Ladies and gentlemen, welcome to Colonial SFL full year 2025 results presentation. The management of the company will run you through the presentation. That will be followed by a Q&A session. You can ask a question by phone by pressing star 5 on your telephone keypad. I would now like to introduce Mr. Pere Viñolas, CEO of Inmobiliaria Colonial SFL. Please, sir, go ahead.
Thank you. Good afternoon. This is Pere Viñolas speaking. Welcome to the 2025 full year results presentation. It is a pleasure to share with you the results of the company for 2025. We are going to run you through this immediately. There are 2 things that we would like to do today. One is report to you these results, this excellent set of results. Second, also inform you about relevant matters, recent events, and the strategic framework that the company is using to run ahead its strategy. I'm on page 4 of the presentation. Let me start you directly with the highlights of the results of our company for 2025. As you will see, we believe that these are outstanding operating results with solid execution of the disposal program. Main highlights.
In terms of cash flow and cash flow growth, we are presenting a total gross rental income of EUR 399 million for 2025, with a very impressive 6% like-for-like growth attached to this. EPRA earnings of EUR 211, 9% more, and an EPRA EPS of EUR 33.6. That is confirming the guidance that we've been sharing with the market in the past. In order to produce this cash flow growth, we've been able to deliver an excellent operational outperformance. Rental growth, in terms of ERV growth, is 7% year-on-year, like-for-like. It's particularly remarkable that this 7% becomes a 9% if we talk about Paris.
The re-leasing spread is 8% year-over-year for the group, 16% in Paris, and the occupancy, it's 92%, remaining at the standard high levels that the company is used to. Translated into asset value growth, the gross asset value grows 3.0 like-for-like, reaching a new figure of EUR 12.2 billion. The NTA, the net tangible asset, is now EUR 6.1 billion. The net tangible assets per share becomes now EUR 9.70 per share. This is also supported by relevant capital recycling activity. We will share more details today about recent events regarding this strategy, but the main headline would be: disposal program on track, EUR 300 billion delivered year-to-date, everything in line and confirming appraisal values.
As a result of that, LTV 37.1%, and always with a contained financial cost that is 1.91%. This would be the highlights of the results that we will be sharing with you in detail immediately. It is important today also to provide a little bit of framework and also information about recent events that provide additional light into this recent performance. I'm on in page 5. First of all, as I said, no, these results are proving that prime asset class are delivering a strong rental growth, which is, number one, superior to pricing power, more than 400 basis points above indexation. It is also clear that these results are not only very good in absolute terms, but also in relative terms to our peers. 7.2% like-for-like growth for Colonial SFL in Paris.
For the group, 5.8%, any peer well below this performance. This first message is our positioning is delivering consistently superior growth. Moreover, we would like to share with you some additional news on our progress in other directions, such as the disposal strategy. We would like to announce today that the disposals have reached, as I said, a EUR 300 million a year figure. This is based most importantly on the fact that we recently executed the sale of a landmark asset in Paris, 83 Marceau, that we have sold at, roughly speaking, EUR 240 million. That is in line with appraisal values. That is, roughly speaking, 4% or even below in terms of yield. These are additional news that we would like to share with you today.
As a result of that, the group has been having progress in the deleveraging of its capital structure. Group pro forma LTV is coming down 105 basis points based on the LTV, or 156 basis points if we use the EPRA LTV measure. Good set of results, and additionally speaking, very additional good news regarding recent transactions. Page 6, just to illustrate these headlines, you can see the traditional footprint of Colonial SFL in different markets. Particularly, I would like to highlight, where do we finish the year in terms of rental growth? 9% Paris, 6% Madrid, 5% Barcelona. We'll come back to this, and we will be particularly more detailed in the performance of certain markets, such as Paris?
As I was saying, in page 7, besides the results we are presenting today, we are confirming our execution of the disposal program. It's now EUR 300 million executed below 4% yield. Remarkable transaction, the one that we are announcing today on 83 Marceau, about EUR 240 million, in line with appraisal values. Good progress in the other fronts, related to non-core office products or assets in Madrid. Also, good progress on the residential divesting. This will be the highlights for today. Now, we will enter into the presentation of results, later on, I will come back with some remarks on the strategic positioning of the company.
Now, we will go first through the explanation of what's been happening on the operational front, and later on, we will see the consequences of this in the financial KPAs, KPIs of the company. As usual, I have with me, Carolina Gagne, Chief Corporate Officer of Colonial, and Carlos Comer, Chief Corporate Development Officer of Colonial SFL. Please, Carlos, go ahead with the next section on portfolio management.
Thank you very much, Pere. We are now on page number 9. When we look for how has been the year, we have had an extremely outstanding letting activity and letting performance. We have secured rents for a total annualized value of EUR 64 million. This is 22% higher than the amount that we had the previous year, and corresponds to 150,000 square meters. Very important to highlight that 62%, more than half of it, are letting up of new spaces, of new delivered spaces, for instance, Magnum and Haussmann. The split is well diversified, EUR 24 million in Paris, EUR 22 million in Madrid, EUR 18 million in Barcelona. Very strong activity because this is what we see when we are in the prime asset class market.
We then go into more detail on page number 10, we see that we are signing really at record high prices, setting the prime reference. In Paris, we are signing at levels of EUR 1,000 and above EUR 1,000, with significant growth on ERV on the Rue Saint-Honoré, EUR 1,200. In Washington Plaza, several contracts at EUR 1,000. Édouard VII, several contracts at EUR 1,000. Grenelle, we have really also reached EUR 1,000. This is absolutely record for this building. Previous year, it was lower, super record price. Then we signed on Champs-Élysées, a retail space at a total rent of EUR 3,700 per square meter year. All of them, well above the previous year, with strong rental growth and at very high absolute levels. Really, our segment is performing extremely well.
