive Plan to executive directors will be subject to a retention period of 2 years. The maximum number of shares assigned to the executive directors is 1,088,082 shares. The specific number of shares of the Company that, within the maximum established, will be delivered to the Beneficiaries of the 2022-24 Incentive Plan at the end of the Plan will be conditional on the compliance with the following objectives related to the creation of value for shareholders and sustainability: 78 Metrics Definition Weighting Absolute TSR Relative TSR Absolute Total Shareholder Return (TSR) is the return on the share taking into account the cumulative change in the Company’s listed share price, including dividends and other similar items received by shareholders in 2022-2024. The Relative TSR measures the evolution of the TSR of the Company's share in 2022-2024, in relation to the TSR experienced in the FTSE EPRA Nareit Developed Europe Index during the same period. 50% EPRA NTA 31/12/24 + Dividends (2022-2024) / share The EPRA NTA is calculated based on the Company's consolidated equity and by adjusting certain items following the recommendations of the EPRA. Moreover, the dividends paid and other similar items received by the shareholder during the targets measurement period (2022, 2023 and 2024) are taken into account. 35% Net carbon emissions Level of reduction of the Company's CO2 emissions at 31 December 2024, compared with 31 December 2021, calculated for the comparable asset portfolio over which the Company has operational control (perimeter of the Company's pathway to net zero). 10% Environment and society Progress on initiatives linked to improving the environment and society. The economic and social impact of the Company's assets on local communities in which these assets are based and the various stakeholders will be assessed. 5% In 2024, the Group recognised an expense in the amount of EUR 2,804 thousand (EUR 2,804 thousand in 2023), corresponding to the accrued portion of the 2022-24 Incentive Plan, with a balancing entry in reserves. The total amount provisioned during the term of the LTIP 2022-2024 was EUR 8,413 thousand, recorded under reserves. Transactions outside the normal course of business or not on an arm’s length basis performed by the managing body Apart from the transactions with related parties described in Note 16, the Company’s managing body did not carry out any transactions with the Company or Group companies outside the normal course of business or were not on an arm’s length basis in 2024. Stakes held by directors and their affiliates in other companies The Company's directors and the parties related to them did not have any conflicts of interest that had to be reported in accordance with section 229 of the revised text of the Corporate Enterprises Act. 79 18. Revenue and expenses 18.1 Ordinary revenue The distribution of revenue is as follows: Thousands of euros 2024 2023 Lease income 245,211 227,678 Revenue from services provided 6,313 7,132 Dividend income 81,895 114,412 Interest income 48,047 49,826 Total revenue 381,466 399,048 The breakdown, by type of activity and geographical market, of rental income for 2024 is as follows: Thousands of euros 2024 % Branch of activity Offices 201,333 81% Shopping centres 40,082 16% Logistics 8,604 3% Data Centers 653 - Other 43 -% 250,715 100% Thousands of euros 2024 % Autonomous regions: Madrid 172,238 69% Catalonia 39,074 16% Andalusia 13,191 5% Valencia 10,237 4% Castilla-La Mancha 5,105 2% Rest of Spain 10,870 4% 250,715 100% 80 18.2 Staff costs The detail of the remuneration expenses for employees at 31 December 2024 and 2023 is as follows: Thousands of euros 2024 2023 Wages, salaries and similar expenses 26,093 24,635 Compensation - 283 Other employee benefit costs and taxes 3,285 3,224 Long-term and extraordinary incentive plan 2,804 2,804 32,182 30,946 18.3 Other operating expenses The detail of this heading of the accompanying 2024 and 2023 income statements is as follows: Thousands of euros 2024 2023 Non-recoverable expenses of leased properties 27,467 25,835 Outside services - Professional services 13,612 11,405 Insurance 558 668 Costs associated with asset acquisitions and sales, financial investments and financing 6,887 2,103 Utilities and other outside services 3,275 2,673 Taxes other than income tax 3,064 48 Losses on, impairment of and change in allowances for trade receivables (583) (645) Total other operating expenses 54,280 42,087 18.4 Finance income and finance costs The detail of the balances of these headings in the income statement is as follows: 81 Thousands of euros 2024 2023 Interest on credits and others 4,689 2,845 Interest on deposits and current accounts 34,724 6,149 Finance income 39,413 8,994 Interest on loans and other credits (126,425) (108,893) Finance expenses (126,425) (108,893) Changes in fair value of financial instruments (3,427) (9,891) Impairment and other losses - — Gains/(losses) on disposals (1,001) 5 Gains/(losses) on disposals of financial instruments (1,001) 5 Net finance expense (91,440) (109,785) “Interest on loans and other credits” includes the repayment of the debt arrangement expenses in the amount of EUR 7,424 thousand for 2024 (EUR 7,917 thousand for 2023), applying the effective interest method to the financial debt. In 2024, the financial income generated by short-term bank deposits amounted to EUR 24,723 thousand (EUR 6,149 thousand in 2023), 82 19. Information on employees The average number of employees in the Company, by professional category, in 2024 and 2023 was as follows: Average number of employees 2024 2023 Professional category: Management 28 26 Middle management 65 61 Other professionals 103 90 196 177 The distribution, by gender, of the Company’s workforce at the end of 2024 and 2023 was as follows: 2024 2023 Women Men Women Men Management 1 27 1 26 Middle management 26 40 21 41 Other professionals 59 54 50 46 86 121 72 113 The average number of employees at the Group in 2024 and 2023 with a disability equal to or greater than 33%, by category, was as follows: Average number of employees 2024 2023 Professional category: Management - - Middle management - - Other professionals 5 5 5 5 20. Fees paid to auditors At the Annual General Meeting held on 27 April 2023, the shareholders approved the appointment of PricewaterhouseCoopers Auditores, S.L. as the Company's auditors to audit the financial statements for the financial years 2024, 2025 and 2026. In 2024 and 2023, the fees for audit services of the Company provided by PricewaterhouseCoopers Auditores, S.L., auditor for 2024 and Deloitte, S.L. auditor for 2023, were as follows: 83 Thousands of euros 2024 2023 Audit services 356 422 Other verification services 78 144 Total audit services 434 566 Services required under applicable regulations: - - Tax advisory services - - Other services 38,200 - Total 472 566 “Other audit-related services” includes the verification services performed by the auditor in the bond issue process, as well as certain agreed procedures related to the performance of covenants. For its part, the audit services include, in addition to the statutory annual audit, services from revisions of intermediate periods. 21. Information on financial risk management Financial risk factors The Company’s activities are exposed to various financial risks: market risk, credit risk, liquidity risk and cash flow interest rate risk. The Company’s global risk management programme focuses on the uncertainty of the financial markets and aims to minimise the potential adverse effects on the Company’s financial returns. Risk management is undertaken by the Company’s senior management in accordance with the policies approved by the Board of Directors. Senior management identifies, assesses and hedges financial risks in close cooperation with the Company’s operating units. The Board of Directors issues the written global risk management policies and the policies for specific areas, including those for covering market risk, interest rate risk and liquidity risk and investing cash surpluses. Market risk Given the current status of the real-estate sector and in order to mitigate its effects, the Group has specific measures in place to minimise that impact on its financial position. These measures are applied pursuant to the results of sensitivity analyses carried out by the Company on a regular basis. These analyses involve: • The economic environment in which it operates: Designing different economic scenarios and modifying the key variables potentially affecting the Group. Identifying interdependent variables and the extent of their relationship; and • The time scale in which the assessment is being carried out: The time frame of the analysis and its possible deviations will be taken into account. The Company is exposed to market risk from possible vacancies or renegotiations of leases when the leases expire. This risk could have a direct negative impact on the valuation of the Company's assets. However, market risk is mitigated by the customer acquisition and selection policies and the mandatory lease terms negotiated with customers. Therefore, at 31 December 2024, the average occupancy rate of the Company’s asset portfolio was 94.8%, with a weighted average unexpired lease term of 3.2 years (weighted by GRI). 84 Credit risk Credit risk is defined as the risk of financial loss to which the Company is exposed if a customer or counterparty does not comply with its contractual obligations. In general, the Company holds its cash and cash equivalents at banks with high credit ratings. The Group does not have any material credit risk concentration and has policies in place to limit the volume of risks posed by customers. Exposure to the risk of being unable to recover receivables is mitigated in the normal course of business through funds or guarantees deposited as collateral. The Company has formal procedures to identify any impairment of trade receivables. Delays in payment are detected through these procedures and individual analysis by business area and methods are established to estimate impairment loss. Cash and cash equivalents The Company has cash and cash equivalents of EUR 1,394 million, which represents its maximum exposure to the risk posed by these assets. Cash and cash equivalents are deposited with banks and financial institutions. Liquidity risk Liquidity risk is defined as the risk of the Company encountering difficulties meeting its obligations regarding financial liabilities settled in cash or with other financial assets. At 31 December 2024, the Company’s working capital amounted to EUR 1,430,973 thousand. The Company conducts prudent management of liquidity risk by maintaining sufficient cash to meet its payment obligations when they fall due, both in normal and stressed conditions, without incurring unacceptable losses or risking the Company’s reputation. In addition, liquidity risk has the following mitigating factors, which should be highlighted: (i) the generation of recurrent cash from the businesses in which the Company conducts its activity; and (ii) the credit facilities available in the amount of EUR 797,322 and (iii) the capacity to renegotiate and obtain new financing facilities based on the Company's long-term business plans and the quality of its assets. At the date the financial statements were authorised for issue, taking into account the foregoing, the Company had covered all its funding requirements to fully meet its commitments to suppliers, funders, employees and the authorities based on the cash flow forecast for 2025. Likewise, the type of sector in which the Company operates, the investments it makes, the financing it obtains to make such investments, the EBITDA they generate and the occupancy rates of the properties, enables the liquidity risk to be mitigated and excess cash to be produced. Any cash surpluses are used to make short-term investments in highly liquid deposits with no risk. The acquisition of share options or futures, or any other high-risk deposits as a method of investing cash surpluses, is not among the possibilities considered by the Company for investing cash surpluses. Interest rate risk in cash flows The Company manages its interest rate risk by borrowing at fixed and floating rates of interest. The Company’s policy is to ensure non-current net financing from third parties is at a fixed rate. Exchange rate risk The Company's policy is to borrow in the same currency as that of the cash flows of each business. Consequently, currently there is no foreign currency risk. The Company is not exposed to exchange rate fluctuations as all its operations are in its functional currency. 