Ladies and gentlemen, welcome to Colonial SFL first quarter 2026 results presentation. The management of the company will run you through the presentation. That will be followed by a question and answer session. You can ask a question by phone by pressing star five on your telephone keypad. I would now like to introduce Mr. Pere Viñolas, CEO of Colonial SFL. Please, sir, go ahead.
Thank you. Good afternoon to everyone. A pleasure to be again today here to share with you the results for the first quarter of 2026. The team as usual with me, Carmina Ganyet, Chief Corporate Officer, and Carlos Krohmer, Chief Corporate Development Officer. I am on page 4 of the presentation. As introductory remarks, I believe that what we are sharing with you today is an outstanding set of results for this first quarter. I would like, of course, to emphasize that this is a quarter with a number of events at the macro political, macroeconomic, and geopolitical level have happened that it creates a little bit of a headwinds on the dynamics of the economy as a whole, also in the real estate industry.
We have to say that the performance of our company during this quarter has remained totally resilient and with a very good performance, no. I, if I had to summarize a number you will see, Colonial, it is still about two things. One is pricing power. Basically, what you will see it's like-for-like rents, no, rental growth ahead of inflation, healthy numbers again. The second main characteristic is relative performance. It's not that we are just following the general trend of what's going on in the real estate market. I think it's quite clear, no, in the last few years that the polarization effect has come into place, and there are winners and losers, and companies that take advantage of this more and others than less.
This clear relative performance, I think that it's very obvious in the case of Colonial SFL again, no. Basically, what I'm summarizing in these introductory remarks is you will see through the presentation, first of all, a strong leasing activity, superior rental growth, 3% re-rental growth in a quarter, a re-leasing spread of 7% driven by Paris portfolio 18%, and the occupancy having a positive momentum, reaching almost 200 basis points more than a year ago. The top-line revenue growth is growing 7%, as you will see above peers. The like-for-like growth, it's 4%. Again, pricing power and leading the sector. The like-for-like net rental income, 4.5%, 260 basis points above indexation. This is performance of the P&L, no.
Besides this, the basic outcome of this quarter in terms of balance sheet is a disposal program that is ahead of the plan and an overall strengthening of the capital structure. We will see that we have executed 70% of our disposal program year to date. The EPRA LTV is reduced by 180 basis points. The rating has been reaffirmed via S&P. The bonds have very successfully been placed. This is on the back of with the support of the strategic pillars of Colonial, which is a clear positioning in prime CBD operations, which drive this cash flow growth, this pricing power. Second, the Alpha X projects that are adding extra layers of growth. Not so much now, but more and more in the near future, particularly next year.
The portfolio management and capital allocation decisions that are the third layer of return for shareholders. Page 5 is about the specific numbers. We are finishing the first quarter with sustained cash flow growth. Gross rent, rental income, EUR 104 million, 7% year-on-year. Recurring EBITDA, EUR 83 million, 5% year-on-year. The EPRA EPS, EUR 0.087. That means in line the full year guidance that we previously announced. This is supported by an excellent operational outperformance. Rental growth, 3% in one quarter. That is compared to December 2025. Re-leasing spread, 7%. Occupancy, 93%. That is almost 200 basis points more than a year ago. Finally, capital structure. Strong grade rating reconfirmed, particularly S&P, which reconfirmed just recently the BBB+ rating.
Loan-to-value, 36.7%. 35.2% on EPRA LTV measure. Financial cost, still below 2%. These are the headlines I wanted to share with you. As usual, we go first through an analysis and description of the portfolio management. Afterwards, about, the financial performance of the company. Please, Carlos, step in when you want. Thank you.
Thanks very much, Pere. On page number seven, this first quarter has shown very, very strong leasing activity. We've signed 37,000 sq m in this quarter that are equivalent to EUR 17 million of annual rents that we've signed in the contracts. This is a year-over-year increase of 28% compared with the first quarter of the previous year. What is really important to highlight is that this take up, these contracts signed, have a very significant push from AI and tech tenants. We have really benefited in total demand in 36% of AI and tech activity tenants that want to be really in the best places. It's really an upside driver for our activity. 13,000 sq m signed out of this source of tenants.