When we go to the other 2 cities where we operate on page 11, we see as an overall that our activity in Madrid and Barcelona has increased from EUR 32 million to EUR 40 million of total volume of contracts that have been signed in terms of annualized rents that this represent. What is extremely interesting is a lot of square meters, 60,000 square meters in Barcelona. We are seeing a significant acceleration in Barcelona. Just to remind you, last year, it were 35,000 square meters. Now, it's almost double. In Madrid, 17,000 square meters. When we look at the prices, we see very high prices, EUR 26 on the 22 at, because we are there in the super prime niche on Diagonal 197, 16% growth in ERV. EUR 34 and EUR 28 on the Diagonal, and in Madrid, levels between EUR 36 and EUR 43.
Across the board, in our product, that is the best product, we are signing contracts. When we go and take a perspective year-on-year on page 12, and look at the overall rental growth, as Pere mentioned at the beginning, we have signed, with a yearly growth, year-on-year of 7%. What is extremely interesting about this is that in every single city, our portfolio has increased significantly, the rental growth that was achieved last year. Last year, we had in Paris, 6% growth in 2024, and 2025, now we have 9% growth, so we've increased by 300 basis points. Madrid also has an acceleration, and Barcelona also. The 7%, just to keep in mind, is more than 400 basis points higher than the indexation.
We are really achieving growth above indexation. On the re-leasing spread, it remains super strong. We are having an 8% re-leasing spread. Barcelona turned from negative to positive. This market is really recovering at a very accelerating pace. Madrid, a 4% re-leasing spread, and Paris, 16%. If we take into account retail, the pure office re-leasing spread is 19%, so at the 20% levels of the previous year. A very strong pricing performance. When we now look at the project pipeline, we are also progressing well on the letting up of the project pipeline. Page 13, the 2 big elements or big assets that we have for letting up and that have been delivered recently are Magnum and Haussmann. In Magnum, we have year to date already signed EUR 14 million of rents.
It is 74% of the building. We are signing at levels of between EUR 27 and EUR 28 per square meter a month. Just to remind you, the initial underwriting when we did this project was at levels of 22, so we are really beating what we were envisaging. On Haussmann, we have already signed, and we have in place today EUR 5 million of rents, so we are approaching to the full EUR 13 million. Also, here, rental levels quite attractive, EUR 1,000 per square meter a year. The previous tenant, pre-project, was more at levels of EUR 800.
All in all, when we take all this together, we are at a occupancy of 93%, 92 at December, but with the contracts that have been signed in December, but come in force on Magnum, because the tenant steps in during the month of January, and also the floor signed in Haussmann. We are today, as we speak, at this moment, already at a 93% occupancy, so coming quite quickly at very high levels again. I will pass over to Carmina, to the financial section.
Thank you, Carlos. Now let's cover the financial performance and how this operational outperformance flows through to our financial results and capital structure. Let us start with the rental income performance at page 16. In 2025, gross rental income reaches EUR 399 million, representing 8% year-on-year increase on the operational portfolio. This growth is primarily driven by the core portfolio, EUR 21 million, which deliver 6% like-for-like growth, well above market levels. In addition, delivered projects and recent acquisitions contributed a further 2%, EUR 11 million, more than offsetting the temporary negative impact from assets entering refurbishment, such as Condorcet and Haussmann. That will be in the future rental growth upon completion.
Overall, this confirms the strength and resilience of our portfolio and the effectiveness of our leasing strategy. Looking more closely in page 17 at like-for-like performance, we clearly outperformed the market. Our 6% like-for-like rental growth is driven mainly by 3 key factors: indexation, 2.7%; a strong rental uplifts on new lettings and renewals, 1.5%; and improving occupancy as well, 1.6%. This reflects our pricing power in price DD locations, particularly in Paris, and demonstrates again, as you can see, as you have seen in, during this year in the quarterly results, that growth is not purely inflation driven, but it's driven by operational scarcity of quality product in the market where we operate and by a strong demand for prime assets in prime locations. It demonstrates the quality and prime assets outperforms.
This strong operational performance translated directly into earnings growth. In page 18, you can see EPRA earnings increasing up to EUR 211 million, up to 9% year-on-year. Without considering the disposals, the EPRA earnings would show an increase of 20%. Some specific comments in the project deliveries and acquisition, important impact on Magnum, and as Carlos was explaining, this complex has been entering into operation during 2025. Additional comments on the EUR 60 million of the additional financial costs, overheads, and others, which is a combination of different concepts, includes contribution of the third-party management fees, a saving in overheads due to the merger, and positive impact, very important, of the conversion of the 2 subsidiaries companies in France that were in the past, under the general tax regime.
Because of the fact that the asset become a yielding asset, we have been converted into SOCIMI regime, which means at the end, a permanently saving costs, saving tax for the corporate tax for the future. Consequently, EPRA EPS reaches EUR 0.336, which is towards the upper end of our guidance range. This growth is confirming the robustness of our earnings model and the quality of our cash flows. Turning into the asset value in page 19, our portfolio continues to show resilience. Gross asset value increased to EUR 12.2 billion, with like-for-like growth of 3% at group level. All geographically, all geographies, sorry, contributed positively. Paris up to 2%, Madrid up to 3.9%, and Barcelona up 5.7%.
This performance is particularly remarkable in comparison with other peers, and reflects the quality, as we have mentioned, the scarcity of the assets, of our prime assets, and the pricing power on the rent due to the strong demand for this prime office building. This valuations performance in page 20, this, and valuation yield is fully supported by transactional evidence, as you can see here in this page 20. Recent disposals and market transactions in Paris, Madrid, and Barcelona have confirmed our appraiser values with pricing at or above book value. These transactions demonstrate, again, renewed liquidity in prime markets and reinforce confidence in our reported valuation. As has been already mentioned in page 21, on capital recycling execution has significantly exceeded expectations.