85 Tax risk As mentioned in Note 1, the Company and part of its subsidiaries are subject to the special tax regime for listed companies investing in the property market (REITs). The transitional period of the Parent ended in 2017 and, therefore, compliance with all requirements established by the regime (see Notes 1 and 4.11) became mandatory. Some of the more formal obligations that the Company must meet involve the inclusion of the term SOCIMI (REIT) in its company name, the inclusion of certain information in the notes to its separate financial statements, the share price on the stock market, etc., and other obligations that require estimates to be made and judgements to be applied by management that may become fairly complex, especially considering that the REIT regime is relatively recent and was developed by the Directorate-General of Taxes mainly in response to the queries posed by various companies. The Company management, based on the opinion of its tax advisers, assessed compliance with the requirements of the regime, concluding that such requirements were met at 31 December 2024. Accordingly, and also for the purpose of taking into consideration the financial effect of the regime, it should be noted that, as established in section 6 of Law 11/2009, of 26 October, amended by Law 16/2012, of 27 December, on REITs, and following provisions, and in the percentages established in it, companies that have opted for the special tax regime are required to distribute the profit generated during the year to their shareholders in the form of dividends, once the related corporate obligations have been met. This distribution must be approved within six months from each year-end, and the dividends paid in the month following the date on which the pay-out is agreed (see Note 4.11). If the Company does not comply with the requirements established in the regime or if the shareholders at the General Meetings of these companies do not approve the dividend distribution proposed by the Board of Directors, calculated in accordance with the requirements of this Act, it would not be complying therewith and, accordingly, tax would have to be paid under the general regime, not the regime applicable to REITs. Risk in climate change management Within the framework of the European Green Pact and the UN Sustainable Development Goals, the Group is performing various actions on sustainability. First, the Company, in 2021, formed a Sustainability and Innovation Committee under the Board that has the main competencies to advise the Board, among other aspects, on environmental and sustainability issues; to advise the Board on the development of the Company's strategy on sustainability in its relationships with stakeholders and in its publication and public communication; and to supervise the communication and information to the market of any information that refers to sustainability issues and non-financial information and to keep the ESG risk map updated (Environmental Social and Governance). In this regard, the Company included decision factors in relation to non-financial KPIs in its investment and financing policies. In this line, the investment studies of real estate acquisitions and investments in repositioning of the Company's assets take into account, among other factors, elements such as obtaining energy efficiency certificates with the highest rating, air conditioning, lighting, solar energy, irrigation of green areas, accessibility, etc. When certifying assets, the Company selects the most appropriate framework and modality based on the asset's phase, the characteristics of the building, its occupancy rate at the time of certification or the tenants who occupy it. We are continuing the process of certifying the portfolio under the standards of the leaders in this market, BREEAM and LEED, with the aim of certifying 99% of our portfolio. In 2024 the Group certified or obtained the renewal of 35 assets The Group considers the certification process of its assets as an anticipated response to the demands that the market will place on property lessors in the medium term and which will enable it to maintain its current competitive position. Additionally, the Group obtained a 83% rating in the 2023 edition of GRESB, a platform that makes it possible to harmonise and compare information related to sustainability criteria (environmental, social and corporate governance - ESG) in real estate investments. In addition, the Group has an Environmental Management System (EMS) certified according to ISO 14001, which is the umbrella under which it manages its portfolios and that incorporates new properties into its scope every year. 86 From 2015, the Group performed plan for ISO 14001 (environmental management) and ISO 50001 (energy management) certifications to maintain and expand the number of real estate assets that have at least ISO 14001 certification, and subsequently ISO 50001 certification (based on the understanding that it is a natural step to obtain ISO 14001 certification before aspiring to ISO 50001). This plan includes office buildings, shopping centres and logistics warehouses. ISO 14001, in 2024, 91 buildings comprising a surface area of 1,232,053 m2 were certified, 3 more buildings than in 2023. Since 2017, the Group has also performed a process of implementing an Energy Management System under the ISO 50001 standard, which began in 2017. Currently, 88 buildings are certified composing a surface area of 417,366 m2, 3 more than in 2023. The assets included in this system aim to reduce total energy consumption by 8% compared to 2023, based on the implementation of MAEs (energy saving measures). In 2024, the Group performed an analysis of the entire portfolio to determine the carbon footprint of each of its assets, and the measures necessary to reduce the above carbon footprint. The Group’s progress in 2024 has enabled the Company to comply with its emissions reduction objective and “Pathway to Net Zero” for 2030, thus getting a head start on the European strategy for decarbonisation of the economy and ensuring the present and future survival of the Company and its assets. MERLIN’s progress over the last few years has enabled the Company to define its emissions reduction strategy or “Pathway to Net Zero” for 2030, thus getting a head start on the European strategy for decarbonisation of the economy and ensuring the present and future survival of the Company and its assets. The Group's Path to Net Zero is a road map that includes improving the performance not only of the Company itself and of those assets over which it has operational control, but of the main stakeholder responsible for the Group's issues throughout its entire value chain, including suppliers and tenants. The Company’s financing policies are also aligned with its sustainability objectives through the Green Financing Program published in April 2022 and the conversion of 100% of its bonds in circulation into green bonds. Currently, 98.2% of the Group's debt with credit and bond institutions is linked to the Green Financing Program or ESG criteria (see Note 14). The Green Financing Program, in line with best market practices, includes the following eligibility criteria: 1. Green assets with the best LEED/BREEAM certification levels or energy efficiency certificates and/or minimum carbon emission levels 2. Investments in Energy Efficiency 3. Investments in renewable energy 4. Investments in pollution control and prevention mechanisms 5. Investments in transport mechanisms with low carbon emissions Financing linked to ESG targets includes a cost adjustment mechanism linked, in the Company's opinion, to own credit risk, based on management indicators calculated based on four sustainability criteria that must be met at least three times annually and cumulatively over the 2019-2025 period. In addition, the Group in its commitment to climate responsibility incorporated qualitative factors related to the Group's sustainability strategy into the measurement targets for short-term variable compensation for its staff and management team (see Note 17). It has also committed to report in the Statement of Non-Financial Information (NFI) in accordance with TCFD recommendations. The above initiatives, while increasing the Group's operating costs, are aimed at anticipating regulatory developments and building customer loyalty. Finally, the Group has also made progress in publishing its Path to Net Zero. The Group's Path to Net Zero is a road map that includes improving the performance not only of the Company itself and of those assets over 87 which it has operational control, but of the main stakeholder responsible for the Group's issues throughout its entire value chain, including suppliers and tenants. This strategy has 5 axes of action: 1 Operational carbon reduction: 85% of operational carbon reduction from baseline (2018) to target (2028). 2 Reduction of embodied carbon: Embodied carbon footprint calculated in all new developments and repositions. 3 Offset of residual emissions: The inevitable footprint will be mostly offset by duly certified own initiatives. 4 Reduction in tenant emissions: Green clauses in all new contracts and reduction in the rental price associated with their own credit risk for net zero tenants. 5 Renewable energy: Acquisition of 100% renewable energy and on-site generation of energy through solar power panels (Sun Project). All of the above is part of the Group's net zero path or commitment to combating climate change. By 2024, the decarbonisation targets included in its "Road to Net Zero" have been validated and approved by the SBTi initiative. 22. Securities issued to third parties and other contingent liabilities At 31 December 2024 and 2023, the Company had granted bank guarantees amounting to EUR 33,591 thousand and EUR 21,541 thousand, respectively. 23. Events after the reporting period From the closing of the 2024 financial year until the date of preparation of these consolidated annual accounts, no significant events have occurred. APPENDIX I - Group companies and associates 2024 Company Line of business / Location Ownership interest Thousands of euros Consolidation method Auditor Share capital Profit/(Loss) Other Total Dividends Carrying amount From operations Net Shareholders' Equity Equity Received Cost Impairment Merlin Retail, S.L.U. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 24,212 19,777 18,544 372,168 414,924 12,146 390,432 - Global integration PwC Merlin Oficinas, S.L.U. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 32,797 30,115 29,536 767,292 829,625 26,502 833,226 - Global integration PwC Merlin Logística, S.L.U. