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1. Company Snapshot

1.a. Company Description

Colonial is a Spanish listed REIT company (SOCIMI), leader in the European Prime office market with presence in the main business areas of Barcelona, Madrid and Paris with a prime office portfolio of more than one million of sqm of GLA and assets under management with a value of more than €12bn.

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1.b. Last Insights on COL

Inmobiliaria Colonial, SOCIMI, S.A.'s recent stock performance was driven by the sale of its stake by the Colombian billionaire Santo Domingo family, curbing their holdings in the Spanish real estate firm. This move may have led to increased liquidity and reduced supply, potentially driving up the stock price. The company's recent focus on strategic acquisitions and asset management has also contributed to its growth, as it seeks to expand its portfolio and optimize its returns.

1.c. Company Highlights

2. Colonial SFL's Strong Q3 2025 Earnings: A Closer Look

Colonial SFL reported a robust financial performance for the third quarter of 2025, with gross rental income reaching EUR 296 million, representing a 5% like-for-like growth. The company's EPRA earnings stood at EUR 156 million, up 6% year-on-year, while EPRA EPS was EUR 0.25, in line with full-year guidance. Notably, the actual EPS came out at EUR 0.3304, significantly higher than estimates of EUR 0.09. The company's strong capital structure is reflected in a loan-to-value ratio of 38.1% and a competitive cost of debt of 1.9%. With a P/E Ratio of 6.89 and a Dividend Yield of 5.7%, the stock appears to be reasonably valued.

Publication Date: Nov -15

📋 Highlights
  • Strong Operational Growth: 5% like-for-like gross rental income (EUR 296M) driven by prime asset class positioning and 9% CAGR over 3 years.
  • Financial Stability: EPRA earnings rose 6% (EUR 156M), EPRA EPS of EUR 0.25 (in line with guidance), with a low LTV of 38.1% and 1.9% debt cost.
  • Market Rental Growth: 6% in Paris/Madrid, 3% in Barcelona; EUR 54M annualized spread from 25k sqm leases, 40% in Paris.
  • Future EPS Boost: Urban projects to add EUR 0.11 (+33%) to EPRA EPS by 2028, plus EUR 47M cash flow from prime asset reversion.
  • Strategic Disposals: EUR 500M disposal plan (70% with visibility) to drive deleveraging and fund new investments, supporting EUR 0.33-0.34 EPS guidance.

Operational Highlights

The company's operational performance was driven by prime asset class segment positioning, with a 9% CAGR over the last 3 years. Rental growth across core markets was robust, with 6% growth in Paris, 6% in Madrid, and 3% in Barcelona. Colonial SFL's portfolio occupancy stands at 91%, with prime assets showing minimal vacancy. As Pere Serra noted, the company is confident in delivering its disposal plan, taking advantage of interest in the residential sector in Spain.

Growth Drivers and Strategy

Colonial SFL's focus on urban transformation projects, prime asset reversion, third-party capital initiatives, and capital recycling is expected to drive double-digit IRRs and additional EPS growth in the next few years. The company's assets under management are expected to grow from EUR 400 million to over EUR 600 million in the short term, contributing EUR 0.02 to EUR 0.03 to EPRA EPS in the midterm. With a strong business model generating 5% like-for-like growth, the management team is focused on EPRA earnings growth with a 9% CAGR over the last 3 years.

Valuation and Outlook

Analysts estimate next year's revenue growth at 6.4%. With a P/B Ratio of 0.57 and an ROE of 7.82%, the stock appears to be undervalued. The company's guidance for the year is EUR 0.33-0.34 EPS, with a growth profile that can generate over EUR 150 million of future rents through the new pipeline and reversion. The loan-to-value ratio is expected to remain stable, with a holistic approach to leverage and a focus on maintaining the investment-grade rating.

3. NewsRoom

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Is Colonial (BME:COL) Undervalued? Examining the Latest Signals for Investors

Sep -11

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Is Colonial Fairly Priced After Recent Earnings and 8.7% Year-to-Date Gain?

Sep -09

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Inmobiliaria Colonial SOCIMI SA (FRA:HSC2) Q2 2025 Earnings Call Highlights: Strong Cash Flow ...

Jul -25

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Inmobiliaria Colonial SOCIMI SA (WBO:COL) Q4 2024 Earnings Call Highlights: Strong Cash Flow ...

