Jefferies cuts Merlin Properties to 'hold' on rising data-centre-related risks

MERLIN Properties SOCIMI

03/08/2026 09:40

** Jefferies downgrades Merlin Properties MRL.MC to "hold" from "buy", accounting for higher risks as the Spanish real estate firm adds more capacity and funding to data centres
** "The investment case remains a tug-of-war between an exceptional (data centre) growth story and the dilution/funding overhang that is capping the share," it says
** The broker highlights a value surge in Merlin's data centre assets, up 28% LFL in H1 to €988 million ($1.1 billion), with further €321 million expected to be recognized over time
** "However, the exposure to neo-cloud operators and the promote temper the near-term rerating," Jefferies says
** It says the tenant mix on Merlin's 180MW pre-let data centres stands at around 85% neo-cloud operators, which may imply 42% default probability
** The asset value also includes €101 million of promote accrued to date, which Merlin is to pay to joint venture partner Edged Energy, it adds
** Out of 22 analysts that cover Merlin, 21 rate the stock "strong buy" or "buy" and one "hold" - LSEG data
($1 = 0.8678 euros)

(Reporting by Tiago Brandao)
((Tiago.Brandao@thomsonreuters.com;))