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 34,290 28,180 12,379 325,721 372,390 9,616 353,842 - Global integration PwC Sevisur Logística Urban development, construction and operation of logistics and common services buildings. Ctra. de la Esclusa, 15. 41011, Seville. 100% 17,220 4,797 4,332 10,763 32,315 3,857 37,629 - Global integration PwC Parques Logísticos de la Zona Franca, S.A. Real estate acquisition and development for leasing, Avda. 3 del Parc Logístic, nº 26, Barcelona 100% 15,701 28 (2,232) 105,845 119,314 925 118,310 - Global integration PwC The Exhibitions Company , S.A.U. Provision of all kinds of technical, commercial or economic services/ Paseo de la Castellana 257, Madrid 100% 180 (1,155) (1,161) 886 (95) - 4,287 (4,287) Global integration N/A Gescentesta, S.L.U. Provision of Services / Paseo de la Castellana 257, Madrid 100% 3 253 208 1,304 1,515 - 3 - Global integration N/A La Vital Centro Comercial y de Ocio, S.L. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 14,846 3,936 4,357 19,310 38,513 4,123 56,788 - Global integration PwC Desarrollo Urbano de Patraix, S.A. Land management / Avda. Barón de Carcer, 50, Valencia 100% 2,790 - (357) 21,845 24,278 - 25,090 (812) Global integration N/A Sadorma 2003, S.L. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 73 - 3,454 20,624 24,151 - 25,485 (1,335) Global integration N/A Varitelia Distribuciones, S.L.U. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 18,443 6,886 (736) 13,506 31,213 - 202,979 (171,767) Global integration PwC Global Carihuela, Patrimonio Comercial S.L. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 3,303 626 (2,071) 5,018 6,250 12,244 34,102 (27,852) Global integration PwC Innovación Colaborativa, S.L. Selection, contracting, fitting out, organization and management of coworking spaces / Paseo de la Castellana 257, Madrid 100% 27 (5,158) (5,760) 10,880 5,147 - 30,868 (25,721) Global integration PwC Milos Asset Development, Acquisition, ownership, administration, disposal and development of land located within the "Distrito Castellana Norte" project / Paseo de la Castellana 257, Madrid 100% 163 (9) (374) 1,169 958 - 1,603 (648) Global integration N/A Company Line of business / Location Ownership interest Thousands of euros Consolidation method Auditor Share capital Profit/(Loss) Other Total Dividends Carrying amount From operations Net Shareholders' Equity Equity Received Cost Impairment Merlin Edged, S.L.U. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 3 116 116 - 119 - 3 - Global integration PwC MPCVI – Compra e Venda Imobiliária, S.A. Real estate acquisition and development for leasing /Avda. Dom João, 45, Lisbon 100% 1,050 1,134 362 5,990 7,402 188 6,418 - Global integration PwC Portugal MPEP – Properties Escritórios Portugal, S.A. Real estate acquisition and development for leasing /Avda. Dom João, 45, Lisbon 100% 50 910 32 413.878 496 - 1,085 - Global integration PwC Portugal MP Monumental, S.A. Real estate acquisition and development for leasing /Avda. Dom João, 45, Lisbon 100% 50 2,704 (20) 25,554 25,584 12 41,570 - Global integration PwC Portugal MP Torre A, S.A. Real estate acquisition and development for leasing /Avda. Dom João, 45, Lisbon 100% 50 (644) (1,656) 10,860 9,254 - 21,601 - Global integration PwC Portugal VFX Logística, S.A. Real estate acquisition and development for leasing /Avda. Dom João, 45, Lisbon 100% 5,050 (6,448) (7,265) 61,880 59,665 - 50,382 - Global integration PwC Portugal Promosete, Invest. Inmobil. SA. Real estate acquisition and development for leasing /Avda. Dom João, 45, Lisbon 100% 200 1,625 861 7,593 8,654 1,221 10,384 - Global integration PwC Portugal Praça Do Marquês serviços Auxiliares, SA Real estate acquisition and development for leasing /Avda. Dom João, 45, Lisbon 100% 15,893 3,707 3,999 61,317 81,209 841 56,361 - Global integration PwC Portugal Torre Dos Oceanus Investimentos Inmobiliarios,S.A. Real estate acquisition and development for leasing /Avda. Dom João, 45, Lisbon 100% 50 2,104 1,065 3,319 4,434 838 15,912 - Global integration PwC Portugal Forum Almada – Gestão Centro Comercial Sociedade Unipessoal, Lda. Real estate acquisition and development for leasing /Avda. Dom João, 45, Lisbon 100% 5 20,000 10,594 94,390 104,989 - 89,453 - Global integration PwC Portugal Forum Almada II, S.A. Real estate acquisition and development for leasing /Avda. Dom João, 45, Lisbon 100% 10,000 13,320 9,559 84,178 103,737 - 344,112 - Global integration PwC Portugal Torre Arts Investimentos Imobiliarios, S.A. Real estate acquisition and development for leasing /Avda. Dom João, 45, Lisbon 100% 100 3,844 3,017 78,153 81,270 2,267 80,281 - Global integration PwC Portugal Real estate acquisition and development for leasing /Avda. Dom João, 45, Lisbon 100% 100 1,608 1,042 12,370 13,512 1,193 13,055 - Global integration PwC Portugal MPLIB – Investimentos Imobiliários, Unipessoal Lda. Real estate acquisition and development for leasing /Avda. Dom João, 45, Lisbon 100% 2,000 10,549 7,519 50,716 60,235 - 56,808 - Global integration PwC Portugal Paseo Comercial Carlos III, S.A. Real estate acquisition and development for leasing / Avda. San Martín Valdeiglesias, 20 28922 Madrid 50% 8,698 5,603 1,548 26,393 36,639 - 25,668 - Equity method PwC Provitae Centros Asistenciales, S.L. Real estate acquisition and development for leasing / C. Fuencarral, 123. Madrid 50% 6,314 (46) (130) (1,675) 4,509 - 5,061 (2,807) Equity method PwC G36 Development, S.L. Real estate acquisition and development for leasing / Paseo de la Castellana 93, Madrid 50% 3 21 21 8 32 - 2 - Equity method N/A Centro Intermodal de Logística S.A. (CILSA) Development, management and implementation of logistics activities in the port system / Avenida Ports d’Europa 100, Barcelona 48.5% 18,920 26,715 17,737 130,084 166,741 5,922 95,688 - Equity method Mazars Pazo de Congresos de Vigo, S.A. Execution project, construction and operation of the Vigo Conference Center / Avda. García Barbón, I. Vigo 44.44% n.d. n.d. n.d. n.d. n.d. - 3,600 (3,600) Equity method N/A Company Line of business / Location Ownership interest Thousands of euros Consolidation method Auditor Share capital Profit/(Loss) Other Total Dividends Carrying amount From operations Net Shareholders' Equity Equity Received Cost Impairment Parking del Palau, S.A. Real estate acquisition and development for leasing / Paseo de la Alameda, s/n. Valencia 33% 1,698 235 252 392 2,342 - 2,137 (1,199) Equity method BDO Araba Logística, S.A. Real estate acquisition and development for leasing / Avda. Álava s/n Rivabellosa (Álava) 25% 1,750 12,003 11,513 22,001 35,264 - 2,257 - Equity method Mazars Crea Madrid Nuevo Norte, S.A. Performing all types of real estate activities / Paseo de la Castellana 216, Madrid 14% 504,197 (5,440) (4,550) (38,347) 461,300 - 217,490 (2,874) Equity method EY HCG Levante, S.L. Property management and administration under a rental regime /Calle Travessera de Gracia, 30, Barcelona 6% 64 (61) (61) 14,351 14,354 - 1,070 - Equity method N/A Moregal Hotels, S.L. Real estate acquisition and development for leasing / Alameda de Colón , 9, Málaga 7% 5,307 (46) (16) 1,179 6,470 - 1,585 (3) Equity method N/A Silicius Real Estate, SOCIMI, S.A. Performing all types of real estate activities / Calle de Velázquez, 123, Madrid 18% 31,394 4,736 (10,329) 288,128 309,193 - 88,572 - Equity method PwC Edged Spain, S.L.U Provision of Data Center services / Paseo de la Castellana 257, Madrid 50% 3 - - (1) 2 - 2 - Equity method PwC (*) Indirect APPENDIX I - Group companies and associates 2023 Company Line of business/Location Ownership interest Thousands of euros Consolidation method Auditor Share capital Profit/(Loss) Other Total Dividends Carrying amount From operations Net Shareholders' Equity Equity Received Cost Impairment Merlin Retail, S.L.U. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 24,212 7,231 5,718 378,597 408,527 13,330 390,432 - Global Integration Deloitte Merlin Oficinas, S.L.U. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 32,797 16,763 16,097 768,987 817,881 22,377 824,488 - Global Integration Deloitte Merlin Logística, S.L.U. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 34,290 32,352 15,841 319,496 369,627 43,842 353,842 - Global Integration Deloitte Sevisur Logística Urban development, construction and operation of logistics and common services buildings. Ctra. de la Esclusa, 15. 41011, Seville. 100% 17,220 4,954 4,285 10,335 31,840 3,906 37,629 - Global Integration Deloitte Parques Logísticos de la Zona Franca, S.A. Real estate acquisition and development for leasing, Avda. 3 del Parc Logístic, nº 26, Barcelona 100% 15,701 1,720 925 105,845 122,471 - 118,310 - Global Integration Deloitte The Exhibitions Company , S.A.U. Provision of all kinds of technical, commercial or economic services/ Paseo de la Castellana 257, Madrid 100% 180 (1,218) (1,158) 2,044 1,066 - 4,287 (3,221) Global Integration N/A Gescentesta, S.L.U. Provision of Services / Paseo de la Castellana 257, Madrid 100% 3 249 250 1,054 1,307 - 3 - Global Integration N/A La Vital Centro Comercial y de Ocio, S.L. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 14,846 3,742 4,130 19,302 38,278 2,896 56,788 - Global Integration Deloitte Desarrollo Urbano de Patraix, S.A. Land management / Avda. Barón de Carcer, 50, Valencia 100% 2,790 (2) (341) 22,186 24,635 - 25,090 (455) Global Integration N/A Sadorma 2003, S.L. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 73 598 1,608 19,016 20,697 - 25,485 (4,788) Global Integration N/A Global Murex Iberia, S.L. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 14 (1) 88 (15,438) (15,336) - - - Global Integration N/A Varitelia Distribuciones, S.L.U. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 15,443 (10,613) (19,604) 6,110 1,949 1,150 172,979 (171,031) Global Integration Deloitte Company Line of business/Location Ownership interest Thousands of euros Consolidation method Auditor Share capital Profit/(Loss) Other Total Dividends Carrying amount From operations Net Shareholders' Equity Equity Received Cost Impairment Global Carihuela, Patrimonio Comercial S.L. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 3,303 15,127 12,766 4,510 20,579 1,371 34,102 (13,524) Global Integration Deloitte Innovación Colaborativa, S.L. Selection, contracting, fitting out, organization and management of coworking spaces / Paseo de la Castellana 257, Madrid 100% 15 (2,719) (3,021) (1,087) (4,093) - 15,868 (15,868) Global Integration N/A Milos Asset Development, Acquisition, ownership, administration, disposal and development of land located within the "Distrito Castellana Norte" project / Paseo de la Castellana 257, Madrid 100% 3 (3) (407) 136 (268) - 3 (2) Global Integration N/A Slack Tailwind Systems, S.L.U Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 1,014 (14) (75) (10) 929 - 1,014 (74) Global Integration Deloitte Slow Rise Spain, S.L.U. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 7,724 312 33 1 7,758 - 7,724 - Global Integration Deloitte Merlin Edged, S.L.U. Real estate acquisition and development for leasing / Paseo de la Castellana 257, Madrid 100% 3 - - - 3 - 3 - Global Integration N/A MPCVI – Compra e Venda Imobiliária, S.A. Real estate acquisition and development for leasing / Av. Fontes Pereira de Melo, Nº 51, Lisbon 100% 1,050 1,162 198 5,980 7,228 198 6,418 - Global Integration Deloitte Portugal MPEP – Properties Escritórios Portugal, S.A. Real estate acquisition and development for leasing / Av. Fontes Pereira de Melo, Nº 51, Lisbon 100% 50 684 (248) 662 464 - 1,085 - Global Integration Deloitte Portugal MP Monumental, S.A. Real estate acquisition and development for leasing / Avda. Dom João, 45, Lisbon 100% 50 2,498 12 25,554 25,616 214 41,570 - Global Integration Deloitte Portugal MP Torre A, S.A. Real estate acquisition and development for leasing / Avda. Dom João, 45, Lisbon 100% 50 874 (137) 9,498 9,411 404 20,101 - Global Integration Deloitte Portugal VFX Logística, S.A. Real estate acquisition and development for leasing. Av. Fontes Pereira de Melo, Nº 51, Lisbon 100% 5,050 21,837 21,562 19,873 46,485 - 30,182 - Global Integration Deloitte Portugal Promosete, Invest. Inmobil. SA. Real estate acquisition and development for leasing. Av. Fontes Pereira de Melo, Nº 51, Lisbon 100% 200 1,976 1,221 7,515 8,936 837 10,384 - Global Integration Deloitte Portugal Praça Do Marquês serviços Auxiliares, SA Real estate acquisition and development for leasing. Av. Fontes Pereira de Melo, Nº 51, Lisbon 100% 15,893 3,566 886 61,273 78,052 1,982 56,361 - Global Integration Deloitte Portugal Company Line of business/Location Ownership interest Thousands of euros Consolidation method Auditor Share capital Profit/(Loss) Other Total Dividends Carrying amount From operations Net Shareholders' Equity Equity Received Cost Impairment Torre Dos Oceanus Investimentos Inmobiliarios,S.A. Real estate acquisition and development for leasing / Avda. Dom João, 45, Lisbon 100% 50 2,018 838 3,319 4,207 827 15,912 - Global Integration Deloitte Portugal Forum Almada – Gestão Centro Comercial Sociedade Unipessoal, Lda. Real estate acquisition and development for leasing / Avda. Dom João, 45, Lisbon 100% 5 20,714 9,914 83,801 93,720 - 89,453 - Global Integration Deloitte Portugal Forum Almada II, S.A. Real estate acquisition and development for leasing / Avda. Dom João, 45, Lisbon 100% 10,000 13,374 9,594 75,471 95,065 - 325,660 - Global Integration Deloitte Portugal Torre Arts Investimentos Imobiliarios, S.A. Real estate acquisition and development for leasing / Avda. Dom João, 45, Lisbon 100% 100 2,971 2,267 78,153 80,520 2,097 80,281 - Global Integration Deloitte Portugal Torre Fernao Magalhaes Investimentos Imobiliarios, S.A. Real estate acquisition and development for leasing / Avda. Dom João, 45, Lisbon 100% 100 1,537 1,193 25,370 26,663 673 26,055 - Global Integration Deloitte Portugal MPLIB – Investimentos Imobiliários, Unipessoal Lda. Real estate acquisition and development for leasing / Avda. Dom João, 45, Lisbon 100% 2,000 (1,079) (3,562) 54,252 52,690 - 56,808 (4,118) Global Integration Deloitte Portugal Paseo Comercial Carlos III, S.A. Real estate acquisition and development for leasing / Avda. San Martín Valdeiglesias, 20 28922 Madrid 50% 8,698 4,328 491 25,902 35,091 - 25,668 - Equity method Deloitte Provitae Centros Asistenciales, S.L. Real estate acquisition and development for leasing / C. Fuencarral, 123. Madrid 50% 6,314 (1,340) (1,417) (258) 4,639 - 5,061 (2,742) Equity method Deloitte G36 Development, S.L. Real estate acquisition and development for leasing / Paseo de la Castellana, 93 Madrid 50% 3 21 21 8 32 - 2 - Equity method N/A Centro Intermodal de Logística S.A. (CILSA) Development, management and implementation of logistics activities in the port system / Avenida Ports d’Europa 100, Barcelona 49% 18,920 26,942 17,443 124,043 160,406 7,880 95,688 - Equity method EY Pazo de Congresos de Vigo, S.A. Execution project, construction and operation of the Vigo Conference Center / Avda. García Barbón, I. Vigo 44% n.d n.d n.d. n.d. — - 3,600 (3,600) Equity method N/A Parking del Palau, S.A. Real estate acquisition and development for leasing / Paseo de la Alameda, s/n. Valencia 33% 1,698 22 24 440 2,162 66 2,137 (1,265) Equity method BDO Araba Logística, S.A. Real estate acquisition and development for leasing / Avda. Álava s/n Rivabellosa (Álava) 25% 1,750 911 391 2,925 5,066 - 2,257 (2,257) Equity method Mazars Company Line of business/Location Ownership interest Thousands of euros Consolidation method Auditor Share capital Profit/(Loss) Other Total Dividends Carrying amount From operations Net Shareholders' Equity Equity Received Cost Impairment Crea Madrid Nuevo Norte, S.A. Performing all types of real estate activities / Paseo de la Castellana 216, Madrid 14% 227,535 (5,858) (3,907) (34,440) 189,188 - 177,485 (2,216) Equity method EY Moregal Hotels, S.L. Real estate acquisition and development for leasing / Alameda de Colón , 9, Málaga 7% 5,307 (34) (26) 1,205 6,486 - 1,585 (2) Equity method n.d Silicius Real Estate, SOCIMI, S.A. Performing all types of real estate activities / Calle de Velázquez, 123, Madrid 18% 31,394 (7,558) (26,900) 331,139 335,633 1,554 88,572 - Equity method PWC Edged Spain, S.L.U Provision of Data Center services / Paseo de la Castellana 257, Madrid 50% 3 223 223 (224) 2 - 2 - Equity method Deloitte APPENDIX II - List of the properties intended for lease and the holding in the share capital of companies referred to in section 2.1 of Law 11/2009, amended by Law 16/2012 ACQ. DATE REIT DATE ASSET NAME ADDRESS TOWN ASSET TYPE USE 1 1 Jan 15 1 Jan 15 Av. de Bruselas, 24 AV Bruselas 24 Alcobendas Invest. Prop. Offices 2 1 Jan 15 1 Jan 15 Av. de Bruselas, 26 AV Bruselas 26 Alcobendas Invest. Prop. Offices 3 1 Jan 15 1 Jan 15 Av. de Bruselas, 33 AV Bruselas 33 Alcobendas Invest. Prop. Offices 4 14 sep 16 14 sep 16 Encinar - Plazas de garaje CL Manuel Pombo Angulo 20 Alcobendas Invest. Prop. Offices 5 14 sep 16 14 sep 16 Av. Europa, 1 - Edificio A-B AV Europa 1 Alcobendas Invest. Prop. Offices 6 1 Jan 15 1 Jan 15 Naves Alovera I-II-III CL Rio Henares 1 Alovera Invest. Prop. Logistics 7 1 Jan 15 1 Jan 15 Naves Azuqueca II y III CL Milan 8 y 12 Azuqueca de Henares Invest. Prop. Logistics 8 1 Jan 15 1 Jan 15 Vilanova, 12-14 AV Vilanova 12 Barcelona Invest. Prop. Offices 9 14 sep 16 14 sep 16 Diagonal 199 AV Diagonal 199 Barcelona Invest. Prop. Offices 10 14 sep 16 14 sep 16 Diagonal 458 AV Diagonal 458 Barcelona Invest. Prop. Offices 11 1 Jan 15 1 Jan 15 Diagonal, 514 AV Diagonal 514 Barcelona Invest. Prop. Offices 12 1 Jan 15 1 Jan 15 Diagonal, 605 AV Diagonal 605 Barcelona Invest. Prop. Offices 13 14 sep 16 14 sep 16 Balmes CL Balmes 236-238 Barcelona Invest. Prop. Offices 14 14 sep 16 14 sep 16 P.E. Poble Nou 22@ Ed. A-C-D CL Bac de roda 52 Barcelona Invest. Prop. Offices 15 14 sep 16 14 sep 16 P.E. Poble Nou 22@ Ed. B CL Fluviá 65 Barcelona Invest. Prop. Offices 16 14 sep 16 14 sep 16 Bizcargi 1 1D CL Bizcargi 1 1D Bilbao Invest. Prop. Other 17 1 Jan 15 1 Jan 15 Naves Cabanillas I CL Castilla la Mancha P. I. Cabanillas Cabanillas del Campo Invest. Prop. Logistics 18 1 Jan 15 1 Jan 15 Naves Coslada I AV de la Cañada 64 Coslada Invest. Prop. Logistics 19 1 Jan 15 1 Jan 15 Naves Coslada III CL Torres Quevedo 1 Coslada Invest. Prop. Logistics 20 14 sep 16 14 sep 16 A4-Getafe (Data Center) CA Polig. Industrial Los Ángles P-33 Getafe Invest. Prop. Other 21 1 Jan 15 1 Jan 15 P.E. Alvia Ed. 1-2-3 CL Jose Echegaray 8 Las Rozas Invest. Prop. Data Center 22 14 sep 16 14 sep 16 P.I. Európolis CL Londres S/N Las Rozas Invest. Prop. Others 23 1 Jan 15 1 Jan 15 Mangraners CL Els Mangraners N-240 Km.88 Lerida Invest. Prop. Offcices 24 14 sep 16 14 sep 16 Torre De Madrid PL De España 18 Madrid Invest. Prop. Others 25 14 sep 16 14 sep 16 Torre de Madrid (Viviendas) PL de España 18 Madrid Invest. Prop. Offices 26 1 Jan 15 1 Jan 15 Plaza de los Cubos CL Princesa 3 Madrid Invest. Prop. Offices 27 1 Jan 15 1 Jan 15 Princesa, 3 CL Princesa 3 Madrid Invest. Prop. Offices 28 1 Jan 15 1 Jan 15 Princesa, 5 CL Princesa 5 Madrid Invest. Prop. Offices 29 1 Jan 15 1 Jan 15 Aparcamiento Princesa CL Princesa 5 Madrid Invest. Prop. Offices 30 1 Jan 15 1 Jan 15 Ventura Rodríguez, 7 CL Ventura Rodriguez 7 Madrid Invest. Prop. Offices 31 14 sep 16 14 sep 16 Callao PL Callao 5 Madrid Invest. Prop. Offices ACQ. DATE REIT DATE ASSET NAME ADDRESS TOWN ASSET TYPE USE 32 1 Jan 15 1 Jan 15 Partenón, 12-14 AV Partenon 12 Madrid Invest. Prop. Offices 33 1 Jan 15 1 Jan 15 Partenón, 16-18 AV Partenon 16 Madrid Invest. Prop. Offices 34 1 Jan 15 1 Jan 15 Eucalipto, 25 CL Eucalipto 25 Madrid Invest. Prop. Offices 35 1 Jan 15 1 Jan 15 Eucalipto, 33 CL Eucalipto 33 Madrid Invest. Prop. Offices 36 1 Jan 15 1 Jan 15 Josefa Valcárcel, 48 CL Josefa Valcarcel 48 Madrid Invest. Prop. Offices 37 1 Jan 15 1 Jan 15 Pedro de Valdivia, 10 CL Pedro de Valdivia 10 Madrid Invest. Prop. Offices 38 1 Jan 15 1 Jan 15 Juan Esplandiú, 11-13 CL Juan Esplandiu 11-13 Madrid Invest. Prop. Offices 39 1 Jan 15 1 Jan 15 Príncipe de Vergara, 187 CL Principe de Vergara 187 Madrid Invest. Prop. Offices 40 1 Jan 15 1 Jan 15 Ribera del Loira, 60 CL Ribera del Loira 60 Madrid Invest. Prop. Offices 41 14 sep 16 14 sep 16 P.E. Puerta de las Naciones Ed. 1 a 4 CL Ribera del Loira 38-50 Madrid Invest. Prop. Offices 42 1 Jan 15 1 Jan 15 Castellana, 83-85 PS de la Castellana 83 Madrid Invest. Prop. Offices 43 14 sep 16 14 sep 16 Cadagua PS de la Castellana 93 Madrid Invest. Prop. Offices 44 14 sep 16 14 sep 16 Castellana, 278 PS de la Castellana 278 Madrid Invest. Prop. Offices 45 14 sep 16 14 sep 16 Torre Castellana 259 PS de la Castellana 259 Madrid Invest. Prop. Offices 46 14 sep 16 14 sep 16 Plaza Ruiz Picasso PL Carlos Trías Bertrán 7 Madrid Invest. Prop. Offices 47 14 sep 16 14 sep 16 Santiago de compostela, 94 CL Santiago de Compostela 94 Madrid Invest. Prop. Offices 48 14 sep 16 14 sep 16 Jose María Churruca Ed. I-II CL Almansa 101-105 Madrid Invest. Prop. Offices 49 14 sep 16 14 sep 16 Jose María Churruca Ed. III-IV CL Beatriz de Bobadilla 14-18 Madrid Invest. Prop. Offices 50 14 sep 16 14 sep 16 Fuente De La Mora CM Fuente de la Mora 9 Madrid Invest. Prop. Offices 51 14 sep 16 14 sep 16 P.E. Vía Norte Ed. 1 a 6 CL Quintanavides 11 a 21 Madrid Invest. Prop. Offices 52 14 sep 16 14 sep 16 P.E. Alvento A-B-C-D VI de los Poblados 1 Madrid Invest. Prop. Offices 53 14 sep 16 14 sep 16 Cristalia VI de los Poblados 3 Madrid Invest. Prop. Offices 54 14 sep 16 14 sep 16 P.E. Sanchinarro Ed. I-II CL María de Portugal 9-11 Madrid Invest. Prop. Offices 55 14 sep 16 14 sep 16 P.E. Las Tablas Ed. 1-2-3 CL Federico Mompou 5 Madrid Invest. Prop. Offices 56 14 sep 16 14 sep 16 Elipse AV Manoteras 18 Madrid Invest. Prop. Offices 57 14 sep 16 14 sep 16 Arturo Soria, 343 CL Arturo soria 343 Madrid Invest. Prop. Offices 58 1 Jan 15 1 Jan 15 C.C. Centro Oeste CL El Carralero. Las Moreras Majadahonda Invest. Prop. Shopping centre 59 1 Jan 15 1 Jan 15 C.C. Larios AV de la Aurora 21 Málaga Invest. Prop. Shopping centre 60 1 Jan 15 1 Jan 15 C.C. Porto Pi AV de Gabriel Roca 54 Palma de Mallorca Invest. Prop. Shopping centre 61 1 Jan 15 1 Jan 15 Nave Pedrola CL General Motors 1. P.I. El Pradillo Pedrola Invest. Prop. Logistics 62 1 Jan 15 1 Jan 15 Ática II, A-B-C AV de Europa 19 Pozuelo de Alarcón Invest. Prop. Offices 63 1 Jan 15 1 Jan 15 Ática 1 AV de Europa 26 Pozuelo de Alarcón Invest. Prop. Offices 64 1 Jan 15 1 Jan 15 Ática 2 CL Inglaterra 2 Pozuelo de Alarcón Invest. Prop. Offices ACQ. DATE REIT DATE ASSET NAME ADDRESS TOWN ASSET TYPE USE 65 1 Jan 15 1 Jan 15 Ática 3 y 4 VI Dos Castillas 33 Edf. 3 y 4 Pozuelo de Alarcón Invest. Prop. Offices 66 1 Jan 15 1 Jan 15 Ática Ed. 6 VI Dos Castillas 33 Edf.6 Pozuelo de Alarcón Invest. Prop. Offices 67 1 Jan 15 1 Jan 15 Cerro Gamos I-II-III-V-VI CL Cerro de los Gamos 1 Pozuelo de Alarcón Invest. Prop. Offices 68 1 Jan 15 1 Jan 15 Sant Cugat I CL Alcalde Barnils 64 San Cugat del Valles Invest. Prop. Offices 69 1 Jan 15 1 Jan 15 Sant Cugat II AV Via Augusta 71 San Cugat del Valles Invest. Prop. Offices 70 1 Jan 15 1 Jan 15 Borbolla AV Borbolla 5 Sevilla Invest. Prop. Offices 71 14 sep 16 14 sep 16 C.C. El Saler CA Autovía De El Saler 16 Valencia Invest. Prop. Shopping centre 72 1 Jan 15 1 Jan 15 Aparcamiento Palau PS de la Alameda 34 Valencia Invest. Prop. Others 73 14 sep 16 14 sep 16 