If we look then per business segments in terms of cities, Paris, again, that's a very strong market in the prime asset class. We have signed a EUR 7.5 million in Madrid and Barcelona, EUR 5 million of rent secured. Paris, EUR 7.5 million on 7,500 sq m. As you see, an average rent of all of the things that we signed at levels of 1,000 at other levels of our prime assets. If we then go to the next page, we see at what pricing levels we have signed. We see all the pricing power that our prime assets capture. First of all, re-leasing spread. When we renegotiate contracts with the tenants that are already in our portfolio, we had a very, very strong quarter. We achieved an 18% re-leasing spread in Paris.
Paris by far, the strongest city in our portfolio in terms of the re-leasing spread. What is also very important to emphasize is that in Madrid and Barcelona, that a year ago, the re-leasing spread was flat because these markets have had higher inflation during the COVID times and markets, the rents were more mark to market. We are now getting positive re-leasing spread, 2% in Madrid and 6% in Barcelona. We then look to the second KPI, that is rental growth, where we look at all of the contract signs, not just renewals, also the new space signed. What we are seeing is that we have signed an increase of 3.3% versus the market rent of all of these contracts and assets as of December 2025. Just in three months, 3%.
It's quite remarkable number because you have to think about it in annualized terms at the end. Just in 3 months, we're already capturing rental growth, especially with the people that are already in our portfolio because they have no other place to go. We have signed very high rents with them. If we then go to the next page, we see on the project pipeline, on the recently released projects that we are progressing quite satisfactory. On the left-hand side, we have the biggest project we have ever done. That is the Madnum urban mixed-use campus in Madrid. As of today, we have let already 85% of the total premise. That is close to 60,000 sq m. Once fully stabilized, this will generate EUR 21 million of annual rents.
We have 85% secured, but we are in quite advanced conversations on additional 7,000 sq m that will push this up to 97%, so almost full occupancy. The 85% correspond to EUR 17 million of annualized rents. Q1 just has EUR 3 million, there's a lot to come in the future. Haussmann is an asset that will deliver EUR 13 million of rents. As of today, we have 39% let. That corresponds roughly to EUR 5 million. We are having conversations on the remaining part or half of it in a more advanced stage. On page 10, what you see is the progress on the occupancy. We see here the last three quarters.
Since Q3 2025, where we were at 91%, we are already with all of the contracts that we've secured today at 93.3%. This is 200 basis points in 2 quarters, roughly 100 basis point per quarter. Our product attracts. Our product is having a strong letting momentum. An additional important element to remind, if we exclude Haussmann and Madnum, look in a way to a more like-for-like portfolio, the rest of the portfolio remains at 95% of occupancy, super high occupancy. That is a healthy occupancy ratio to have really in that activity. You can see it basically on the maps on the right-hand side that almost all of the assets are at levels between 90% and 100%.
Our portfolio is really a portfolio that always has high occupancy.
Just to summarize, you can see number 1, great rental growth, almost 30% more than a year ago, and supported by the technology sector, as a consequence of big upside in a strong letting momentum, higher occupancy, 200 basis points more than a year ago. As a consequence of higher occupancy, and a strong letting volume, higher rents, 3% rental growth in just a quarter, with a lot of pricing power and well above inflation. Let's have a look now at financial performance. Carmina, please.
Okay, thank you, Pere. Let me now walk you through our financial performance in the first quarter. Starting with the gross rental income, we reached EUR 104 million, which represents 7% growth year-over-year. This growth comes from two complementary drivers. The first is our core portfolio, which delivers 4% like-for-like increase, well above the peers average, as you will see shortly. The second driver is the contribution from delivered projects, which adds an additional 3% on top. Notably, disposals had a neutral impact in the P&L. This is, in the first quarter, a cleaner and high quality revenue growth. In the next page, digging deeper into the like-for-like growth, I want to highlight something that probably is very outperforms.