Out of EUR 500 million disposal program announced in November 2025, we have already executed EUR 300 million, as was mentioned previously, representing 60% of the target in just 3 months. Importantly, prices were at or above appraiser values, and disposal yields were at or below 4%. We are as well, having progress in the disposals of residential portfolio and other non-strategic assets. Again, this confirms both market depth for prime assets and our disciplined capital allocation. As a result of this execution, in page 21, our balance sheet has strengthened materially. Loan-to-value decreases to 37.1%, less than 100 basis points. Sorry, more than 100 basis points, and EPRA loan-to-value to 45.4%, considering all of it, the last execution disposal.
This last EPRA Loan-to-Value, with an improvement of more than 150 basis points. Net debt, the net debt reduction, combined with a strong liquidity, EUR 2.2 billion, debt coverage on debt maturity is 1.6 times of the maturities for this year and for the next year, and competitive cost of debt of 1.9%, positions Colonial SFL in a comfortable zone of solvency, as our rating also demonstrates with the sector by S&P and by Moody's. Finally, page 23, on financing, we continue to benefit from our proactive hedging strategy and the hedge position taken back in 2021. Our average cost of debt stands at 1.9%, significantly below current market rates and current market cost of debt.
Nearly 100% of our debt, as you can see in the chart, is fixed or hedged, providing a strong protection in the following years against interest rate volatility and ensuring earnings visibility over the coming years. As a conclusion, these results demonstrate a combination of a strong operational growth, resilient asset values, disciplined capital recycling, and a solid balance sheet.
Thank you, Carmina. Now let me jump into the last section, which is about the strategic positioning and a strategic update of Colonial SFL, no? I think that we've seen what I consider an excellent set of results for 2025, no? Outstanding letting performance, outstanding rental growth, a very differentiated optimal performance in all KPIs. Everything related to the positioning of Colonial in the prime CBD market in Paris, Madrid, and Barcelona. If we have to give some comments on where does Colonial stand today in terms of our strategic positioning, page 25 pretends or to provide a framework to understand the pillars for Colonial SFL strategic positioning. Colonial SFL strategic positioning is based mainly on 3 pillars. Number one is our positioning in prime CBD operations.
This is the bulk. This is the most important part of who we are and what do we do. Here, our game is about delivering pricing power and differentiation, strong reversion in our markets of Paris, Madrid, and Barcelona. This is our basic positioning. Second, the strategy of Colonial is based in the additional value coming from the delivery of our Alpha X operations and initiatives, which, as you know, are not isolated. It's called Alpha X because before this 10 initiative, we've gone through 9 before, no? This is the main contributor to midterm EPS growth. To project our growth profile, it is very important to go through the understanding of these projects, and we'll try to give you comfort on where we are regarding them, and what can we expect from them in terms of superior value creation.
Finally, there's additional value coming with the portfolio management and the capital allocation process. There, we are providing additional value by divesting in those assets that are mature and are available to crystallize value. Let's remember that we sold more than EUR 1 billion of assets in the last 3 years. There is value coming from the decision of what to do with the money raised from divestment. In this capital allocation process, there are alternative uses we can do. First of all, protect and strengthen the balance sheet through deleveraging, if necessary. Second, extracting value from our prime factory portfolio. Third, investing in new investment opportunities, which have to prove that the returns honor the cost of capital in existing market conditions.
Last but not least, considering in the absence of new investments that honor this cost of capital, the potential optionality of returning capital to shareholders. I will be pleased to share with you, where do we see Colonial regarding this capital allocation process, this portfolio management strategy. As you know, it's very important to understand that the value of Colonial comes from the 3 pillars, and these 3 pillars' execution is what are translated into the EPS and DPS growth profile on the company and on the guidance that we may give on this. Finally, based on this EPS and DPS growth profile, there's also a proposal for shareholder remuneration, which we consider also key to be transparent and crystal clear about it.
Let me now walk you through where Colonial SFL is today regarding these 3 pillars and its consequences in EPS and DPS growth and shareholder remuneration. Number 1, the basic profile of the company, prime CBD operations. What is our conviction regarding prime CBD operations? I think that it's proven the outperformance in absolute and relative terms of our portfolio. We can look at it in different ways. We can look at it in terms of like-for-like growth. I clearly believe that like-for-like growth of 6% growth or in terms of GRI for the group, 7% if we talk about Paris, or 7% like-for-like growth if we talk about ERV growth.
9% in Paris, is very remarkable and unique, and it's between 300-400 basis points higher than indexation. I think that, as a value proposition, it's a very strong one. That's the first thing I would like to remark. The second is, if we are all put in the same basket, it's very difficult to highlight or identify this value proposition. It is important to understand that this unique proposition is consistently delivering like-for-like growth, that is not only important in absolute terms, but it's higher, as you can see, than our peers within our office sector. Strong conviction on the performance of our prime CBD operations. Let's be more precise about this.
Recently, people are wondering about the nature of the Paris market, and it's obvious that we should highlight our convictions and our thoughts regarding where does Colonial SFL stand in this framework of additional uncertainty regarding Paris. 2 things, or even I would say 3 things, have been said about Paris. One is take up is not super strong. Second, is not, there is not a good balance or a good balance as in the past, in terms of supply versus demand, no absorption. Third, there may be questions about rental growth and where do we stand? Where do we see our positioning? First of all, regarding supply and demand balance. You can see in this page 27, what's current outlook for the Paris market.
There are relevant parts of the Paris market where the absorption of new supply can be 2, 3 years, or even more than 3 years, in terms of the time you need to absorb the new supply. This is not what is applicable to our company and to our product. Where we are, the current number is 0.6. It's much less than a year, half a year, to absorb the new supply in the prime CBD market. In different words, if we look at the pending completions of new supply, if we talk about CBD, from 2027 onwards, it's almost irrelevant, the remaining supply that remains in the market.
