In the first quarter, Colonial continues to demonstrate a robust performance in the Ibex-35 landscape, reporting total revenue of 90 million euros, an 11% rise from the same period a year earlier. Net profit shows resilience as well, edging up by five percent to 38 million euros. These figures reinforce a steady trajectory that aligns with the company’s ongoing strategy and market positioning, a sentiment echoed by Juan José Brugera, who serves as the company’s president and publicly welcomed the solid quarterly results.
Colonial, focused on office acquisitions and leasing, closed the initial quarter with notable activity. A total of 25 lease contracts were executed, encompassing a combined floor area of 45,860 square meters, with new tenants representing about 60% of the portfolio. Pere Viñolas, the group’s chief executive, highlighted that the occupied area grew noticeably from 40,000 to 45,000 square meters quarter over quarter. He pointed out that this momentum marks a strong start to 2022 and sets a positive tone for the year, suggesting that the market for well-located offices remains highly competitive, and that Colonial is well positioned to benefit from this demand.
Occupancy across Colonial’s portfolio stands at 97%, a level considered near full capacity within the sector, reflecting a modest improvement of 1.15 percentage points versus the end of the previous year. Regional performance shows high occupancy in Paris at 99.6%, strong figures in Madrid at 97%, while Barcelona sits at 84%. Viñolas provided a candid assessment of the Barcelona situation, noting temporary market imbalances but emphasizing that supply-demand dynamics favor Paris and Madrid. He explained that there is little new supply entering Paris, while Madrid experiences substantial demand, and that Barcelona faces comparatively higher supply, yet the overall trend remains favorable when looking at year-end 2022 versus the present period.
Beyond topline growth, the company has also benefited from inflation-linked rent adjustments embedded in lease renewals, with contract updates contributing a 6% uplift. Rent escalations during renewal cycles further supported earnings, also running around 6%. Viñolas highlighted that these gains have been especially pronounced in Paris, where the asset portfolio saw a notable 10% increase, underscoring Colonial’s ability to translate market conditions into tangible value for shareholders and positions the company as a leading real estate operator within the Ibex-35 by market capitalization.
Looking at new leases, Colonial managed to secure contracts that achieved roughly a 3% premium over the market average. In Madrid, the premium climbs to about 8%, reflecting strong demand for high-quality, strategically located office properties in the capital and a favorable leasing climate that rewards superior locations and amenities. This performance underscores the group’s capability to capture premium rents in markets with robust demand, supporting higher profitability across its portfolio.
Colonial’s active asset disposition remained a strategic priority in the first quarter. The largest sale during the period involved three central Madrid buildings, sold to business executive Rafael González-Vallinas for approximately 300 million euros: Almagro 9, José Abascal 56, and Miguel Ángel 11. The executive team signaled that more opportunities could arise in the coming weeks or months, even as the bulk of the planned divestitures has already been completed. This capital recycling approach helps reinforce the balance sheet while reallocating capital toward higher-return opportunities.
From a financial health perspective, the company reduced its leverage, trimming debt by 336 million euros. The loan-to-value ratio fell to 36.8%, a improvement praised by management. Both the chairman and CEO highlighted a recent Standard & Poor’s assessment that assigned Colonial a BBB+ credit rating, claiming it as the strongest credit standing among Spanish real estate peers. The message conveyed was clear: the credit profile supports ongoing investment and growth while maintaining prudent financial discipline.
On liquidity, Colonial reported liquidity of 2,473 million euros, combining cash on hand with available credit lines. This liquidity buffer provides ample capacity to meet debt maturities through 2026, with all outstanding debt carrying fixed rates and an average annual cost of 1.67%. The combination of healthy cash generation, conservative financing terms, and a strong credit rating positions Colonial to navigate market cycles while pursuing strategic expansion and selective acquisitions within its core markets.