Rambla Salvador Sama CL Rambla Salvador Samà 45/49 Vilanova I La Geltrù Invest. Prop. Others 74 12 Jan 17 12 Jan 17 Torre Glories Av. Diagonal, 211 Barcelona Invest. Prop. Offices 75 21 Jan 20 21 Jan 20 Plaza Cataluña, 9 Plaza Cataluña, 9 Barcelona Invest. Prop. Offices 76 30 Dec 21 30 Dec 21 PE Atica XIX D Pozuelo De Alarcón, 19 Pozuelo de Alarcon Invest. Prop. Offices 77 30 Jul 14 21 Jan 20 Merlin Retail S.L. PS Castellana 257 Madrid Invest. Prop. 78 4 Ago 14 30 Dec 21 Merlin Oficinas, S.L. PS Castellana 257 Madrid Invest. Prop. 79 30 Juj 14 1 Jan 14 Merlin Logística, S.L. PS Castellana 257 Madrid Ownership interest 80 14 sep 16 1 Jan 17 La Vital Centro Comercial y de Ocio, S.L. PS Castellana 257 Madrid Ownership interest 81 14 sep 16 1 Jan 17 Varitelia Distribuciones, S.L. PS Castellana 257 Madrid Ownership interest 82 14 sep 16 1 Jan 18 Global Carihuela Patrimonio Comercial, S.L. PS Castellana 257 Madrid Ownership interest 83 28 Jul 17 1 Jan 17 Sevisur, S.A. PS Castellana 257 Madrid Ownership interest 84 14 sep 16 1 Jan 17 Parc Logístic de la Zona Franca, S.A.U. Avda. 3 del Parc Logístic, nº 26 Madrid Ownership interest 85 7-Nov-23 1 Jan 24 Merlin Edged, S.L.U. PS Castellana 257 Madrid Ownership interest 86 27-Feb-20 1 Jan 19 Silicius Real Estate SOCIMI, S.A. Velázquez, 123 Madrid Ownership interest 87 17-Oct-16 27 Dec 19 VFXIMO Investimentos Imobiliarios, S.A. Av. D. João II, 45, 5ºC Lisboa (Portugal) Ownership interest 88 18-Mar-15 5 OCt 18 MPEP - Properties Escritórios Portugal, S.A. Av. D. João II, 45, 5ºC Lisboa (Portugal) Ownership interest 89 18-Mar-15 5 Oct 18 MP Compra e Venda Inmobiliária, S.A. Av. D. João II, 45, 5ºC Lisboa (Portugal) Ownership interest 90 31-Mar-16 5 Oct 18 MP Monumental, S.A. Av. D. João II, 45, 5ºC Lisboa (Portugal) Ownership interest 91 31-Mar-16 05 Oct 18 MP Torre A, S.A. Av. D. João II, 45, 5ºC Lisboa (Portugal) Ownership interest 92 07-Apr-17 07 Apr 17 Promosete Investimentos Inmobiliarios, S.A. Av. D. João II, 45, 5ºC Lisboa (Portugal) Ownership interest 93 28 Sep 17 05 Oct 18 Praça do Marques - serviços auxiliares, S.A. Av. D. João II, 45, 5ºC Lisboa (Portugal) Ownership interest 94 30 Apr 18 05 Oct 18 Torre dos Oceanus - Investimentos Inmobiliarios, S.A. Av. D. João II, 45, 5ºC Lisboa (Portugal) Ownership interest 95 17 Jan 19 13 Mar 19 Torre Arts, Investimentos inmobiliàrios, S.A. Av. D. João II, 45, 5ºC Lisboa (Portugal) Ownership interest 96 17 Jan 19 13 Mar 19 Torre Fernão Magalhães Investimentos inmobiliàrios, S.A Av. D. João II, 45, 5ºC Lisboa (Portugal) Ownership interest 97 03 Ago 22 03 Ago 22 MPLIB – Investimentos Imobiliários, Unipessoal Lda. Av. D. João II, 45, 5ºC Lisboa (Portugal) Ownership interest ACQ. DATE REIT DATE ASSET NAME ADDRESS TOWN ASSET TYPE USE 0 0 0 0 0 0 0 0 0 Ownership interest MERLIN PROPERTIES, SOCIMI, S.A. Individual Directors’ Report for the year ended 31 December 2024 1 1. Company description Economic Situation The markets in which MERLIN operates have generally performed well in 2024. This economic environment has led to significant increases in trading volumes, which results in higher occupancy in the four main asset classes in which we operate. Against a backdrop of economic growth and a more stable interest rate environment, domestic investors once again took centre stage in the market, accounting for more than half of the total amount transacted, a significant increase on 2023. The investment volume rose 27%, reaching EUR 14,500 million in 2024 compared with EUR 11,500 million of direct investment in Spain in 2023. 1.1. Situation of the rental market by geographical area Madrid Madrid is both the largest metropolitan area and the main real estate market on the Iberian Peninsula. The absorption of office space was around 570,000 sqm, 30% more than in 2023. Moreover, prime rents continue to increase to EUR 38 sqm/month and the vacancy rate decreased slightly to 9.0%. As regards the logistics market, it has been a good year in terms of surface area absorption with 1,000,000 sqm contracted, up 17% on the previous year. Rents continue to trend upwards, reaching EUR 5.50-6.00 sqm/month. Finally, shopping centres continue their upward trend in both footfall and sales Barcelona The office rental market in Barcelona continues its upward trend, with absorption of office space standing at around 289,000 sqm (+22% year-on-year) and prime rents rising slightly to EUR 29.75 sqm/month. The vacancy rate has fallen slightly to 12.3%. On the other hand, the logistics market is suffering from a lack of both available land and quality product for e-commerce operators. As far as shopping centres are concerned, the effort ratio remains at very sustainable levels and availability is very limited. Lisbon Record year in terms of surface area absorption, which stood at around 207,000 sqm (+80% increase on 2023) and a vacancy rate that remained at around 8%. Prime rents increased during the year, reaching EUR 27.24/ sqm/month. In relation to logistics, rents remained stable and stand at EUR 5.25/sqm/month, on the Alverca/ Azambuja axis. Lastly, shopping centres have recovered relatively well with sales and foot traffic at pre-covid levels. 1.2. Situation of the rental market by branch of activity Offices According to Savills, the Spanish office market recorded a dramatic increase in investment activity in 2024 compared with 2023 (+50% year-on-year increase). In addition, the vacancy rate rose in both markets to 8.96% in Madrid and 12.3% in Barcelona, although the vacancy rate in the more central submarkets remains low: 4% for both locations. Prime rents have risen slightly in both markets, although there have been slight declines in more peripheral locations. Similar performance has been observed in Portugal. Logistics 2 The upward trend in the logistics sector continues to be fuelled by consumer habits learned during the pandemic and geopolitical events that force many tenants to rethink their offshoring strategy. A good year in terms of logistics contracting in Madrid and Barcelona, far exceeding with pre-Covid volumes. Shopping centres The recovery of activity at shopping centres after the pandemic is now complete, as reflected in the high levels of sales and footfall in 2024. Footfall continues to recover due to improved activity by leisure operators, especially cinemas. Investment volumes are close to EUR 2 billion. Data Centers This is a booming market driven by product scarcity, the advent of submarine cables and the exponential increase in data traffic based on the adoption of the cloud and the emergence of artificial intelligence. In addition, the strategic geographical position (port of entry of submarine cables connecting with other continents and installed capacity and development of renewable energies) makes the Iberian Peninsula an attractive location for the development of Data Centers. 1.3. Organisational and operational structure The Company’s main objective is to generate sustainable shareholder return through the acquisition, focused management and selective rotation of property assets in segments with a moderate risk profile (“Core” and “Core Plus”). Its strategy and operations are characterised by the following: 1. Focusing on Core and Core Plus assets in Spain and Portugal 2. An investment grade capital structure 3. Distribution, through dividends or return of premium, of 80% of the AFFO generated in the year. 4. Being one of the most efficient REITs in Europe 5. Implementing best practices in corporate governance Its internal organisational structure can be summarised as follows: – A Board of Directors composed of 13 directors and advised by the Audit and Control Committee (ACC), the Appointments and Remuneration Committee (ARC) and the Sustainability and Innovation Committee (SIC). MERLIN’s Board of Directors is composed of a majority of independent directors and its activities are focused on defining, supervising and monitoring the policies, strategies and general guidelines to be followed by the Group. The Board is responsible for long-term strategy and for monitoring its implementation. – A General Management, composed of the Chief Executive Officer, (CEO) and the Chief Operating Officer (COO), which reports directly to the Board and sits on it. – An Investment Committee is formed by the management team. 2. Business evolution and results 2.1. Business performance and results in 2024 3 The Company’s business performed excellently during the year, with growth in comparable rents and release spread in all asset categories. The Company closed the year with lease income of EUR 245 million, 7.7% more than in 2023 and an operating profit of EUR 218.2 million. 2.2. Outlook for the Company in 2025 In the absence of externalities, the four main asset classes (offices, logistics, shopping centres and Data Centers) are expected to maintain occupancy levels, while rents will continue to benefit from rising inflation as leases are indexed to the CPI. 3. Results information by branch of activities a) Criteria The Company’s management has segmented its business into the branches of activity outlined below in accordance with the asset class it acquires and manages: • Office buildings. • Shopping centres. • Logistics assets. • Data Centers. • Other: Assets not included in the above branches of activity, which essentially correspond to non- strategic land and smaller assets. Any revenue or expense that cannot be attributed to a specific line of business or relate to the Company in general are attributed as a "Corporate unit/Other", as are the reconciling items arising from the reconciliation of the result of integrating the financial statements of the various branches of activity (prepared using a management approach) and the Company's individual financial statements. The profits of each branch of activity, and each asset within each of them, are used to measure performance as the Group considers this information to be the most relevant when evaluating the results of the branches of activity compared with other groups operating in the same businesses. b) Basis and methodology of profit/loss by branch of activity The information on profit/loss by branch of activity below is generated by the same computer application used to obtain the Company’s accounting information. The branches of activity follow the same accounting policies as the Company, which are described in Note 2. The ordinary income of the branch of activity relates to ordinary revenue directly attributable to the branch of activity plus the relevant proportion of the Company’s general income that can be allocated to it on a reasonable basis. The expenses of each branch of activity are calculated as the directly attributable expenses incurred in the operating activities, plus the corresponding proportion of the expenses that can be reasonably allocated to the branch of activity. During 2024, the Company reclassified certain assets from the ‘Other’ business line to the ‘Office’ business line on the basis of their primary use. This reclassification, although not significant, has been reflected in the comparative figures for 2023. 