We are not just capturing indexation, we are significantly exceeding it. On the 4% like-for-like gross rental income growth, probably half of it, 1.9%, it's from indexation. The other half comes from rental growth premium and as well occupancy gains. In absolute terms, our gross rental income like-for-like runs 216 basis points above indexation. When we look at the net rental income as well, this spread widens even further, 244 basis points. This is a valid reflection of the structural supply in our CBD markets. Moreover, thanks to our quality of our assets and as well of our tenant base, as you've seen previously in our contracts.
Turning to the bottom line, recurring profit came into EUR 55 million, in line with last year. I want to flag comparable point for a proper reading of this figure. The first quarter 2025 figure included approximately EUR 2 million, which is one-off income related to early termination contracts closures. Excluding this effect, this one-off effect, the underlying recurring profit growth is close to 4% year-on-year, which is in the right comparable growth rate and fully consistent with our operational momentum. At EPS, we delivered then EUR 0.087 per share, and we are on track with our full year guidance 2026. EPRA earnings on a 2 years view are up 16%, reflecting the compounding effect of our growth strategy.
I will cover the financial course evolution in details in the next slide. In the balance sheet, I am in page 14. This brings on the balance sheet what I think particularly as Pere mentioned, it is a very strong story this first quarter. We executed EUR 350 million disposals year to date, representing 70% of our total disposal program in just 6 months. These transactions were completed at or above appraisal values with a premium, especially on the residential assets. As you know, we disclosed in Paris, landmark deal was closed at very attractive prices. The results, our loan-to-value declined by 144 basis points to 36.7%.
Our EPRA loan-to-value decreases as well, 182 basis points to 45.2%. On the cost of debt, despite of having been very active in the bond market, repositioning the maturity of the bonds during 2025 and 2026, our spot cost of debt stands at a very interesting levels, 1.92%. Essentially flat of the last three quarters. This is the result, as you know, from the previous conversations from our disciplined proactive strategy, which allows us to lock in a very competitive rates ahead of any issuance. Even as we have been extended our maturity profile of our debt and strengthened our balance sheet, we did so without sacrificing our cost efficiency. This is very, let's say, outstanding in these markets.
On that note, we successfully, as you know, placed EUR 500 million green bonds in this first quarter, 3.4 x oversubscribed, swapping short-term maturities in five years funding and further reinforcing our debt structure. Just last month, S&P reaffirmed our BBB+ rating with a stable outlook. Our, a strong external endorsement of our full financial discipline. Finally, liquidity stands very strong, EUR 2.6 billion, giving us the full flexibility to continue executing in our strategy.
Thank you, Carmina Ganyet. Final remarks, on my side. I think that the set of results that we are sharing with you today are in line, you know, with previous quarters, are quite strong. I think that is basically linked to the three pillars underpinning earnings visibility and value creation. I think that the basics of Colonial is about prime CBD operations. This is what is giving us pricing power and differentiation happening in Paris, Madrid, and Barcelona, and creating a strong reversion. That's what has created a 4.5 like-for-like net rental income number for this quarter, the highest among peers, 260 basis points spread over indexation.
If you want to see it with different numbers, 18% re-leasing spread in Paris, 5% yearly growth in renewals, 195 basis points occupancy increase since third quarter 2025. These are the very basics of what's going on in Colonial SFL. On top of that, I would like to emphasize the current and most of all future contribution coming from Alpha X. Alpha X is a number of projects that as of now are contributing EUR 4 million rents in the first quarter of this year. Most of all, with potential of contribution for the EPS growth in future semesters, and particularly next year, that will contribute in a very fundamental manner to the EPS growth. All of these projects are going very well as expected in terms of timing and delivery.
That will be a major source of value creation on top of pillar 1, which are prime CBD operations. The third pillar of value creation is about portfolio management and capital rotation. I think we've been consistent in the divestment plan that has been delivered. There has been a very good progress on the EUR 500 million plan that we announced November last year. 70% of this plan is completed. Let's not forget, you know, that EUR 1 billion have been sold in the last three years. I think I would not be wrong if I talk about EUR 2 billion, you know, in five six year timing.
