Colonial closed the first quarter of 2025 with recurring net income of 55 million euros, an increase of 16% compared to the same period in 2024. The growth was driven by a 4% increase in like-for-like rental income and an improvement in financial results and structural expenses.
Gross rental income amounted to 97 million euros, up +1% year-on-year and +4% like-for-like, while rental EBITDA was 84 million euros, +5% higher than in the same quarter of the previous year, also on a like-for-like basis.
According to Colonial's Chairman, Juan José Brugera, ‘the company closed an excellent first quarter, increasing its results by +16%. Our strategy in the Prime Asset Class allows us to achieve high growth in rents, up to 7% above the market average, which increases our recurring result, profitability and allows us to confirm our annual EPS target for 2025’.
Pere Viñolas, CEO, said: ‘Looking to the future, we continue with our new growth cycle through a portfolio of urban transformation projects of more than 100,000 sqm and the new investment of 200 million euros in Deeplabs, the leading Science & Innovation platform. We remain committed to new investments in view of the recovery of the real estate cycle in Europe, all within the framework of a solid capital structure, as shown by the BBB+ credit rating by S&P, reconfirmed in April this year’.
Market performance
In terms of market performance, Madrid recorded a 21% year-on-year growth in rental income, driven by new acquisitions and improved performance in assets such as Recoletos 37, Discovery Building, Miguel Ángel 23 and Martínez Villergas. On a like-for-like basis, revenues in the capital increased by 5%. Barcelona also showed progress, with a 2% year-on-year increase, and stable rents on a like-for-like basis. In Paris, revenues were down 5% year-on-year due to the Condorcet and Haussmann properties going into refurbishment. However, like for like, rents in the French capital grew by 4%, thanks to the good performance of assets such as Edouard VII, #Cloud, Cézanne Saint Honoré and Washington Plaza.
Leasing and rents
Colonial signed 22 leases in the quarter, representing a total area of 32,461 sqm, +61% compared to the same period last year. Of this figure, 17 contracts were for office space (31,928 sqm). Of this figure, 54% of the contracting was renovation or overhaul (17,565 sqm) and 46% new contracting (14,896 sqm). The highest volume was recorded in Barcelona, with 18,792 sqm.
Rents signed in the quarter were 7% above market value (ERV 31/12/2024), with growth of +9% in Madrid, +7% in Paris and +6% in Barcelona. In the case of rented space, the release spread was +11%, with an outstanding +20% in Paris. The maximum rents signed reached 1,050 euros per sqm per year in Paris, 36 euros per sqm per month in Madrid and 28 euros per sqm per month in Barcelona.
The group maintains an average occupancy rate of 95% in its office portfolio. In Paris, occupancy reaches 100%, in Madrid 93% (with 98% in the CBD area) and in Barcelona, occupancy excluding newly opened assets such as Diagonal 197, Torre Marenostrum and Sant Cugat, stands at 95%.
New science and innovation platform
On 22 April, Colonial announced the creation of a Joint Venture with Stoneshield Capital to launch a pan-European platform of Science and Innovation (S&I) assets. The company has invested 200 million euros in Deeplabs, a specialist operator that manages more than 138,000 sqm in Madrid and Barcelona. The initial portfolio is worth €400 million, and the medium-term objective is to reach €2.4 billion in assets under management, with a planned presence in cities such as Paris, Berlin, Amsterdam, Munich, Lisbon and Cambridge.
Financial structure
At the end of the quarter, Colonial had liquidity of 3,041 million euros, an LTV of 36% and net financial debt of 4,442 million euros. The spot financial cost of gross debt is 1.77% and 1.54% for net debt.
In April, S&P reaffirmed its BBB+ rating with stable outlook for Colonial and SFL, while Moody's upgraded its rating to Baa1 in September.
In January 2025, the company issued 500 million euros in green bonds, maturing in 2030. The transaction was oversubscribed 8.1 times. The coupon was 3.25% (yield of 3.41%) and, after hedging, the average effective rate was 2.75%. The funds will be used to repay debt maturing in the near term.