I agree that this may not be the case for the wider Paris market, as it's the case also in some other European cities, but certainly there is a difference regarding the prime CBD market. If instead of talking about supply versus demand, we talk about rental growth, where take up is going, let me emphasize this number. In 2023, the rents signed above EUR 1,000, which is a proxy of the prime CBD leasing market, represented 7% of the rental market in Paris. In 2025, it's close to 40%. That is telling you there is a reinforced market bifurcation, and there is a trend that is favoring high-quality product. We have to distinguish between different markets, and in our case, our performance is significantly better than one could think of. That's about Paris.
Of course, Colonial SFL is about France, and it's about Spain. A word about Spain: it's remaining and going super strong. It's not only that take up is reflecting the fact that Spain is today the fastest growth economy in Europe. It's only that other things are happening which are working in our favor. Because of the pressure on the residential market, because of the super strong demand for new residential product, 1 million square meters of office in Spain have been converted to alternative users, mainly residential, as I say. It's not only about take up being strong, it's about supply disappearing, particularly the supply that cannot make it as an office product, no?
As a consequence of that, the vacancy on Madrid CBD and in Barcelona CBD, and particularly more on the Madrid market, is super low, and the balance between supply and demand is fantastic. As a consequence of that, rental growth is being super healthy, particularly for prime product, as you can see in the chart on the right-hand side of the page, in historical terms, current terms, and projected terms. This explains what do we think about our main positioning, which is about prime CBD product. Number 2, pillar number 2: How can we enhance growth of our company, in particular, of EPS? Well, I think it's important to reinforce the major contribution that we expect from our urban transformation initiatives in this aspect, in the aspect of the new projects under the Alpha X umbrella.
In these projects, we expect an aggregated EUR 100 million of additional top-up, additional GRI, which will be translated in additional EPS that we estimate in the range of additional EUR 0.11. What is the message regarding this layer of strategic positioning? First message, things are going well. There are different projects here. Mainly, we were working with 5 big projects. One of them had to be delivered in 2025. It's Magnum. It went very well. At the beginning of the year, the vacancy was, of course, low. At the end of the year, it's super high. It's a success. Regarding the rest of the projects, they are going according to our plans, and they will deliver according to these numbers.
The second message regarding this Alpha X project, it's the agenda attached to this project means that the most important part of the contribution to EPS growth will be 2027, 2028. This is not contributing to the EPS today, but it's a major source of EPS growth that if not around the corner, it's quite soon, and we believe that it has to be taken into account when evaluating the value proposition for Colonial. That's pillar number 2. Pillar number 3: What are we doing, and what are we going to do regarding portfolio management and capital allocation? First of all, as you know, and following previous presentations, we put the focus on the disposal program as the present condition to whatever we may do with the money. Where are we in the disposal program? Very well advanced.
Just last November, we were saying we plan to divest EUR 500 million. Today, we are telling you EUR 300 million have been executed in 3 months. We are telling you disposal prices are above appraisal values. We are telling you there's a particular deal just signed in Paris, EUR 240 million at appraisal values, circa 4% yield. In aggregate terms, all of our disposal program is at or below 4%. In the end, we are selling mature assets with forward-looking on-year IRRs below 5%, because our business, it's about doing this and then investing at higher returns. I would say that we are having good progress on this, and moreover, I would say that it's in a strategic interest to say that there are more disposals to come based on the success of this recent strategy.
What do we do with the money? Well, number one, it's enhancing our balance sheet structure, that is, a deleveraging of Colonial SFL. The immediate consequence of this disposal program is an estimated decrease of more than 150 basis points in the EPRA LTV. That's the main consequence of this portfolio management and capital allocation strategy. Second, do we see other fronts where we'll be or are being active? Are we envisaging new investments? Yes, with 2 comments on this. Subject to the present condition that they have to provide year IRR of double digit. It's second comment, in this respect, we have visibility on accretive deals of around EUR 200 million that may be executed soon. This is how much we want to do now in this framework of a capital allocation strategy.
Next, number 3, there is quite often the question, "What about your science and innovation platform? What are you doing? Where are you going? How much are you spending?" Let me start by the last, latter question. We are not investing anything else, as we said, that what we invested a year ago, number 1. We are not investing anything more. That was not the strategy from the beginning. Number 2 is things are going well. Our IRRs and yields are confirming as our business plan in this segment. Third, we would like to build up this platform mainly based or totally based on third-party capital stepping in. News are that a global institution investor is joining us with an equity contribution expected of EUR 120 million, meaning more than EUR 200 million of additional firepower. This is going well.
This is, as you know, not in the, at the heart of our strategy. It's a nice complement to our strategy, and it's going as expected, without additional efforts expected from our side. Last, what we pretend to do as a company is what any real estate company should be doing, which is doing capital recycling, selling mature assets, investing the proceeds. Considering that in the current framework, if there is relevant return attached to share buybacks, include this as an additional tool in this capital allocation strategy. In this framework, we would like to announce that a buyback program has been approved by the board, as I will detail later on with the specific figures. As a result of this strategic positioning, what we are having is a good track record of EPS growth.
This has been growing substantially and consistently in recent years, and as I said at the beginning, we confirm for 2025, the EUR 0.336 EPS in terms of cents per share results. For 2026, and bear in mind now, the profile of our generation of EPS, we are pointing initially at the guidance of EUR 0.34-0.35 for the year 2026. In terms of remuneration, and I will be more specific, based on the results for 2025, the objective of the board is to propose to the shareholder, general shareholders meeting EUR 0.32 per share to be paid during the next few months.
