MERLIN Properties Annual Report 2021

MERLIN Properties | 87 ALTERNATIVE PERFORMANCE MEASURES In accordance with the recommendations issued by the European Securities and Markets Authority (ESMA), the alternative performance measures (“APM”) are described as follows GLOSSARY Average debt maturity (years) This APM represents the average debt duration of the Company until maturity It is a relevant metric as it provides the investor with the relevant information about the repayment commitments of the financial liabilities It is calculated as the addition of the pending years to maturity of each loan multiplied by its outstanding loan amount and divided by the total outstanding amount of all loans Given the nature of the metric, it is not possible to reconcile it with the Group financial statements but the main information is available in the consolidated financial statements Average passing rent It represents the rent per square meter per month at which an asset or category of assets are rented at a moment in time The average passing rent is a relevant performance metric as it shows the implied rents of all the prevailing lease contracts of the company at a moment in time per square meter and per month enabling the comparison with market rents Given the nature of the metric, it is not possible to reconcile it with the financial statements Release spread Difference between the new rent signed and the old prevailing rent on renewals (same space, same tenant) or relets (same space, different tenant) during last twelve months The release spread provides the investor with a view on the prospective rental behaviour when negotiating with the tenants It is calculated on a lease by lease basis and therefore it is not possible to reconcile it with the financial statements Rents Like-for-like Amount of the gross rents comparable between two periods. It is calculated on an asset by asset basis excluding from both periods the rents derived from acquisitions or disposals executed in such periods as well as other adjustments like early termination penalties from lease contracts We consider the rental like-for-like growth a relevant metric to understand the evolution of rents of an asset or an asset category It is calculated on an asset by asset basis and therefore it is not possible to reconcile it with the financial statements Gross annualized rents Passing rent as of the balance sheet date multiplied by 12 We consider the gross annualized rents a relevant performance metric as it represents the total amount of rents of the prevailing lease contracts at a given time enabling the calculation of the return of each asset (Gross yield) Given the nature of the metric, it is not possible to reconcile it with the financial statements GAV The GAV is the Gross Asset Value as of the latest available valuation report plus the advanced payments of turn-key projects and developments at cost The GAV is a standard valuation metric for comparison purpose, recognized on a global basis in the real estate sector, and performed by an independent external appraisal The reconciliation with the financial statements appears in Section 5 of this report (Notes to the consolidated balance sheet) Gross yield It represents the return of an asset or category of assets. It is calculated by dividing the annualized gross rent between the latest available GAV Wault Weighted average unexpired lease term, calculated as the number of years of unexpired lease term, as from the date balance sheet, until the lease contract first break weighted by the gross rent of each individual contract We consider the Wault a relevant metric as it provides the investor with the average term of secured leases and gives a sense of risk or opportunity to renegotiate the prevailing lease contracts Given the nature of the metric, it is not possible to reconcile it with the Group financial statements Revenues Is the addtion of the total gross rent income, and the other operating income excluding extraordinaries The reconciliation with IFRS appears in the table thereafter