MERLIN Properties Annual Report 2020 / English

Mr. Javier García-Carranza Non-Executive Chairman Dear shareholders, It is my pleasure to present to you MERLIN Properties’ 2020 Annual Report, which includes the annual financial statements and all of the information relevant to the 2020 fiscal year. 2020 will go down in history as the year of the Covid-19 pandemic outbreak. It has been a very complicated year, with unprecedented consequences in the economic environment. According to the last OECD report, the estimated fall in GDP for Spain for the year is 11.6%. In this context, the Company after a first quarter that exhibited very compelling figures, had to quickly adopt a series of measures focused on capital preservation and helping our tenants, measures that meant revising the forecast for the year. On one hand and in order to preserve capital, our value creation plans Landmark, Flagship and Best II & III were revised and all projects were put on hold except the ones already initiated or with pre-lets secured. Additionally, the 2019 complimentary dividend was reduced, and the Board of Directors and the management team lowered their compensation. On the other hand, MERLIN was the first player in the market to launch a commercial policy in order to protect and support their tenants, reaching an extraordinary level of acceptance of 92%. This policy, consisting of different rent reliefs depending on the restrictions arising from the pandemic, has ensured occupancy, extending lease maturities until at least 2021, reduced default and litigation to a minimum and has Letter from the Chairman