Feb -28

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Colombian Billionaires Exit Bet on Spanish Commercial Property

Nov -22

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Inmobiliaria Colonial SOCIMI SA (FRA:HSC2) Q3 2024 Earnings Call Highlights: Strong Earnings ...

Nov -15

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.53%)

6. Segments

Supermarkets

Expected Growth: 4.5%

Inmobiliaria Colonial's supermarket segment growth of 4.5% is driven by increasing demand for convenience and online grocery shopping, strategic location of stores in high-traffic areas, and efficient supply chain management. Additionally, the company's focus on private label products and loyalty programs has contributed to higher sales and customer retention.

Liquor

Expected Growth: 4.8%

Inmobiliaria Colonial's 4.8% growth in Liquor segment is driven by increasing demand for premium products, strategic partnerships with distributors, and expansion into new markets. Additionally, the company's focus on digital marketing and e-commerce platforms has improved brand visibility and customer engagement, contributing to the segment's growth.

Other

Expected Growth: 5.2%

Inmobiliaria Colonial's 5.2% growth is driven by increasing demand for prime office spaces in Madrid and Barcelona, coupled with the company's strategic asset rotation and refurbishment initiatives. Additionally, the SOCIMI tax regime benefits and a strong balance sheet have enabled the company to capitalize on acquisition opportunities, further fueling growth.

7. Detailed Products

Residential Rentals

Inmobiliaria Colonial, SOCIMI, S.A. offers a wide range of residential properties for rent, including apartments, houses, and buildings, catering to individuals and families.

Commercial Rentals

The company provides commercial spaces for rent, including offices, shops, and warehouses, suitable for businesses of all sizes and industries.

Property Management

Inmobiliaria Colonial, SOCIMI, S.A. offers comprehensive property management services, including maintenance, repairs, and administrative tasks, for property owners and investors.

Real Estate Development

The company develops and invests in new real estate projects, including residential and commercial developments, in prime locations.

Asset Management

Inmobiliaria Colonial, SOCIMI, S.A. provides asset management services, including portfolio optimization, risk management, and investment strategies, for real estate investors and owners.

8. Inmobiliaria Colonial, SOCIMI, S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is low for Inmobiliaria Colonial, SOCIMI, S.A. due to the unique nature of its real estate investment and management services.

Bargaining Power Of Customers

The bargaining power of customers is medium for Inmobiliaria Colonial, SOCIMI, S.A. as it has a diversified portfolio of clients, but some clients may have significant negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low for Inmobiliaria Colonial, SOCIMI, S.A. as it has a strong market position and can negotiate favorable terms with its suppliers.

Threat Of New Entrants

The threat of new entrants is medium for Inmobiliaria Colonial, SOCIMI, S.A. as there are barriers to entry in the real estate investment and management industry, but new entrants can still disrupt the market.

Intensity Of Rivalry

The intensity of rivalry is high for Inmobiliaria Colonial, SOCIMI, S.A. as it operates in a competitive market with several established players, and the company needs to differentiate itself to maintain its market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 51.54%
Debt Cost 3.95%
Equity Weight 48.46%
Equity Cost 10.03%
WACC 6.89%
Leverage 106.37%

11. Quality Control: Inmobiliaria Colonial, SOCIMI, S.A. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
CTP

A-Score: 6.6/10

Value: 4.8

Growth: 6.8

Quality: 6.7

Yield: 6.2

Momentum: 6.5

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
SFL

A-Score: 6.2/10

Value: 3.3

Growth: 3.6

Quality: 6.3

Yield: 6.9

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Colonial

A-Score: 5.8/10

Value: 5.5

Growth: 4.1

Quality: 6.6

Yield: 6.9

Momentum: 3.5

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Gecina

A-Score: 5.7/10

Value: 5.7

Growth: 3.2

Quality: 4.4

Yield: 8.8

Momentum: 2.5

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Derwent London

A-Score: 4.8/10

Value: 4.5

Growth: 2.3

Quality: 6.6

Yield: 6.2

Momentum: 1.5

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
CA Immobilien

A-Score: 4.8/10

Value: 3.0

Growth: 2.3

Quality: 4.7

Yield: 8.8

Momentum: 2.5

Volatility: 7.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

5.22$

Current Price

5.22$

Potential

-0.00%

Expected Cash-Flows