Obviously, every time that we go through disposal meeting, if you wanna call it NTA level, if you wanna call it yields or cost of capital well below implicit values in the stock price, call it whatever you want, but with very good premiums in all disposals. This is being delivered. Finally, in this quarter, we have also completed the buyback program that we announced just a few weeks ago in very attractive terms and with an interesting accretive impact in the KPIs of this year, you know. My last remark is the one you see in page 18, you know.
I think that you will probably agree that the times we are living, it's super hard to emphasize the individual performance of a company when everything seems to be so much related, you know, to macro trends and mega simplistic views on certain sectors, you know, or geographies or countries, you know. I said at the beginning of this presentation that in the end, what Colonial SFL is delivering is about pricing power, and it's also about relative performance, it's about differentiation. Well, I think that we've disclosed a very good number of like-for-like gross rental income. This is a very good number in absolute terms, 4%, 7% including delivered projects.
Also, it's very important to bear in mind that if you put it in the context of relative performance with our peers, we are clearly showing outstanding number. This has been the presentation. In page 19, the major remarks, which is mainly operational outperformance, growth visibility, market-leading rental growth, pricing power continuing to reinforce the cash flow visibility. Growing occupancy, which of course is the result of a sustained demand, which this particular color of demand being supported by technology and AI-related tenants. Paris portfolio outperforming peers through resilient operation and leasing performance. The pipeline in line with our expectations, so future rental growth and long-term portfolio value creation ahead of us. Active capital rotation supporting deleveraging and crystallization of portfolio value.
Finally, 2026 guidance on track, supported by strong operation fundamentals. This was the presentation for today. Finally, just a reminder of our Capital Markets Day expected for June 4th in Madrid in Madnum on our annual general shareholders meeting expected for June 17th. That's just a couple of reminders. Thank you. This has been the presentation of results for this first quarter. Now we are available for any question you may have. Thank you.
Ladies and gentlemen, the Q&A session starts now. If you wish to ask a question, please press star five on your telephone keypad. Thank you. We kindly ask you to limit yourself to two questions per turn. Thank you. The first question comes from Valerie Jacob from Bernstein. Please go ahead with your question.
Hi. Good evening. Thank you for taking my question. I've got 2 question. The first one is on capital allocation. You've done, you know, as you said, already 70% of your disposal program. I was wondering last time, during the full year presentation, you were talking about, you know, looking at acquisition and also now you've done your share buyback. I was wondering, if, you know, you could sort of give us an update on the way you're thinking about capital allocation. Like, for example, could you do more disposals, or are you still looking at, you know, potentially acquisition, or could you do more share buyback now that you've done your buyback?
If you could just share some thought on, you know, how you're thinking about that would be useful. My second question is on your occupancy. If I look at the pro forma occupancy at your end, it was 93% and now pro forma it's 93.3%. I was wondering if you think this is a good pace and if we can sort of, you know, think that your occupancy is going to grow by 30 basis points every quarter, or maybe if you're thinking differently about it, and what can we expect in term of, you know, what do you expect in term of leasing space? Thank you.
Thank you, Valeria. I will go on the first question, and then I will ask maybe Carlos to step in on the second one. Look, our view on first of all, on capital allocation, we are pretty satisfied with what's going on and speed and quality of the divestments that we have gone through. Looking forward, I would say a couple of things. First of all, we will look at both investment and divestment alternative. I think that by definition, no, our mission is about creating value, no, through an active value creation through capital recycling, acquiring and selling. Both things may happen.
I would say that the marginal trend for the rest of the year will be increase net selling position, and we may enhance what you've seen so far with additional net disposals. That would be on the first comment. On the occupancy, Carlos, would you like to step in?
