Advertisement
What really powers the cloud? Behind every Google search, A...
A lot of what defines a home isn’t visible at handover. I...
Private equity has played a significant role in shaping Indi...
Luxury real estate is one of the most talked-about segments ...
Airports play a much bigger role than just enabling travel -...
Spanish real estate company Merlin Properties plans to moderate the growing share of revenue generated by its data centre business to avoid overdependence on a single asset class. The company is progressing with a major investment programme across Spain and Portugal, supported by rising demand for AI infrastructure. While data centres are expected to become a significant contributor to rental income over the next several years, Merlin intends to maintain a diversified portfolio across offices, retail and logistics assets. The company also sees Portugal emerging as a key market for future expansion due to supportive policies for data centre development.
Spanish real estate company Merlin Properties is seeking to maintain a balanced asset portfolio even as its data centre business expands rapidly on the back of growing artificial intelligence-related demand.
Speaking to Reuters during the past week, Chief Executive Officer Ismael Clemente said the company intends to limit the proportion of revenue generated by data centres in the long term to reduce concentration risk. Under Merlin’s current three-phase investment strategy, data centres could contribute as much as 75% of annual gross rental income by 2032, compared to slightly more than 9% recorded in the first quarter of 2026. However, the company believes this share will eventually need to be moderated.
Merlin has already completed three of the nine data centres planned across Spain and Portugal. The company expects to invest around EUR 8 billion in the sector by 2032 as it continues to expand its digital infrastructure platform.
The growth strategy is being supported by increasing demand for artificial intelligence and cloud computing infrastructure. As a result, Merlin expects its annual gross rental income to nearly triple to around EUR 1.6 billion by 2032 compared with 2025 levels.
Despite the rapid expansion of data centres, the company’s portfolio remains diversified, with offices, shopping centres and logistics assets continuing to account for the majority of revenue. Clemente indicated that Merlin intends to maintain a more balanced mix of asset classes and will adjust investment decisions according to market conditions and property cycles.
He noted that while the current demand wave for data centres remains strong, the company aims to benefit from the opportunity while ensuring that no single segment becomes overly dominant within its business.
Merlin’s geographic exposure is also expected to evolve over the coming years. Currently, around 88% of its assets are located in Spain, while Portugal accounts for the remaining 12%. However, Portugal could represent a larger share of the company’s portfolio in the future as the country continues to support the development of AI-related data centre infrastructure.
The company has been steadily strengthening its position in the European data centre market in recent years, joining a growing number of real estate groups that are expanding into digital infrastructure to benefit from increasing data consumption, cloud services and AI-led computing requirements.
Clemente also stated that Merlin is close to securing inclusion in the MSCI Europe Index, a development that could improve the visibility of its shares among international investors and potentially support market participation in the stock.
Source Reuters
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