4 Profit or loss of branches of activity The profit or loss by branch of activity for 2023 and 2022 are presented below: 2024 Thousands of Euros Office buildings Shopping centres Logistics Data Centers Other Corporate Unit Total Dividend income - - - - - 81,895 81,895 Interest income - - - - - 48,047 48,047 Rental income 197,894 38,101 8,467 653 97 - 245,212 Services rendered 2,200 1,661 1,560 67 18 806 6,312 Revenue 200,094 39,762 10,027 720 115 130,748 381,466 Other operating income 1,675 149 26 - 26 1,690 3,566 Staff costs (4,984) (5,075) (1,866) (314) - (19,943) (32,182) Other operating expenses (19,694) (5,547) (759) (3,085) (433) (24,762) (54,280) Depreciation and amortisation (33,812) (6,386) (2,206) (1,855) (122) (24,652) (69,033) Change in provisions - - - - - 8,019 8,019 Impairment and gains or losses on disposal of non-current 2,210 (5,804) - - (74) (15,668) (19,336) Allocation of grants relating to non-financial assets and others 17 - - - - - 17 Profit / (loss) from operations 145,506 17,099 5,222 (4,534) (488) 55,432 218,237 Finance income - - - - - 39,413 39,413 Finance Costs (13,550) - - - - (112,875) (126,425) Changes in fair value of financial instruments - - - - - (3,427) (3,427) Impairment and gains or losses on disposal of financial 3 - - - - (1,004) (1,001) Profit / (loss) before tax 131,959 17,099 5,222 (4,534) (488) (22,461) 126,797 Income tax - - - - - (2,366) (2,366) Profit / (loss) for the year 131,959 17,099 5,222 (4,534) (488) (24,827) 124,431 5 2023 Thousands Euros Office buildings Shopping centres Logistics Data Centers Other Corporate Unit Total Dividend income - - - - - 114,412 114,412 Interest income - - - - - 49,826 49,826 Rental income 180,223 38,638 8,273 106 438 - 227,678 Services rendered 1,654 2,230 1,483 679 18 1,068 7,132 Revenue 181,877 40,868 9,756 785 456 165,306 399,048 Other operating income 1,414 120 10 - 1 641 2,186 Staff costs (3,717) (4,680) (1,179) (242) - (21,128) (30,946) Other operating expenses (17,979) (6,912) (713) (1,265) (498) (14,720) (42,087) Depreciation and amortisation (31,448) (6,481) (2,150) (157) (222) (24,455) (64,913) Change in provisions - - - (404.1) - (6,724) (7,128) Impairment and gains or losses on disposal of non-current (958) (19,513) 1 - (12,167) — (32,637) Profit / (loss) from operations 129,196 3,402 5,725 (1,283) (12,430) 98,920 223,530 Finance income - - - - - 8,994 8,994 Finance Costs (4,809.193) - - - - (104,084) (108,893) Changes in fair value of financial instruments - - - - - (9,891) (9,891) Impairment and gains or losses on disposal of financial - 5 - - - (15,315) (15,310) Profit / (loss) before tax 124,387 3,407 5,725 (1,283) (12,430) (21,376) 98,430 Income tax - - - - - (820) (820) Profit / (loss) for the year 124,387 3,407 5,725 (1,283) (12,430) (22,196) 97,610 4. Capital and Liquidity Resources 4.1. Debt The Group’s strategy is to actively manage both the Group’s assets and the liabilities. In relation to liabilities, the goal is to extend the average maturity of the debt and to try to maintain borrowing costs and eliminate the risk arising from interest rate fluctuations. Currently, 100% of the Company’s debt accrues interest at a fixed rate or is subject to interest rate hedges. MERLIN carried out the following transactions involving its financial liabilities in 2024 and 2023: a. On 17 January 2024, the Company arranged a loan with Caixabank, S.A. secured by a mortgage on a portfolio of 2 office buildings in Madrid. The loan is for an amount of EUR 150 million, matures in 2034 and has a spread of 130 basis points. The loan was drawn down on 2 April 2024. b. On 2 February 2024, the Company increased the amount drawn down (tap) on the bond maturing in September 2029 to 2.375% for an amount of EUR 100 million (implicit cost 3.93%). c. On 7 November 2024, a new limit was set for the second tranche of the European Investment Bank in the amount of EUR 46.7 million, of which EUR 34.6 million was drawn down at year-end 2024. d. On 18 December 2024, the Company drew down EUR 17.7 million from the above-mentioned second tranche of the European Investment Bank at a fixed interest rate of 325.6 basis points. e. At year-end 2024, the Company has EUR 57.3 million undrawn under tranche 2 of the logistics financing and the green loan signed with the European Investment Bank, as well as EUR 740 million under the revolving credit facility. f. On 31 March 2023, the Company arranged an unsecured loan with Kutxabank, S.A. for EUR 30 million with a maturity of 5 years from drawdown and accrues a market rate of EURIBOR + 130 basis points. 6 While the financing is undrawn, a fee of 26 basis points will be applied to the undrawn balance. On 20 April 2023, the entire amount of this facility was drawn down. g. On 24 April 2023, the Company formalised and drew down an unsecured loan with Unicaja Banco, S.A. for EUR 35 million, maturing 5 years from drawdown and bearing a market rate of EURIBOR + 130 basis points. h. On 25 April 2023, the Company repaid the bond corresponding to said maturity for an amount of EUR 743 million. i. On 18 July 2023, the novation of the corporate loan and the credit facility was signed. The senior syndicated loan was increased to EUR 665 million with the incorporation of the amounts of the bilateral loans from Kutxabank and Unicaja described above. In addition, the limit of the credit line was increased to EUR 740 million. At the end of December 2024 it was undrawn. On 16 July 2024, this credit line was extended until 20 April 2029. j. On 15 November 2023, the Company entered into a loan with Allianz secured by a mortgage on a portfolio of 4 office buildings in Madrid. The loan is for an amount of EUR 170 million, with a term of 10 years and accrues a fixed interest rate of 4.523%. At the end of 2024, the Group’s financial debt amounted to EUR 4,707 million, made up of corporate financing without mortgage collateral (loans and bonds) and mortgages. The Company's cash position at December 31, 2024 amounted to EUR 1,409 million, including EUR 15 million of treasury shares. This liquidity is increased by EUR 797.3 million through the revolving credit line, undrawn at year-end 2024, and undrawn financing from the European Investment Bank and the syndicated loan. Additionally, the Group has the ability to access the capital markets through the Euro medium-term note (EMTN) programme, which has a limit of EUR 6,000 million. At 2024 year end, EUR 2,600 million was available through this programme. 5. Environmental matters Since the assets were acquired, the Company has incorporated sustainability into its decision-making process, aware of its impact on improving the performance of assets and the well-being of tenants. The Copay and the Group to which it belongs seek to differentiate its properties along these lines and, to that end, in 2024 they have continued with its three key repositioning plans: Landmark (which has reached its conclusion with the handover of Plaza Ruiz Picasso), Best II and Best III. These plans are focused on creating value by repositioning selected properties, incorporating sustainability into the process, as well as in obtaining better financing terms linked to meeting sustainability targets. 6. Staff management a. Composition of the workforce Merlin Properties SOCIMI, S.A.'s staff are its main asset. At year-end 2024, the Company's team was comprised a total of 207 employees, divided into 3 categories in keeping with MERLIN’s strategy of maintaining a horizontal structure. Total number of employees at 2024 year end. Country, Sex, Professional Category and Age 7 Professional category Women Men Overall total Executive directors 1 27 28 Middle management 26 40 66 Other staff 59 54 113 Total employees 86 121 207 Spain Women Men Overall Total 30-50 years old 1 10 11 >50 years old 0 17 17 Executive Directors 1 27 28 <30 years old 3 4 7 30-50 years old 12 20 32 >50 years old 11 16 27 Middle management 26 40 66 <30 years old 10 7 17 30-50 years old 29 25 54 >50 years old 12 16 28 Other staff 50 46 96 MRL 72 113 185 Total number of employees at 2024 year-end by type of employment contract The Company has a team of professionals with permanent contracts and an average age of 45. From the moment they join the Company, it offers its employees stable contracts to ensure their loyalty and improve its ability to attract talent to the organisation. At the end of 2024, 99.52% of the Company's employees had an indefinite contract. Contract term Time Total Open-ended Full-time 199 Part-time 7 Total open-ended 206 Temporary Full-time 1 Total temporary 1 Overall total 207 7. Dividends policy The Company’s dividend policy takes into account sustainable levels of distribution and reflects the Company’s expectation of obtaining recurring profits. The Company does not intend to create reserves that cannot be distributed to Shareholders, except as required by law. Under the REIT regime, after complying with any relevant requirement of the Corporate Enterprises Act, the Company will be required to pass resolutions to distribute the profit obtained in the year to shareholders in the form of dividends and this distribution must be approved within six months of the end of each year, as follows: (i) at least 50% of the profit from the transfer of properties and shares in qualified subsidiaries, provided that the remaining profit is reinvested in other property assets within no more than three years of the date of the transfer, otherwise, 100% of the profit must be distributed as dividends after such period has elapsed; (ii) 100% 8 of the profit obtained from receiving the dividends paid by qualified subsidiaries; (iii) at least 80% of the remaining profit obtained. If the resolution to distribute dividends is not passed within the legally established period, the Company will lose its REIT status for the financial year to which the dividends refer. As established in the Company’s IPO Prospectus, Merlin Properties, SOCIMI, S.A. has set itself the target of distributing an annual dividend of between 4% and 6% of the IPO value. The Company’s dividend policy establishes a minimum distribution of 80% of the AFFO (“Adjusted FFO”), understood as the cash flow from operations less interest paid and less ordinary maintenance expenses for the assets. On 14 November 2024, the Company's Board of Directors approved the distribution of an interim dividend out of 2024 profits in the amount of EUR 101,234 thousand, which was paid on 10 December 2024. On 9 May 2024, the General Meeting approved the distribution of a dividend charged to the share premium in the amount of EUR 108,505 thousand, as well as the distribution of a final dividend out of the profit for 2023 in the amount of EUR 3,937 thousand, both dividends having been paid on 4 June 2024. 