Yeah. On the occupancy, basically what you've seen that in two quarters we have improved 200 basis points, so roughly 100 basis point per quarter. It's obviously difficult to say what's gonna be the next quarter, but we are positive. We are having a lot of conversations on the top product that we have in the market. We are positive. Also to remind you, in like-for-like terms, we are remaining at 95% of occupancy. We are positive. We had a good momentum. We have a good rhythm, and we think it can continue. We should be quite soon at a very high occupancy level again. 93% is already high. We're gonna be high again. As we flagged, we are having good conversations on Madnum, on Haussmann. We are positive. Yeah.
Thank you.
Thank you, Valerie.
Now, next question comes from Fernando Abril from Alantra. Please go ahead.
Yes. Sorry. Thank you for taking my questions. Have a couple follow-up on the enhancement of the disposal program under analysis that you mentioned in the presentation. It's a follow-up which is basically if you end up selling another, let's say, EUR 500 million worth of assets, how should we think about the capital allocation? 1/3 to deleverage, 1/3 to shareholder returns, 1/3 to reinvestment or any, I don't know, any color you can give us on this would be very helpful. Second, on the re-leasing spread in Paris, the + 18%, which is very high, was based on 8,000 sq m. I'm looking at it right now. Was this a single asset?
Should we expect also, you know, this huge re-leasing spreads on the upcoming renewals? Also linked to this, how should we think of re-leasing spreads, sorry, incentives, right now with, along with these re-leasing spreads? Is it coming with higher level of incentives or similar to past quarters? Last. No, sorry, those two questions. Thank you very much.
Thank you, Fernando. I will go through the first one and ask Carlos to step in on the second one. Look, on the follow-up of the disposal program, first of all, as a general comment, we're working on a number of things, and maybe, and probably we'll be more specific at the Capital Markets Day opportunity, where we'll probably be able to provide more and more color in this. As of now, I would say that we don't have specific hurdles for the allocation of the proceeds of the disposals. On the first EUR 500, as you know, there was a sort of, number 1, share buyback that we have already completed. Number 2, some opportunistic investments. Number 3, the de-leveraging.
On the additional disposal program that we may do, there's no specific goals for this. I would say that the overall aim is to further deleverage the capital structure of the company. I think that more detailed color may come at the time of the Capital Markets Day. On the second part, on the lease spread, the eight dramatic 18%.
Maybe first, market data that many market participants have not really taken into consideration that in the CBD market in Paris this quarter, the incentives for the super prime assets have decreased to a level in the broad market. I'm not talking about Colonial. For the prime assets, from 15% to 17% a year ago. In the prime end, in the prime asset class, that is the segment where we are operating, the incentives have gone down. As you can see also, the demand is strong. In our portfolio, that's really the super prime part of the prime, we are signing at the moment between 12% and 14%. This is extremely low. Below the market data of today in Paris.
We are signing, we're signing at very good terms. We are confident our assets are strong. We have also, you know, Paris is a market with long-term contracts. This allows you to have always a little bit more re-leasing spread than in markets with shorter term contracts. There's no reason to think that the coming quarter should be very much different to what we see today. We are positive on it.
The lease spread, Fernando, is not one single contract you asked for. It's across all the objects that we have signed this quarter.
Okay. Thank you very much for the answers.
Thank you.
Thank you, Fernando.
Next question comes from Céline Soo-Huynh from Barclays. Please go ahead.
Hi, Pere. I got two questions on Barcelona, please. First one, I'm struggling to understand the 11% like-for-like rental growth. Can you explain how you've achieved this number? Because it's quite high. I don't think occupancy has moved much as well. Follow up to that, do you see some improvement in the Barcelona market? Do you think we'll get some kind of inflection point soon? Thank you.
Thank you, Céline. Carlos will take care of this one, the 11% like-for-like growth and the general view on the Barcelona market.
Well, on the Barcelona market, it's a combination of occupancy and also pricing. Especially, and I think we highlighted this in the year-end presentation, the pricing performance has been extremely strong in the Barcelona market. The market is really picking up at a very strong pace in rental prices. We are signing now, for instance, at our building, we are signing levels of EUR 33-EUR 34, where a year ago, the prime rents were more at EUR 27. We have now an extreme acceleration, and also some impact of improvement in occupancy. This is basically the main effect.
