Constitution of Inmobiliaria Colonial and its consolidation in the Spanish property sector.
Inmobiliaria Colonial was constituted in December 1946 by the Banco Hispano Colonial, a financial institution that had actively participated in the economic history of the country. The Company was founded with the objective to manage the important property assets of the Banco Hispano Colonial, as well as the property assets provided by other financial institutions and individuals.
In the framework of the construction boom, which began in the 1960’s, Inmobiliaria Colonial developed an important innovative project known as Barcelona 2, integrating more than 1,000 homes and business premises for rent. This project was an important impulse to the real estate repositioning in the area, which is currently considered one of the most exclusive areas in the city, to rent buildings and prime offices in the Central Business District (CBD).
In the 1970’s and 80’s, Inmobiliaria Colonial progressively consolidated its position in the Spanish property sector.
Flotation on the stock exchange
Acquisition by “la Caixa” and flotation on the stock market
Acquisition by “la Caixa” and flotation on the stock market
In 1991, “la Caixa” acquired a majority stake in Inmobiliaria Colonial, up to then under the control of the Banco Central Hispanoamericano. The entrance of “la Caixa” resulted in the contribution of their business premises and buildings amounting to a surface area of more than 500,000 sq m.
At that moment, Inmobiliaria Colonial hired a new management team that started a repositioning and streamlining process for its asset portfolio, which led the Company to center its strategy on the business of renting prime office buildings located in the central business districts of Madrid and Barcelona. At the same time, they started a selective and profitable activity in the land development and residential housing businesses.
In 1999, the Company was listed on the stock market in a very successful process, with a large percentage of shares awarded to the minority tranche, reaching a free float of around 55%. The repositioning process initiated in previous years made a huge step forward after the listing on the stock market.
International expansion and growth
2004 – Acquisition of SFL
In June 2004, Inmobiliaria Colonial acquired the French property company Société Foncière Lyonnaise (SFL), a company with an important portfolio of offices located in the best business districts in Paris. This transaction resulted in the doubling of the asset value of the Group in only one year, and the concentration of its activities in the business areas of the main property markets in the Eurozone.
Through this transaction, Inmobiliaria Colonial was the pioneer in Spain to bet on a strategy focused on internationally diversified prime properties.
2005 – Contribution of assets by Mutua Madrileña
In September 2005, Inmobiliaria Colonial and Mutua Madrileña reached an agreement whereby Inmobiliaria Colonial acquired seven office buildings in the centre of Madrid, previously owned by Mutua Madrileña, which later became a reference shareholder in the shareholding of Inmobiliaria Colonial.
This agreement enabled the Company to strengthen its presence in the office market in Madrid, through a portfolio of very well-located assets in the city’s central business district.
Change in strategy and financial crisis
Change in shareholding, change in the strategy and the financial and real estate crises
2006 – Exit of “la Caixa” and Inmocoral takeover bid
In 2006, the property company Grupo Inmocaral launched a takeover bid on 100% the capital of Inmobiliaria Colonial, partially financed with bank debt.
The price of the acquisition resulted in a substantial premium over the NAV of Inmobiliaria Colonial. Once the takeover had been completed, which had an acceptance rate of 93.4%, the two companies merged which significantly increased the weight of the developer business.
2007 – Acquisition of Riofisa and 15% of FCC
In 2007, the new reference shareholder initiated a change in the corporate strategy in Inmobiliaria Colonial that culminated in the acquisition of 15% of the construction company FCC and 100% of Riofisa, a company specialized in the promotion and management of shopping centres.
Both transactions were carried out during the peak of the real estate and stock market cycles, and were fully financed with bank debt.
Restructuring of the Company
New shareholding and management team, successful turnaround and repositioning of the Company
2008 – Lenders take control of the Company
The start of the financial and real estate crises in Spain brought serious financial tensions to Inmobiliaria Colonial, with important decreases in income and in the valuation of the assets.
After long months of negotiations, the Company successfully completed the restructuring process of the financial debt, after reaching an agreement with the banks coordinating the syndicate loan. The restructuring process successfully culminated in the recapitalization of Colonial and the firm strategic bet on what had been the traditional core business of the Company: the property business. After this process, the Coral Partners fund, Eurohypo, Calyon and the Royal Bank of Scotland became majority shareholders in Colonial.
2008 – Entrance of the current management team
After the takeover by the banks, the previous CEO, Juan José Brugera, returned and was named Chairman. Together with the new CEO, Pera Viñolas, they strengthened the team with the objective to focus the strategy on a clear REIT business model and provide operational and financial stability to the Company.
2010 – Refinancing
On February 19, 2010, a new refinancing agreement was signed which enabled recapitalization and provided the Company with a viable financial structure in the long term. The restructuring process was pioneer in the property sector and became a reference for other national and international companies in the sector.
2010 – Acquisition of 30% of SIIC de Paris
At the end of 2010, Inmobiliaria Colonial, through its French subsidiary SFL, signed a strategic agreement with Realia to take a stake in SIIC de Paris. This transaction allowed them to complement the office portfolio in Paris and position Inmobiliaria Colonial as reference property company in Europe in the prime offices rental market.
2011 – 2013 Stabilization of the operating business
In 2011, Inmobiliaria Colonial returned to the path of positive results thanks to the financial restructuring and the focus of the Company towards the office rental property business. This positive result was supported by the strength of the operating business, the progressive recovery in the asset value in Paris and, for the first time since the start of the crisis, the stabilization of the value of the rental office buildings in Madrid and Barcelona. In addition, important write-offs were made and the Company put efforts into communicating its strategy to the international investment community, in order to lay the foundations to successfully carry out the recapitalization of the new Colonial.
Recapitalization, Investment Grade and the new acquisitions in Prime CBD
Capital increase, obtaining Investment Grade and new acquisitions in Prime CBD
2014– Capital increase
In May, the Company successfully completed a capital increase of €1,263 million, with the support of renowned long-term investors with international prestige, and a free float of close to 40%. The capital increase allowed for the recapitalization of the Company and the creation of a reference group of prime offices in the listed European property sector. Additionally, a new long term syndicate loan was signed for €1,040 million, with renowned creditors, being the first Spanish company since the beginning of the sovereign debt crisis to capture new financing from international institutional investors.
2015– Obtaining Investment Grade
Colonial successfully completed a bond issue of €1,250 million in May 2015, which was a transaction without precedents in the Spanish property market. Colonial was the first listed Spanish property company to obtain an Investment Grade rating of BBB- by Standard & Poor’s, resulting in this important milestone for the Group.
2015– Acquisitions in Prime CBD
The new capital structure has enabled the Colonial Group to carry out the first acquisitions of assets since the beginning of the crisis, strengthening its position as a property owner of prime office buildings in the CBDs of Paris, Madrid and Barcelona. The acquisition policy reinforces the industrial model of the Company, which is based on the transformation and repositioning of Prime Factory buildings, attracting the best clients at the maximum rental prices in the market. In particular, Colonial has acquired four office buildings in the centre of Madrid and one in the Paris CBD.