In these comments about EPS, let me highlight finally, the significant EPS growth acceleration that we foresee in 2027 and 2028. We believe that it will be a good decision to provide as much visibility on this as possible. Therefore, we are announcing a Capital Markets Day for next May 2026, where we'll be pleased to provide the visibility on this EPS growth profile of the company. Of course, EPS growth means also at the other side of the coin, LTV compressing. We envisage long-term LTV level for the company for 2028, below 40%. My final comment would be on shareholder remuneration.
It is obvious that we've had a fantastic profile of dividend per share growth in the last 10 years, as this chart can explain easily. We would like to announce that our remuneration proposal for this year is to pay EUR 0.32 as dividend per share. We would like to say that on top of that, 2 things will be happening. First, we will be canceling, amortizing 5 million shares that are now in our treasury stock to enhance the KPIs of the company. On top of that, the board will propose or has proposed a 50 million share buyback program that we will start in due course, now, as soon as possible, with the objective of these shares being canceled or amortized also as soon as possible.
This is the consequence of everything we said about our strategic positioning. My final remarks. I said at the beginning that today we wanted to first share with you the results for 2025, and second, provide additional visibility on things that are happening at the company level, recent events and strategic guideline level. I think that as a summary, if we recap on the results of the company, I think it's a good set of results. As I said, letting performance fantastic in terms of growth. Rental growth, amazing in terms of absolute levels, in terms of relative levels. Anybody should agree that this is a real remarkable number. All of this insulated in very healthy PNL and balance sheet performance.
The second part of the story, talking about the strategic positioning. Our strategic positioning is based on this conviction on the superior performance of our prime city portfolio, now and in the future. We would like to highlight, or we want to highlight the major contribution coming from the Alpha X projects. In terms of capital allocation, we are glad to announce that we are having fantastic progress in our disposal program. In particular, we are announcing a transaction signed today in Paris, which is relevant. In this respect, we are also guiding you in the direction of using these proceeds to deleverage the company, to invest in high return profile kind of initiatives, and also at the EUR 50 million level, in enhance our remuneration policy for our shareholders.
That's our presentation for today. Let me be specific about the Capital Markets Day. I said May, in particular, save the date. We are talking about 21st of May in Barcelona. Thank you for your kind attention, and now, as usual, we are available for your questions. Thank you.
Ladies and gentlemen, the Q&A session starts now. If you wish to ask a question, please press star 5 on your telephone keypad. Thank you. The first question comes from Jonathan Kownator from Goldman Sachs. Please go ahead.
Good evening. Thank you for taking my questions. 3 questions, if I may, please. The first one, on the pre-letting of Scope, are you having any discussions? I understand, I think the delivery is for 2026, if I got that correctly. Perhaps you can also let us know when do you think you will deliver that in 2026? Or yeah, I think I got that right. Second or maybe that's the start. On the second question on the healthcare, I think you're saying that your innovation, you're saying that you're on track in terms of IRR. Can you elaborate on where the occupancy is for the portfolio currently, if you've been able to improve that already, please? The last one I'll probably keep it for later.
It's also the first 2. The third one is slightly more technical. Just want to do that afterwards, please.
Thank you, Jonathan. Thank you for your questions. Look, on the Scope, it's still too soon for us to provide details on this. Probably the Q3 will be the right moment to have real visibility on where we are. On the science innovation platform, I leave it for Carmina to give some visibility on this.
Thank you, Jonathan. On the occupancy today, you know that out of the 440,000 square meters, there are part of these square meters that are pre-let, but not still building because it's like a soft refurbishment. We are in the range of 90% occupancy and with a high visibility on the pre-lets for the coming square meters that will be into operation in during this 2026. Good performance and good occupancy. Interesting names of these new tenants, and we state about our stabilized year-on cost in the range as we disclose in the range of 6%-6.5%.
Okay. Not entirely here, we can take that offline. On the Scope, it's being delivered in 2026. That's correct, right? Is it delivered towards the end of the year then? Is that what we need to assume?
Yes.
or is it delivered before? Okay.
Yeah. It's delivered by the end of the year. That's what I was saying, that maybe the right time to have visibility on the progress on the letting front, will probably in the Q3.
Okay. Right. The third question was about the like-for-like rent growth. I'm sorry, I'm a bit confused, actually, by your numbers. Let me just walk you through. Maybe you have the bridge on page 16 of the presentation, which shows EUR 21 million like-for-like and EUR 11 million. Maybe can you explain what's included, and then you have also obviously Condorcet and Haussmann for EUR 23 million decrease. What is in the EUR 21 million? Is that just transaction on existing space, or do you have any renovation of floors there or anything, like light refurb projects? Also, I'm struggling to reconcile this with the 5% lower occupancy that you have essentially in Paris.
I think the occupancy went from 100% at the end of 2024 to 95% at the end of 2025, which should impact your like-for-like rent growth negatively. You're still showing 7% increase. Again, I'm confused as to what is included in that 7%.
Look, Jonathan, I will try to explain it as clear as possible in very short words. If something remains to be further clarified, we can have then a specific call. In principle, it should be quite easy to understand. The 21 is a pure like-for-like EPRA best practice calculation. It's really comparable spaces. When we look at the 23, that is non like-for-like, this is basically concentrated on 2 assets that during 2024 were fully with rents. That is the Condorcet assets, and it's the Haussmann asset. Both assets have been, during 2025, in a refurbishment mode, have been project. Haussmann has been delivered during the H1 of the, I think in September it kicked in in September.
This is the main element of the increase in occupancy. The increase in occupancies is due to the delivery of Magnum and to the delivery of Haussmann. The like-for-like occupancy that we've not shown in this presentation remains stable at 96%. That's why the like-for-like growth is positive and totally consistent. We actually have not really. The occupancy actually has not gone down in like-for-like. The occupancy is simply a consequence of putting into delivering projects that we are now leasing up. As you can see already on the data that we show as of today, with the leasing progress that we have had today, we are already coming back.