8. Main risks and uncertainties Financial risk factors The Company’s activities are exposed to various financial risks: market risk, credit risk, liquidity risk and cash flow interest rate risk. The Company’s global risk management programme focuses on the uncertainty of the financial markets and aims to minimise the potential adverse effects on the Company’s financial returns. Risk management is undertaken by the Company’s senior management in accordance with the policies approved by the Board of Directors. Senior management identifies, assesses and hedges financial risks in close cooperation with the Company’s operating units. The Board of Directors issues the written global risk management policies and the policies for specific areas, including those for covering market risk, interest rate risk and liquidity risk and investing cash surpluses. Market risk Given the current status of the real-estate sector and in order to mitigate its effects, the Group has specific measures in place to minimise that impact on its financial position. These measures are applied pursuant to the results of sensitivity analyses carried out by the Company on a regular basis. These analyses involve: • The economic environment in which it operates: Designing different economic scenarios and modifying the key variables potentially affecting the Group. Identifying interdependent variables and the extent of their relationship; and • The time scale in which the assessment is being carried out: The time frame of the analysis and its possible deviations will be taken into account. The Company is exposed to market risk from possible vacancies or renegotiations of leases when the leases expire. This risk could have a direct negative impact on the valuation of the Company's assets. However, market risk is mitigated by the customer acquisition and selection policies and the mandatory lease terms negotiated with customers. Therefore, at 31 December 2024, the average occupancy rate of the Company’s asset portfolio was 94.8%, with a weighted average unexpired lease term of 3.2 years (weighted by GRI). Credit risk 9 Credit risk is defined as the risk of financial loss to which the Company is exposed if a customer or counterparty does not comply with its contractual obligations. In general, the Company holds its cash and cash equivalents at banks with high credit ratings. The Company does not have any material credit risk concentration and has policies in place to limit the volume of risks posed by customers. Exposure to the risk of being unable to recover receivables is mitigated in the normal course of business through funds or guarantees deposited as collateral. The Company has formal procedures to identify any impairment of trade receivables. Delays in payment are detected through these procedures and individual analysis by business area and methods are established to estimate impairment loss. Cash and cash equivalents The Company has cash and cash equivalents of EUR 1,393,594 thousand, which represents its maximum exposure to the risk posed by these assets. Cash and cash equivalents are deposited with banks and financial institutions. Liquidity risk Liquidity risk is defined as the risk of the Company encountering difficulties meeting its obligations regarding financial liabilities settled in cash or with other financial assets. At 31 December 2024, the Company’s working capital amounted to EUR 1,430,973 thousand. The Company conducts prudent management of liquidity risk by maintaining sufficient cash to meet its payment obligations when they fall due, both in normal and stressed conditions, without incurring unacceptable losses or risking the Company’s reputation. In addition, liquidity risk has the following mitigating factors, which should be highlighted: (i) the generation of recurrent cash from the businesses in which the Company conducts its activity; and (ii) the drawable credit facilities in the amount of EUR 797,322 thousand; and (iii) the capacity to renegotiate and obtain new financing facilities based on the Company's long-term business plans and the quality of its assets. At the date of preparation of the financial statements, taking into account the foregoing, the Company had covered all its funding requirements to fully meet its commitments to suppliers, financers, employees and the authorities based on the cash flow forecast for 2025. Likewise, the type of sector in which the Company operates, the investments it makes, the financing it obtains to make such investments, the EBITDA they generate and the occupancy rates of the properties, enables the liquidity risk to be mitigated and excess cash to be produced. Any cash surpluses are used to make short-term investments in highly liquid deposits with no risk. The acquisition of share options or futures, or any other high-risk deposits as a method of investing cash surpluses, is not among the possibilities considered by the Company for investing cash surpluses. Interest rate risk in cash flows The Company manages its interest rate risk by borrowing at fixed and floating rates of interest. The Company’s policy is to ensure non-current net financing from third parties is at a fixed rate. Exchange rate risk The Company's policy is to borrow in the same currency as that of the cash flows of each business. Consequently, currently there is no foreign currency risk. The Company is not exposed to exchange rate fluctuations as all its operations are in its functional currency. Tax risk 10 As mentioned in Note 1, the Company and part of its subsidiaries are subject to the special tax regime for listed companies investing in the property market (REITs). The transitional period of the Company ended in 2017 and, therefore, compliance with all requirements established by the regime (see Notes 1 and 4.11) became mandatory. Some of the more formal obligations that the Company must meet involve the inclusion of the term SOCIMI (REIT) in its company name, the inclusion of certain information in the notes to its separate financial statements, the share price on the stock market, etc., and other obligations that require estimates to be made and judgements to be applied by management that may become fairly complex, especially considering that the REIT regime is relatively recent and was developed by the Directorate-General of Taxes mainly in response to the queries posed by various companies. The Company's management, based on the opinion of its tax advisors, assessed compliance with the requirements of the regime, concluding that such requirements were met at 31 December 2024. Accordingly, and also for the purpose of taking into consideration the financial effect of the regime, it should be noted that, as established in section 6 of Law 11/2009, of 26 October, amended by Law 16/2012, of 27 December, on REITs, and in the percentages established in it, companies that have opted for the special tax regime are required to distribute the profit generated during the year to their shareholders in the form of dividends, once the related corporate obligations have been met. This distribution must be approved within six months from each year-end, and the dividends paid in the month following the date on which the pay-out is agreed (see Note 4.11). If the Company does not comply with the requirements established in the regime or if the shareholders at the General Meetings of these companies do not approve the dividend distribution proposed by the Board of Directors, calculated in accordance with the requirements of this Act, it would not be complying therewith and, accordingly, tax would have to be paid under the general regime, not the regime applicable to REITs. Risk in climate change management Within the framework of the European Green Pact and the UN's Sustainable Development Goals, the Group is carrying out various sustainability actions. First, in 2021, the Company created a Sustainability and Innovation Committee reporting to the Board whose main functions are advising the Board, among other aspects, on environmental and sustainability issues; advising the Board on formulating the Company’s strategy on sustainability in its relationships with stakeholders and publishing and communicating it to the public; supervising the reporting and communication to the market of any information that refers to sustainability issues and non-financial information; and keeping the ESG (Environmental, Social and Governance) risk map updated. In this respect, the Company included criteria in relation to non-financial KPIs in its investment and financing policies. Along these lines, the investment studies of property acquisitions and investments in the repositioning of the Company's assets consider, among other factors, elements such as obtaining energy efficiency certificates with the highest rating, air conditioning, lighting, solar power, irrigation of green areas, accessibility, etc. When certifying assets, the Company selects the most appropriate framework and modality based on the asset’s phase, as well as the characteristics of the building, its occupancy rate at the time of certification or the tenants who occupy it. We are continuing the process of certifying the portfolio under the standards of the leaders in this market, BREEAM and LEED. In 2024, the Group certified or renewed the certification for 35 assets. The Group considers the certification process of its assets as an anticipated response to the demands that the market will require from property lessors in the medium term and that will allow it to maintain its current competitive position. Additionally, the Group obtained a rating of 83% in the 2023 edition of GRESB, a platform that makes it possible to harmonise and compare information related to sustainability criteria (environmental, social and corporate governance - ESG) in real estate investments. The Group has an Environmental Management System (EMS) certified in accordance with ISO 14001, which is the umbrella under which it manages its portfolios and that incorporates new properties into its scope every year. Since 2015, the Group has carried out a plan for ISO 14001 (environmental management) and ISO 50001 (energy management) certifications to maintain and expand the number of property assets that have at least 11 ISO 14001 certification, and subsequently ISO 50001 certification (based on the understanding that it is a natural step to obtain ISO 14001 certification before aspiring to ISO 50001). This plan includes office buildings, shopping centres and logistics warehouses. With regard to ISO 14001, in 2024, 91 buildings comprising a surface area of 1,232,053 sqm were certified, 3 more buildings than in 2023. Since 2017, the Group has undertaken a process of implementing an Energy Management System under the ISO 50001 standard, which began in 2017. Currently, 88 buildings are certified, comprising a surface area of 1,232,053 sqm, 3 more than in 2022. In the assets included in said System, there is a target of reducing total energy consumption by 8% in 2026, measured in kilowatt hours of the square meters occupied, with respect to 2022, based on the implementation of ESMs (energy saving measures). In 2024, the Group continued to carry out an analysis of the entire portfolio to determine the carbon footprint of each of its assets, as well as the additional measures necessary to reduce that carbon footprint. The Group’s progress in 2024 has enabled the Company to meet its objective of reducing its emissions and its “Pathway to Net Zero” for 2030, thus getting a head start on the European strategy for decarbonisation of the economy and ensuring the present and future survival of the Company and its assets. The Group’s Pathway to Net Zero is a roadmap that outlines the way to improve not only the performance of the Company and its assets under operational control, but also the behaviour of the key agents responsible for the Group’s emissions along its value chain, including suppliers and tenants. The Company's financing policies are also aligned with the Group's sustainability objectives through the Green Financing Programme published in April 2022 and the conversion of 100% of its bonds in circulation into green bonds. Currently 98.2% of the Group's debt with credit institutions and bondholders is linked to the Green Finance Programme or ESG criteria (see Note 14). The Green Financing Programme, in line with best market practices, includes the following eligibility criteria: 1. Green assets with the best LEED/BREEAM rating levels or energy efficiency certificates and/or minimum carbon emission levels 2. Investments in energy efficiency 3. Investments in renewable energy 4. Investments in pollution control and prevention mechanisms 5. Investments in transport mechanisms with low carbon emissions Financing linked to ESG targets includes a cost adjustment mechanism linked, in the Company's opinion, to own credit risk, based on management indicators calculated based on four sustainability criteria of which at least 3 must be met annually and cumulatively over the 2019-2025 period. In addition, in its commitment to climate responsibility, the Group has incorporated qualitative factors related to the Group's sustainability strategy into the measurement targets for short-term variable compensation for its staff and management team (see Note 17). It also agreed to report in the Statement of Non-Financial Information (SNFI) in accordance with the recommendations of the TCFD. These initiatives, while increasing the Group's operating costs, are aimed at anticipating regulatory developments and building customer loyalty. Finally, the Group has also made progress in publishing its Pathway to Net Zero. The Group’s Pathway to Net Zero is a roadmap that outlines the way to improve not only the performance of the Company and its assets under operational control, but also the behaviour of the key agents responsible for the Group’s emissions along its value chain, including suppliers and tenants. This strategy has 5 main lines of action: 12 1. Operational carbon reduction: 85% reduction in operational carbon from baseline (2018) to target (2028). 