Merlin Properties: As the dust settles; assessing what's priced in

Merlin's shares have fallen c.30% since their end-June peak on the back of a series of concerns, including the sustainability of AI demand, the Spanish Data Centre (DC) Royal Decree, and more recently concerns on Merlin's main DC tenant Coreweave. In this note, we assess the Sum Of The Parts of Merlin and conclude that the current share price not only attributes no value to the group's future upside potential of the DC pipeline but also puts a 32% discount to the book value of the existing DC assets (including WIP/land). We find this exaggerated and see a good entry point at current levels. Coreweave currently accounts for 80% of Merlin's operational or pre-let DC assets and less than 9% of Merlin's total existing rents;