MERLIN Properties Annual Report 2018 / English

ı 9 ı Annual Report 20 18 to last year. Particularly significant was the growth in offices (+179 basis points) and shopping centres (+164 basis points). The MERLIN team has undertaken strident efforts in 2018 to make the Company even sturdier, a matter of great importance as strength today is the guarantee of resistance against future turbulence, should this appear. Especially relevant was the reduction in the level of indebtedness, having ended the year at 40.7%, standing at 43.6% in 2017. A reduction that has been accompanied by an improvement in all debt ratios: the average cost of debt has dropped to 2.1% while corporate debt, that is, without mortgage guarantees, has risen to 81.3%. All this work has been endorsed by the credit rating agency Standard & Poors, which has placed the BBB rating granted to MERLIN Properties in a positive outlook. Strength, diversification, positioning and solidity. A virtuous loop that reinforces the foundations of MERLIN Properties today. Yet it is also worth looking towards the future, since in 2018 progress has been made in building the levers of growth that awaits us. We are talking about the plans launched last year, “Landmark” for offices, “Flagship” for shopping centres and “Best II” for logistics. Plans that jointly add an investment of 1 billion euros and that are the guidelines for the extraction of value, the road map present in the daily work of each one of the employees of the Company. Let us delve deeper into this progress of the plans with real examples. In the heading “Landmark”, worthy of special mention this year is the Glóries Tower, an emblematic asset, acquired as vacant in 2017 and whose refurbishment has made significant progress this year. We have reached full occupancy during 2018. In the heading “Flagship”, the refurbishment of Arturo Soria has been completed. The centre enjoys full occupancy and one of the highest average income in Spain. The reform of Larios, in Malaga, is close to completion, again enjoying practically full occupancy. In logistics, “Best II” is another stride forwards in the leadership of the Company in this sector. The best international and national operators think of MERLIN as their first option when they are analysing the possibility of expanding their presence throughout the national territory. 2019 looks set to be a very significant year for the advancement of these plans. The Board of Directors that I preside over is highly satisfied with the accomplishments during this fiscal year. My thanks for your commitment and dedication, which are further motivation for this company to continue forging the same path. This progress would not be possible without the daily effort of its employees, to whom we must once again be thankful for their involvement and commitment. They are the most productive employees in the sector in Europe, and I believe that this serves as an example of their degree of commitment to the Company. Finally, I would like to thank all the shareholders that accompany us for their commitment to this project. It is our job to ensure that we meet your expectations and that is what all our efforts are focused on.