This is the main elements on the non like-for-like building block are these 2 assets, and they are small here and there are small reflux spaces, but basically it's this. What we want to show in this page is if we would not have put these assets into renovation mode, that we are doing to create more value, to create more rents, because on Condorcet, we're gonna double the rents that initially had the building. Without this, it is just a temporary rotation because we work on the assets. Our business has grown in rents, has grown 21%, EUR 21 million like for like, because the like for like of put in occupancy is keeping, is staying at the same level, and we are starting to have, some rents of the, of the project, a little bit of Magnum.
Keep in mind that we bought in June 2024 via the capital increase assets from Criteria that also were just half a year in 2024, now they are full year in 2025. This is the explanation. The if you need a little more details, we can have then a separate call.
Yeah, maybe that would be helpful, but just as a quick confirmation. In Paris, the 100% to 95%, that is Haussmann or it's something else?
Basically, Haussmann.
Hmm.
Yeah.
Yeah.
Exactly.
Okay.
Keep in mind, it's a 12,000 square meter building that at a total rent of EUR 1,000, with this, the, the EPRA occupancy, is it in economic terms. It's an additional. You add on the base 12,000 square meters valued at EUR 1,000 per square meter, and this is today, as of December, at not yet fully let. We have already signed an additional contract in January, as we highlight here in the presentation, and now we are leasing this up. It's basically concentrated on this asset.
Thank you, Jonathan.
Okay, thank you.
Next question comes from Florent Laroche, from ODDO BHF. Please, go ahead with your question.
Hi, good evening. Thank you for this presentation. I would have 3 questions. Maybe I can ask them one by one. The first one would be on your guidance. Could you please tell us what you take into account or not take into account in your guidance for 2026? You are doing some disposals, you are announcing some share buyback, and maybe some, and you have good visibility on future acquisitions. What should I have to take into account in your guidance?
We are taking into account what we are guiding for. We are taking into account the disposals and also partially for part of the year, if we succeed, the potential acquisition.
Yes, for the future.
As you can see, it's a net.
It's a net disposal.
It's a net disposal. We are, so we are, overall, we are in net terms, divesting.
Yeah.
Roughly speaking.
Okay.
It's a EUR 300 million net disposal. Exactly.
... assumption.
Okay. Great. Okay. Well, that's clear now. Thanks for that. No assumption about consideration of the 5 million shares or no assumption about future share buyback?
No. Or sorry, only 5 million shares, and the fact that today, the board has been approved, this 50 has not been considered.
Yet.
We don't take into account the consideration of the 5 million shares for your guidance?
Yes.
Okay. My second question, would be on your, let's say, medium term, outlook. You announced, I think, several things. The first one is that you announced an EPS growth acceleration, so in 2027 and 2028. You announced, also, the ambition to reduce your LTV, and you announced also some future acquisitions, and also some share buyback. I would like to understand how, yeah, how it works at the end, because that's a lot of things.
Yes.
Some of them are not going into the same direction.
Yes. No, I understand. I think that, I think the fundamental remark about our let's say Alpha X project, is that the CapEx are most of it is already done or in a relevant part of it. And that means that it's included, no, in all of the considerations coming from the disposals that we are going through. There's no significant effort in terms of leveraging the company.
... attach to these initiatives. On the other hand, yes, there's the relevant income that we expect from these projects. That's why it's possible to both expect an LTV that remains in healthy levels at the same time that the EPS grows, no? I have to say that obviously, in our LTV projections, we are not including any assumptions regarding values going higher because of things happening to yields or nothing like that. It's a simple exercise of projecting what do we know about CapEx and cash flows.
Okay. Thank you for that. Maybe my third question would be on your visibility for your future acquisition for $200 million. Could we please ask you if you are looking for buying assets maybe in your current cities, or maybe are you looking also or only maybe to other capital cities in Europe than Paris, Madrid, and Barcelona?
Yes. I think that regarding new acquisitions, a number of things can be said. First of all, the nature of these acquisitions will remain in the prime territory. We don't want to change substantially the risk profile of the assets. That's the first thing. Second, the requirement of return, it's relevant. We look at this more in IRR terms because IRR allows to consider initial yields, but also value coming, you know, from our transformational skills. We are assuming on leverage IRRs above 8%. The third is, yes, we are a little bit agnostic about the geographical profile of where we will be investing, and we may be considering Spain, France, but also some other cities in Europe and particularly in Germany.
Okay. Okay, thank you very much.
Thank you, Vaughn.
Thank you.
From this moment onwards, and in the interest of time, please, ladies and gentlemen, limit your interventions to asking just one question. Just one question. Thank you for your understanding. Next question comes from Valerie Jacob, from Bernstein. Please, go ahead.
Hello, hi. It's just one question. I just wanted to ask about your vacancy, your occupancy. Your vacancy is quite high at the moment, and you made the point during the presentation that at the moment, it takes less than a year to absorb a new supply. Shall we assume that your vacancy is going to be much lower at your end? Is that what you have in your guidance?
Look, basically what we try to explain on page 14 is that we have a high occupancy in like-for-like terms. The prime Paris vacancy is 0.9, the prime Madrid, Barcelona vacancy is 0.6, 22 at is 1.6, and the rest is at 1. Basically, a big part of coming back to the levels that you saw in the previous year is letting up the projects that we delivered, that is Magnum and Osman, basically. You have seen that we have had strong progress. Occupancy in like-for-like terms has not changed anything. We are at the same levels, at the same as the previous year, but we have developed projects that we are letting up. We are quite confident and not just confident, we have delivered significant progress.
As soon as we then have this project let up, we are again at the super high levels. I insist, in like-for-like terms, we are remaining at the super high levels, and this is why we are delivering above average like-for-like growth.
Thank you.
Thank you, Valerie.
Next question, Véronique Meertens from Kempen. Please, go ahead.