2. Reduction of embodied carbon: Embodied carbon footprint calculated in all new developments and repositionings. 3. Offset of residual emissions: The unavoidable footprint will be mostly offset by own duly certified initiatives. 4. Reduction in tenant emissions: Green clauses in all new leases and reduction in rental price, linked to their own credit risk, for net zero tenants, 5. Renewable energy: Acquisition of 100% renewable energy and on-site generation of energy through solar panels (Sun Project). All the above is part of the Company's pathway to net zero or commitment to combating climate change. In 2024, the decarbonisation objectives included in its “Pathway to Net Zero” were validated and approved by the SBTi initiative. 9. Acquisition and disposal of treasury shares At 31 December 2024, the Company held treasury shares amounting to EUR 14,450 thousand. The changes in 2024 were as follows Number of Shares Thousands of euros Balance at 1 January 2023 1,536,184 17,166 Additions 83,106 689 Disposals (220,166) (2,445) Balance at 31 December 2023 1,399,124 15,410 Additions 29,471 293 Disposals (113,950) (1,253) Balance at 31 December 2024 1,314,645 14,450 The shareholders at the Annual General Meeting held on 27 April 2023 revoked the unused portion of the authorisation granted by the shareholders at the General Meeting of 10 April 2019 and authorised the acquisition of treasury shares by the Company itself or by Group companies pursuant to section 146 et seq. of the Corporate Enterprises Act, complying with the requirements and restrictions established in current law during the five-year period. The retirement of 130,950 treasury shares (average cost of EUR 10.99 per share) corresponds mainly to the delivery of shares to employees under the flexible remuneration plan in the amount of EUR 1,019 thousand and to sales under the Group's liquidity agreement for securities listed on the Lisbon Stock Exchange. This liquidity agreement made net sales of 8,142 shares (EUR 59 thousand) in 2024. At 31 December 2024, the Company held treasury shares representing 0.2333% of its share capital. 10. Other relevant information 10.1. Stock market information 13 On 31 December 2024, the Company shares closed at a price of EUR 10.16, representing a 0.99% rise in their price compared with the closing price on 31 December 2023 (EUR 10.06 per share). 10.2. Average period of payment to suppliers The information required by additional provision three of Law 18/2022, of 28 September, on creating and growing companies and Spanish Law 15/2010, of 5 July (amended by final provision two of Law 31/2014, of 3 December), prepared in accordance with the Spanish Accounting and Audit Institute (ICAC) Resolution of 29 January 2016 on the disclosures to be included in the notes to financial statements in relation to the average period of payment to suppliers in commercial transactions, is detailed below. Days 2024 2023 Average period of payment to suppliers 21 39 Ratio of transactions settled 18 39 Ratio of transactions not yet settled 45 36 Thousands of euros 2024 2022 Total payments made 230,671 252,107 Total payments outstanding 26,446 18,942 In accordance with the ICAC Resolution, the average period of payment to suppliers was calculated by taking into account the commercial transactions relating to the supply of goods or services for which payment has accrued in each year. For the sole purpose of the disclosures provided for in the Resolution, suppliers are considered to be the trade creditors for the supply of goods or services included in “Payable to suppliers” and “Sundry accounts payable” under current liabilities in the balance sheet and regardless of any financing due to the early collection of the supplier. “Average period of payment to suppliers” is taken to be the period that elapses from the delivery of the goods or the provision of the services by the supplier to the effective payment of the transaction. The monetary volume and number of invoices paid within the legally established period are detailed below. 2023 2022 Monetary volume (thousands of euros) 226,278 233,676 Percentage of total payments made 98.1 % 92,7 % Number of invoices 23,793 19,950 Percentage of total invoices 98.7 % 80.6% 14 The legal maximum payment period applicable to the Company in 2024 in accordance with Law 3/2004, of 29 December, establishing measures to combat late payment in commercial transactions is 60 days. 10.3. R&D&I activities In relation to R&D+I activities and other innovating initiatives, the Company is committed to offering tenants and users comprehensive services of the highest quality that go beyond pure asset management, incorporating the most innovative solutions into its assets to enhance the user’s experience. In line with this philosophy, the Company continues to focus on improving the quality of life of the users of its assets. An example of this is the implementation of Mayordomo Smart Points, a system of smart lockers where users can receive packages and various services assisting with their work-life balance. At the end of 2024, MERLIN had a total of 23 assets with this system, 28 % less than in 2023 due to the rationalisation of their use.. The Company is also focused on LOOM flexible workspaces as a solution to the hybrid work model. During the year, the Company has continued to drive several projects of a technological nature to position itself at the forefront in terms of solutions for its clients and internal management. These include the sensorisation programme for office buildings, the energy consumption reading project, the photovoltaic self-consumption project and the development of the various user experience apps. 11. Events after the reporting period From the closing of the 2024 financial year until the date of preparation of these consolidated annual accounts, no significant events have occurred. 12. Alternative Performance Measures See the definitions of the APMs, as well as their reconciliation with MERLIN’ financial statements, in the consolidated directors’ report accompanying the 2023 consolidated financial statements. 13. Annual Corporate Governance Report The Annual Corporate Governance Report is available in full on the website of the Spanish Securities Market Commission (www.cnmv.es) and the Company's website (www.merlinproperties.com). In addition, the Annual Corporate Governance Report has been filed as Other Relevant Information (OIR) with the Spanish Securities Market Commission. 14. Annual Board Remuneration Report The Annual Board Remuneration Report is available in full on the website of the Spanish Securities Market Commission (www.cnmv.es) and the Company's website (www.merlinproperties.com) In addition, the Annual Board Remuneration Report has been filed as Other Relevant Information (OIR) with the Spanish Securities Market Commission. 15 MERLIN PROPERTIES, SOCIMI, S.A. Preparation (formulación) of the Individual Financial Statements and individual Directors’ Report relating to the fiscal year ended December 31, 2024. In accordance with articles 365 and 366 of the Companies Registry Regulations, in relation to subarticle one of article 253 of the Capital Companies Law in force, the Board of Directors of MERLIN Properties, SOCIMI, S.A. (the “Company”) has prepared (formulado) (in English) the individual financial statements and the individual directors’ report (which has attached, as a separate section, the Annual Corporate Governance Report and the Annual Director Remuneration Report), relating to the year ended December 31, 2024, in single electronic format according with the Commission Delegated Regulation (EU) 2019/815 of 17 December 2018 and included in the electronic file/s with the following hash code/s Number: (The “Individual Financial Statements File”). The Statement of Non-Financial Information is included in the consolidated directors' report. In addition, through the execution and signature of this signature page, and pursuant to subarticle two of said article 253, the members forming the Company’s Board of Directors declare that they have signed, in their own handwriting, the entire contents of the Individual Financial Statements File. ______ Mr. José Luis de Mora Gil-Gallardo Chairman _____ Mr. Ismael Clemente Orrego Vice-Chairman ____ Mrs. Francisca Ortega Hernández-Agero Member ____ Mr. Juan Antonio Alcaraz García Member ____ Mrs. María Luisa Jorda Castro Member ____ Mrs. Pilar Cavero Mestre Member ____ Mr. Juan María Aguirre Gonzalo Member ____ Mr. Miguel Ollero Barrera Member ____ Mrs. Inès Archer Toper Member ____ Mrs. Ana María García Fau Member ____ Mr. Emilio Novela Berlín Member ____ Mr. George Donald Johnston Member ____ Mr. Fernando Javier Ortiz Vaamonde Member ____ Mrs. Julia Bayón Pedraza Member Madrid, February 27, 2025 MERLIN Properties, SOCIMI, S.A. DECLARATION OF RESPONSIBILITY FOR THE 2024 FINANCIAL STATEMENTS The members of the Board of Directors of Merlin Properties, SOCIMI, S.A. declare that, to the best of their knowledge, the individual financial statements of Merlin Properties, SOCIMI, S.A. and the consolidated financial statements with its subsidiaries, for the year ended December 31, 2024, prepared (formuladas) (in English) by the Board of Directors at the meeting held on February 27, 2025, in accordance with the applicable accounting principles and in single electronic format, offer a true and fair view of the net worth, financial situation and results of Merlin Properties, SOCIMI, S.A. and of the subsidiaries included in the consolidated group, taken as a whole, and that the directors’ reports accompanying the individual and consolidated financial statements (along with their attachments and supplementary documentation including the Statement of Non-Financial Information as part of the Consolidated Directors' Report) include a true analysis of the business performance, results and position of Merlin Properties, SOCIMI, S.A. and of the subsidiaries included in the consolidated group, taken as a whole, and a description of the main risks and uncertainties they face. Signatories: ____ Mr. José Luis de Mora Gil-Gallardo Chairman ____ Mr. Ismael Clemente Orrego Vice-Chairman ____ Mrs. Francisca Ortega Hernández-Agero Member ____ Mr. Juan Antonio Alcaraz García Member ____ Mrs. María Luisa Jorda Castro Member ____ Mrs. Pilar Cavero Mestre Member ____ Mr. Juan María Aguirre Gonzalo Member ____ Mr. Miguel Ollero Barrera Member ____ Mrs. Inès Archer Toper Member ____ Mrs. Ana María García Fau Member ____ Mr. Emilio Novela Berlín Member ____ Mr. George Donald Johnston Member ____ Mr. Fernando Javier Ortiz Vaamonde Member _______ Mrs. Julia Bayón Pedraza Member In Madrid, on February 27, 2025

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