Merlin Properties to See Accelerated Growth as it Targets Data Center Expansion

Spanish REIT Merlin Properties (BME: MRL), traditionally focused on office and retail spaces, expanded into data center operations last year with facilities in Madrid, Barcelona, and Bilbao, each having an installed capacity of 3 MW out of a total 60 MW capacity. Merlin plans to increase this capacity by the end of 2024. The data centers are built in partnership with U.S. tech infrastructure specialist Edged Energy. In February, Meta, the parent company of Facebook, reportedly leased these data centers from Merlin, which are custom built to meet Meta’s specific technological requirements. These data centers prioritize sustainability, with a Power Usage Effectiveness (PUE) of 1.15, and use 100% renewable energy.

Driven by the growing demand for artificial intelligence (AI) and data warehousing demands, Merlin is now expanding its data center footprint. The company is currently developing a fourth data center in Lisbon, Portugal. According to Visible Alpha consensus, Merlin’s data center operations are forecasted to generate €13.8 million in gross rental income in 2024, a significant increase from the €0.5 million generated in 2023. By 2030, data centers are projected to contribute approximately 20% to Merlin’s overall gross rental income, up from an estimated 3% in 2024. Along with data centers, the company is also expected to see sustained growth in its logistics division.