Hi. Good evening, everyone. Thank you for the presentation. Yeah, first of all, it's pity to see that your CMD is during the Kempen conference, but also we'll discuss this later. Regarding one question around their adjusted EPRA earnings, I see you make some additional adjustments, and I was hoping to get some color on that because I do... It's roughly now 6% of your adjusted EPRA earnings, where 2 years ago it was still 0%. If you could get some explanation on where that growth is coming from.
We are calculating EPRA earnings regarding to best practice. I don't really understand, what do you refer to when you say there is an adjustment?
Véronique, could you provide more color on this? We are not following you.
There's a company-specific adjusted EPRA earnings, and that includes EUR 12 million.
... and that it says extraordinary provisions and expenses. I was wondering what's exactly in that number, because it's a deviation from EPRA earnings, how I interpret it.
Sorry, I'm not being able now.
I, I-
Let's go back to you or maybe on a summary covering, because I'm not able to identify the specific topic that you are mentioning. I don't know, Carlos, if you want to prefer to come back, no?
It's basically EPRA earnings. Maybe it's the labeling in the table, not precise. Basically, it's recurring earnings. What is there in the EUR 12 million, it's extraordinary exceptional items, cost related to the merger of SFL, related to the cost that could be attached to the SFL deal. It's really exceptional items, and it's fully EPRA compliant. Maybe it's not helping the right way to show it in that way, but it's, at the end, it's recurring earnings. This is basically exceptional costs related to deals, to extraordinary deals, that nothing has to do with recurring activity. It's really clear EPRA earnings, no? This has to be clear.
It's not that we are doing some strange adjustments or something like this. It's recurring. There's extraordinary elements. This is totally EPRA conformed. It's EPRA earnings. Maybe we should have put it in.
Okay
... in a line, above, or maybe we just put it not, totally precisely. Good that you say, so we can then also correct this.
Okay. That's clear. Thank you.
Thank you, Eric.
Next, Céline Soo-Huynh from Barclays. Please go ahead with your question.
Hi, Pere. Just one question from me, please. What is your rationale for the share buyback, and why do you think this is the best use of your capital right now? Thank you.
Yes, thank you for this question. I think there's a combination of things, no? First of all, from a real estate point of view, I think that when you consider, or we consider, of course, no, the implicit real estate quality of what Colonial is, it's something that in the market, you could not find to buy or to sell because it's an implicit, substantially, super high yield, corrected or adjusted for the quality of what we are, no? We consider that from a real estate point of view, it's an excellent deal, no?
Second, from a shareholder remuneration perspective, we believe that a number of shareholders will appreciate that on top of roughly speaking, EUR 200 million of dividends, no, that we are paying, they may receive, if they wish, an additional EUR 50 million in terms of share buyback, no. It's a combination of financial discipline regarding returns, a judgment on what are we doing in terms of real estate value for our shareholders, and third, shareholder remuneration strategy.
Sorry, Pere, can I follow up on that? Because you're trading at 4.5 implied cap rate at the moment. Isn't that a better use of your capital? I mean, you could be investing into the life science, and that would yield you something better than 4.5. I'm confused. I don't understand why you're doing this.
I think that maybe the fundamental topic is about the quality attached to the asset, no. We all agree that today, whatever yield we may see in the market has to be evaluated related to the nature of the asset. Colonial, for me, and maybe I'm not, I'm a little bit conflicted, it's super, super top in terms of prime. It deserves a kind of yields, no, that are not consistent with the implicit yield of a share buyback. I understand that this implicit yield, if you would compare it with a secondary location or any other topic, it could be a number to be reevaluated.
Adjusted for the quality profile of the assets, we believe that it's super creative, no. As I said, it's not only this. It's about a dividend strategy and the dividend remuneration, no. Finally, just another way to looking at this, we are consistently disposing assets at appraisal values. I think this has to be taken into account, no. When we are, and just today, we are announcing a relevant disposal in France at appraisal value. There's also many people that do understand that there's an arbitrage here. If we are selling at appraisal value and buying on a stock price. Many people believe that we are doing a combined strategy that is creating value for shareholders.
Okay, thank you.
The divestment at certain levels and the investment levels create this, no? That's my view, Celine.
Thank you, Pere.
Thank you, Celine.
Next question, Fernando Abril-Martorell from Alantra. Please, go ahead.
Hello, thank you for taking my question. Just a follow-up on the share buyback. You've finished, you've initiated up EUR 50 million, no? Share buyback, which is probably relatively small. However, should we assume this could be expanded if the discount to NAV persist, as you mentioned, Pere, and further disposals are executed? Thank you.
Yes. No, Fernando, first of all, to clarify, there are 2 things happening now. One is, in the past, we've done some share buybacks, but because of different reasons. Out of, as of now, we had an outstanding balance of 5 million shares in our treasury stock because of past activities, no? For example, we were buying shares in order to execute long-term executive plans, then we know that these shares are not needed. They are, let's say, remaining at our balance sheet level, and we know that they are not needed. Okay, we cancel them, and we amortize them. This is the first level, the 5 million. It's not shares that we are going to buy.
These are shares that we already own, we have decided to put them in action in terms of being amortized. There's a second level that we're saying. On top of that, from now on, we are announcing a EUR 50 million share buyback will be executed as usual, safe haven style in terms of European directive. We will be active in the market. In the way that the legal framework explains. Usually, this is something that we will be doing. Your question is, what's next? Yes, I think that the, as I said, the framework is if we can sell mature assets in good pricing, we'll do it.
Then with this money, if they are relevant, going back to Celine's questions, no? If there are relevant investments that adjusted for risk, the returns are there and are substantial, we invest in the market. If, the comparable return of buying back some shares is there, then we may put in place a combined strategy. But I would say that that is a theoretical framework, a general framework, but this is just, I would say, the theory. In practical terms, what we are saying today is, let's do this EUR 50 million. It's a nice way of enhancing shareholder return, and that's what we are doing for the next few weeks and months, no?
