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Colonial: Inmobiliaria Colonial SFL's Strong Operational Performance Drives Earnings Growth

Inmobiliaria Colonial SFL reported a total gross rental income of EUR 399 million, representing a 6% like-for-like growth, and EPRA earnings of EUR 211 million, a 9% increase. The company's EPRA EPS came in at EUR 0.3304, beating estimates of EUR 0.09 and confirming the guidance shared with the market. The strong operational performance was driven by a 7% year-on-year like-for-like rental growth, with rental growth in Paris reaching 9%. The release spread was 8% year-on-year, with Paris reaching 16%.

COL.MC

EUR 5.7

3.35%

A-Score: 6.1/10

Publication date: February 26, 2026

Full Report

Author: Analystock.ai

📋 Highlights
  • Strong Revenue Growth: Achieved EUR 399 million gross rental income (+6% like-for-like), EPRA earnings of EUR 211 million (+9%), and EPRA EPS of EUR 0.336.
  • Prime Market Outperformance: 7% YoY like-for-like rental growth, with Paris ERV growth at 9% and release spread of 16% in 2025.
  • Asset Value Resilience: 3% like-for-like asset value growth, EUR 12.2 billion gross asset value, and loan-to-value ratio of 37.1% post-disposals.
  • Capital Allocation Strategy: EUR 50 million share buyback program, EUR 300 million in executed disposals (prices above appraisals), and EUR 0.11 EPS boost from Alpha X initiatives.
  • Future Guidance: Targeting 34-35% EPS growth in 2026, accelerating to 2027-2028, with LTV reduction below 40% and focus on prime CBD acquisitions.

Operational Outperformance

The company's prime CBD operations have proven outperformance, with like-for-like growth of 6% in the group, 7% in Paris, and 9% in Paris ERV growth, which is 300-400 basis points higher than indexation. According to Pere Serra, "our prime CBD operations have proven outperformance, with like-for-like growth of 6% in the group, 7% in Paris, and 9% in Paris ERV growth, which is 300-400 basis points higher than indexation." This unique proposition is consistently delivering growth higher than peers in the office sector.

Financial Performance and Guidance

The company's financial performance was strong, with an 8% year-on-year increase in gross rental income and a 9% increase in EPRA earnings. The company is guiding for 34-35% EPS growth in 2026, driven by the continued execution of its disposal program and disciplined capital allocation. The company's loan-to-value ratio is expected to reduce, with a pro forma LTV of 37%, and the company aims to be below 40% LTV.

Valuation and Dividend Yield

The company's current P/E Ratio is 7.89, and the Dividend Yield is 5.26%. The P/B Ratio is 0.61, indicating that the stock may be undervalued. The company's strong operational performance and guidance suggest that the stock may be attractive at current levels. Analysts estimate next year's revenue growth at 6.3%, which is in line with the company's historical performance.

Share Buyback and Capital Allocation

The company has initiated a EUR 50 million share buyback program, which may be expanded if the discount persists and further disposals are executed. Pere Serra believes that the share buyback is accretive, considering the implicit yield of the company's assets, and that the dividend remuneration is a key aspect of the strategy. The company's disciplined capital allocation and focus on prime assets are expected to drive continued success in the prime CBD market.

Colonial's A-Score