Interview with the Chairman and CEO

2023 has been a year characterised by complicated macroeconomic environments. How has Colonial performed in this environment?

J. J. Brugera: In a macroeconomic environment still marked in 2023 by instability and rising interest rates, which clearly affected investment deactivation, Colonial’s business model has demonstrated not only its resilience but also its capacity to grow its operating fundamentals above the market average. 

Occupancy of its buildings is close to full occupancy at 97%, rising to 100% in Paris, resulting in rental income growth of €377m. These increases have also been achieved by capturing the highest rents in the market, above the market average in renovations and new assets placed on the market.

Supported by these growth levers, Colonial has surpassed the most optimistic forecasts for this year to take its recurring earnings per share EPS to 0.32 euros, which means raising the highest recurring profit in the company’s history to €172m.

At the same time, the Group’s EBITDA grew in double digits to €316m, a record in absolute terms but also as a percentage of revenues. The extraordinary performance of the recurring profit will, in turn, allow Colonial’s Board to propose to the Annual General Meeting an increase in the dividend (+8%) to €0.27 per share, bringing the dividend to €144m, to be distributed to its shareholders.

The solid operating fundamentals of Colonial’s asset portfolio have become a key element in containing the adjustment in the value of its assets in an environment of declines on a general trend that began in the second half of 2022 with the rise in interest rates and the consequent impact on value and investment. The higher cash flows achieved through indexation and rent growth, together with the successful delivery of projects, created Alpha value creation, which partially offset the value correction due to the yield expansion.

Throughout 2023, the resilience of the value of Colonial’s assets and their attractiveness for investment has been evidenced by Colonial’s high capacity to recycle capital through divestments all closed at prices in line with valuation. In total €723m, bringing the company’s liquidity to €2,900m, reinforcing the extraordinary solidity of its liabilities and its future investment capacity.

Looking ahead to 2023, as CEO, what points would you add to those mentioned by the chairman?

P. Viñolas: First of all, the strong performance of the operating business should once again be highlighted: the prime asset portfolio has captured a high volume of contracts at record high levels, 7% above the average volume of the last three years. Rental prices in these contracts have accelerated to levels of +11% in the last quarter of the year.

These rental growth rates are a clear reflection of the trend of market polarisation, characterised by a demand that prioritises top quality Grade A product in the CBD.


Our portfolio’s occupancy level is 97%, one of the highest in the sector. The Paris portfolio, in particular, reached full occupancy with a ratio of 100%.

Secondly, I would highlight the increase in recurrent earnings for the year driven by high revenue growth: the recurrent result has increased on the back of solid revenue growth. This increase is the result of a combination of several factors: 1) the ability to capture the effect of indexation, 2) rent growth and occupancy increase complemented by 3) additional revenues from project delivery.

I would also like to highlight that the Colonial Group, during the last quarter of 2023 and the beginning of 2024, has closed divestments for a volume of €150m with a premium of +5% over the last valuation. These operations are part of a new Colonial Group divestment programme to continue through 2024 with additional asset sales in order to recycle capital and maximise shareholder value creation.

In terms of your decarbonisation strategy, how do you think the implementation of a decarbonisation strategy can benefit your company’scompetitiveness and success?

P. Viñolas:

The most important trend is undoubtedly climate change: being able to proactively adapt to the challenges involved will not only mitigate their risks but also offer great business opportunities. Our commitment to quality has meant that Colonial has been ahead of the sector in this area for many years, and today we have undoubtedly one of the most sustainable property portfolios in Europe. 

Our commitment to contribute to carbon neutrality is firm, aspiring to maintain a clear leadership in sustainability.

This leadership is reflected in the scores achieved in the different ESG ratings: Sustainalytics has awarded us a score of 6.2 points, placing us in the Top 5 of the 443 listed real estate companies analysed, and CDP (Carbon Disclosure Project), one of the most demanding ratings in climate change management, has once again awarded us the highest rating and placed us among the top 1.5% of companies in all sectors worldwide and as one of the main leaders in the real estate sector.

The Colonial Group’s strategy involves a firm commitment to the decarbonisation of its portfolio, a progressive reduction of its consumption and a responsible and efficient use of resources, resolutely promoting a circular economy throughout the real estate value chain.

In 2023, the Colonial Group developed a new climate strategy, which was much more ambitious than the previous one, not only in terms of emission reduction targets, but also in terms of scope, developing and identifying actions for the entire carbon footprint of the Group’s entire value chain.

This strategy acts on three main strands:

# Pillar A – Reduce emissions: Consists of reducing the company’s carbon footprint for all categories by developing and identifying actions to reduce emissions across the Group, reaching maximum energy efficiency.

# Pillar B – Avoid emissions: Consists of helping avoid third party carbon footprint emissions by offering products/buildings with features that offer an efficient option to avoid carbon emissions.

# Pillar C – Carbon removal through the development of sinks, i.e. natural elements or processes that absorb and store carbon, thus helping to mitigate climate change by absorbing carbon dioxide from the atmosphere.

Colonial also wishes to show its continued support for the United Nations Global Compact, signed in 2019, as well as for renewing its commitment to the 10 principles relating to human rights, labour rights, the environment and the fight against corruption.

From a more strategic point of view, what are the company’s main challenges and opportunities?

J. J. Brugera: 2023 has been a year of value adjustment for the whole sector; in this context, Colonial has maintained an excellent operating performance.

We closed the year with strong cash flow growth based on a portfolio of assets with high occupancy levels that allow us to capture rent increases in the high end of the market. Our commitment to creating high-end products in the city centre has once again enabled us to achieve operational results significantly above those of other European real estate companies.

 In an environment of macroeconomic uncertainty and rising interest rates, Colonial has demonstrated the high resilience of its prime model to continue driving growth and generating value.

Committing to a strategy of long-term sustainability excellence is a clear competitive advantage and a catalyst for value creation: properties with high sustainability standards rent earlier, at higher rents, and generate more interest in the investment market, thus generating a value premium.


Este sitio utiliza cookies propias y de terceros para mejorar tu experiencia en la página. Para habilitar o restringir las cookies activas o para obtener más información, haz click en personalizar la configuración.
Accept all cookies