Okay. Thank you, Pere.
Thank you, Fernando.
Next question, Christian Ozanu from Barda. Please, go ahead with your question.
Do you hear me, please?
Yes.
Splendid. Good evening. The question about the cycle, I would say, you are one of the most experienced management in the sector, so you guys know that following bright days, there can be dark days. The question in this one, why do not use such dynamic in EPS, top line, organic growth, to much alleviate the balance sheet and to sell assets, I would say, in the coming 2-3 years? The question is why about your conviction, I don't know why. The question behind the question is, probably you read the Citrini Research report in the past few days, continue accelerating in the coming years with a 2028 roadmap is about to consider that the cycle will not switch off, I would say, before the end of the decade.
There are 2 questions in one, I would say. What's your feeling about that, please?
Yes. I think it's a very, let's say, complex question, no, to address, because when we talk about cycles, we may talk about in, I'm just speaking out loud, no? We may talk about 3 ways of approaching the cycle. One is to talk about rental cycle, the other is to talk about yield cycle, and the other-
Mm-hmm
... is to talk about capital value cycle, no? If we talk about the second and the third, I am not sure that we are at the high end of valuations. I think that we could defend easily that looking at the past experience and looking at the premium of IRRs on a comparable, no, benchmark, I would say that we are in low levels of valuation. If we talk about yields and capital values, right? And we can, of course, discuss much, much further, no? Regarding rents, I think it's tricky because it's subject to a number of issues happening, no? I think that on one end, it's always the result of supply and demand.
Depending on how these main key drivers perform, this can lead you to a cycle or another. I remember very well the cycle of 2000, the GFC crisis. Was mainly a cycle provoked by excess supply, by far, more than anything else, no? And it's also a questioning of what may happen to take up, and also a questioning on what happens to rents compared to pricing power of people. There we have our assumption, no? It's the product that we are in. It's a pity, you know, that in our sector we don't talk about different subsectors so easily as in other asset classes, no?
We believe that in an asset class, we are in a subsector that the balance between supply and demand, the pricing power that our clients can meet, does not give us visibility for a dark period, no, as you were suggesting, no? Of course, no, we've been around for a while, like you, and we look at cycles, and we try to provide visibility on what we're doing based on on them. If we went into discussion about the different angles of the cycle, we remain comfortable to a certain extent, no. In the end, today, there's a 400 basis points spread, no, between the returns of the, of the...
our kind of assets and the comparable, no, benchmark, no. I think that when you look at history, we are not in the hitting zone. It is Christian, my opinion, and I'm happy to discuss further with you anytime. Okay?
With pleasure. The final thing I keep in mind, is that in a nutshell, as far your assets are concerned, you are, or you stay pretty optimistic, and I like optimistic, for the, we'd say, 4 to 5 years. I'm right?
Yeah, I agree, but it's not only about animal spirits, no. I think that when we started with questioning about our asset class a few years ago, we've been vocal about the data, no. I mean, it's, there are many opinions about what can happen to us. Year after year, we're saying, "Great, I mean, we can all have different opinions about this, but why don't we look at the data of our performance in the last few years?" Maybe we are over-optimistic, as you are saying, but we try to relate to rely on fundamentals and numbers, no.
Thank you for your answer.
Thank you.
Thank you.
Next, Aidan Bolton. Please, go ahead.
Evening, Carlos. Evening, Pere. Just one question, if I can. You're talking about deleveraging here. If I look at your LTV, it's up close to 300 basis points year-on-year. On a pro forma basis, I appreciate that comes down to 150 basis points up since 2024. You're talking about an SBB, which obviously reduces that deleveraging. What metric are we talking about when we talk about deleveraging? Yeah, that's my question.
Yeah.
Thank you.
Yeah, thank you. Of course, we are talking basically about LTV reduction, and it's a reduction that's happening even if the SBB is happening, no. Of course. We evaluated, the scope of this SBB, in a framework of a consequence of deleveraging in any case, no. Regarding the LTV, as you know, our view is that we are very, or we pretend to be very disciplined in terms of financial strengths. At the same time, we believe that sometimes, the LTV should be measured further with further attention to the V, to the value, and what kind of risk profile is attached to the asset value and the cash flow generation.
That's why in a way, no, we have always felt, no, decently comfortable, and that's why rating agencies, no, have been in line with this opinion. We are basically comfortable with where we are, at the same time, providing comfort on this vision of financial discipline, and the deleveraging is what we expect, no, to happen as a result of everything that we are doing. Of course, yes, we are including, no, the share buyback in the numbers, and after them, after that, deleveraging is happening anyway.
Can you give us some guidance on what that LTV will be when you finish deleveraging? Because it doesn't look like it's coming down.
Well, as we, I think we mentioned, no, in the presentation, and it's written, our loan-to-value, it will be below 40%. This is the range that we would like to see. I mean, the pro forma shows this loan-to-value pro forma below, it's a 36%-37%, so be well below 40%. Having said that, we analyze this capital structure holistically, as Pere mentioned, and the rating agencies is giving the different metrics. The fact of we are more net sellers and deleveraging, it's moreover, to have growth capacity to invest in the range of this capital, this financial discipline in the loan-to-values below 40%.
This is the aim of this disposal with this alpha equity already committed, and with this net disposals or this net seller position gives us additional deleveraging to have these additional growth capacities in the framework of being investment grade as we are today.
Okay. Thank you very much.
Thank you. Thank you, Aidan. Thank you very much to you.
That was the last question, and since there are no further questions, I give back the floor to Mr. Pere Viñolas. Please, sir, go ahead.
Just thank you all for your kind attention. It's been a pleasure to share with you this result presentation, and looking forward to meeting you soon again. Thank you and have a nice day.