At present, we seem to be emerging from the pandemic, yet the European economy has still not recovered topre-pandemic levels of activity. How would you sum up the year 2021?
Juan José Brugera
We closed the year with a net profit of €474m, significantly higher than the previous year, driven by a solid recurring result and a strong increase in the value of the asset portfolio.
In addition, we have successfully executed a major corporate transaction by acquiring 16.6% of our subsidiary SFL, increasing Colonial’s exposure to the Paris prime market by nearly €1,000m.
The net asset value (i.e., the value of our shares based on the market value of our assets) is more than €6,500m, which has increased by +13% year-on-year.
Our net asset value per share reached €12.04/share and consequently the total shareholder return including the dividendpaid of €0.22/share was +9%.
The year 2021 is marked by the Colonial Group’s return to growth across all parameters.
We have signed contracts for more than 170,000 sqm, the second-largest take-up volume in the Group’s history. It is also worth highlighting the acceleration of activity in the second half of 2021 in which more than 100,000 sqm were contracted, a figure higher than the one achieved throughout the whole of the previous year. Signed rents are at the high end of the market with solid year-on-year growth.
Our net revenues increased by +3% like-for-like, driven by the Paris portfolio, which grew by +6%. As such, net recurring earnings per share increased by +15% like-for-like.
The Group’s asset portfolio has increased by +7% like-for-like, year-on-year, bringing the total value of the Colonial Group’s asset portfolio to more than €12,400m.
Colonial is renowned for its commitment to prime offices and its leadership in sustainability. How is this strategy reflected in the 2021 results?
Juan José Brugera
The Colonial Group’s corporate strategy is based on investing in prime assets in the best locations in European cities to ensure attractive and sustainable long-term returns for our shareholders and all our stakeholders.
The pandemic has once again shown the success of our strategy: our assets attract the best clients who pay high-end rents because our offices offer them high added value for their employees.
This polarisation effect towards prime products has been consolidated in the pandemic, during which time the Colonial Group has achieved strong operational results in a difficult environment for the real estate markets. Now that real estate markets are recovering, we are the first to benefit from this growth.
An important aspect in this context is our leadership in ESG and sustainability in particular. More than 95% of our portfolio of assets in operation have the highest eco-efficiency certificates (BREEAM/LEED), this level of eco-efficiency is unique in the European sector.
Colonial also wants to show its continued support for the United Nations Global Compact, signed in 2019, as well as the renewal of its commitment to the 10 principles concerning Human Rights, Labour Rights, the Environment and the fight against corruption.
In terms of our carbonisation strategy, we are clearly leading the sector. The Colonial Group has obtained the highest rating in decarbonisation management from the prestigious CDP (Carbon Disclosure Project): only 12 real estate companies worldwide have achieved this level of excellence, only 5 of which are in Europe, with Colonial being the only real estate company which specialises in offices
The Colonial Group’s high standards in eco-efficiency together with a strong commitment to decarbonisation are an important element of our Corporate Strategy. It is clear to us that they represent a competitive advantage and are complementary to providing our clients with the best services and workspaces.
The Board of Directors has approved a new decarbonisation plan that will allow us to reach carbon neutrality by 2030, 20 years earlier than anticipated in our first strategic sustainability plan.
In early 2022, this plan was scientifically verified and accredited by the Science Based Targets Initiative, confirming our ambitious target.
At the beginning of 2022, thanks to our portfolio of offices with the highest levels of eco-efficiency, we converted all of our bonds (more than €4,500m) into Green Bonds. As a result, we are the first and only company in the IBEX35 with all its bonds classified as Green Bonds. This consolidates our position among the leaders in the European real estate sector.
We are committed to creating and delivering the best products for our clients through initiatives such as the project pipeline, the renovation program and recurrent investment in our operating portfolio. We are also committed to technology and digitalisation to consolidate our leadership.
The results are clear: top-quality clients with high loyalty rates, taking advantage of the added value provided by our spaces.On this basis, we have achieved rental price increases, revenue growth, asset value increases and an attractive return in terms of net asset value (NAV) for all our shareholders.
You mentioned that 2021 was a return to growth. What does this mean for the future of the Colonial Group?
Juan José Brugera
We are well positioned with our diversified prime portfolio in Paris, Madrid and Barcelona and we will continue to attract the best clients.
Several assets in our project portfolio and renovation program enter into operation this year, securing significant additional revenue.
We will also reap the full benefit of our acquisition of a 16.6% stake in our subsidiary Société Foncière Lyonnaise, which was only registered in the last quarter of 2021.
We have bought back assets that will provide us with additional income: Danone’s headquarters in Barcelona and Amundi’s headquarters in Paris.
Ultimately, we are once again looking for attractive growth opportunities for our shareholders.
Based on all the initiatives mentioned by the Chairman, we expect strong growth in the recurring earnings per share over the next two years.
In terms of asset value, we are making progress in maximizing capital gains from our project portfolio and our renovation program.
Following a cycle of the disposal of non-strategic assets, we have prepared the Company for strong future growth through our asset portfolio and new acquisitions.