With valuations no longer as attractive, it''s a good opportunity to review the outlook for the largest REITS in Spain, Colonial and Merlin Properties, and also take a look at Melia Hotels given its Real Estate asset model. We downgrade Colonial to Underperform on worsening LfL KPIs and limited growth levers, upgrading Melia Hotels to Neutral as we see limited valuation downside from here, and reiterating our Outperform on Merlin Properties, liking its growth angle on Data Centres. It''s all about sub-segment exposure, pipeline contribution, leverage and valuation We set our sub-segment outlook for 2024 (bullish on hotels and logistics, less positive on offices and Shop. Centres). Looking at company-specific earnings growth, leverage and valuation, we see Merlin offering the most attractive risk-return profile, Melia to benefit from pricing dynamics and Colonial''s position not attractive at this point, only ranking well in leverage, thanks to its ability to rotate assets. Colonial: Risk/Reward skewed to the downside - Downgrade to Underperform. A more bearish view on offices and the downside risk we see on rental income means we downgrade FFO estimates by 18% on average for 2024-26. We thus lower our TP to EUR5.4. Melia Hotels: Good operating dynamics and limited valuation downside - Upgrade to Neutral Melia is enjoying all-time high room rates, and much of the margin erosion and financing cost step up is already in the past. Trading at a 30% discount to peers limits valuation downside, though unwillingness to sell assets delays any potential rerating. TP lifted to EUR6.4. Merlin Properties: Betting on Data Centres - Outperform reiterated The traditional business is performing as never before, while the story has an attractive Data Centres growth angle. We expect FFO CAGR of c.10% 2023-26, and the stock price to move closer to NTA as Data Centres start contributing. We raise outer year estimates on higher rental growth from Data Centres and bring...