As we are now starting on a little bit lower figures, we are having there an extremely strong effect this quarter of the represent. 6% is volume driven, and the other 5% is price driven.
Your views on Barcelona?
On Barcelona, we are seeing accelerating momentum. Accelerating activity in super prime product, and also recovery and starting of significant absorption in 22@ that should also help. One of the main drivers is AI and tech demand, that Barcelona is one of a good destination for this type of thing.
Yes for this, in other words, Céline.
Yeah
In Barcelona, when I see the performance of the, let's say, call it the prime city location, I do not see any difference regarding Madrid or Paris in terms of outstanding performance because the drivers in terms of limited supply versus strong demand are exactly the same. What is unique to Barcelona is that on the 22@, I think that there was an historical case of oversupply that is disappearing because no more supply is in the 22@ and demand is taking care of it, no. A stronger momentum.
Recently, probably one data from the market perspective. You know the size of the market, office market in Barcelona, it's 6 million sq m office stock. Madrid is 13 million sq m. This first quarter, the take up in Madrid has been roughly 90,000 sq m total market. The take up for Barcelona is 75,000 sq m. In relative terms to the size of each market, Barcelona has been accelerated, because it's.
Oh, okay. Thank you.
almost 50% of the market, Madrid. The take up is in line.
Yeah, I guess I'm a little bit confused because if you look at your peer on an earlier call, today, they're losing a big tenant in Barcelona, and they weren't as optimistic, I would say, compared to you guys. That's why I was interested in, like, why the diversion in views.
Well, maybe the product is not exactly the same. Look, I, I cannot have an opinion on the, on their views. I, I think that in our case, it's quite consistent, you know, with views that we have even before. We are supporting a little bit this with the data that we're just sharing with you, like the numbers that Carmina was sharing with you.
Super. Thank you very much.
Thank you, Céline.
Next question comes from Florent Laroche-Joubert from ODDO. Please, go ahead.
Yes. Good evening. Thank you for this presentation. I will ask two questions, if I may. The first one would be, would you be able to give us maybe more color on your strategy for the letting of Scope in Paris? I think it will be delivered in 2026. Maybe my second question, maybe as a follow-up on your disposals, could you maybe precise or give more colors on what you are targeting in terms of deleveraging by doing maybe more disposals? Thank you.
Yes. On the first question, I think there's nothing in particular to say. Scope is actively now being marketed in the Paris market. There's a good reception by prospective tenants, we are just at the beginning. As you know, the central case for marketing of this building would be second half of this year and first half of next year. We are quite, let's say, comfortable with standards of quality and uniqueness of the product. I think it'll have the reputation that the SFL product has had always in the market, which has led always, you know, to outstanding letting performance.
We are have high conviction, you know, on the reception that it will have from the market. I think we are in the early stages, you know, to give you additional color on this, you know. On the deleveraging, additional target level, you know, Carmina, you want to step in?
On the target level, meaning the capital structure, I think we always have said the same, no? When we look at the metrics on the rating agencies, this is a more holistic approach in terms of EBITDA, loan to value and ICR. To give you some numbers, we are within the range of 40% loan to value, which is in line what the rating agencies are providing us to be in the investment grade high end of the investment grade range.
Okay. 40% IFRS LTV, not EPRA.
Yeah. IFRS LTV. Yes.
Yes. Florent, to be honest, as Carmina is saying, we are not so much about the magic of certain ratios like LTV. For us, the fundamental issue, it's the quality of our debt, you know, which is proven several times, you know, that has the support of the debt markets. It's not only that recently, you know, again, BBB+ by S&P just a few weeks ago. It's about the spread that we show on the debt market. It's the overall quality, you know, that we care more about than a specific number of LTV or any other KPI. That, in our view, it can be simplistic and misleading many times, you know.
It's true that we tend to show, let's say, more limited numbers regarding LTV than the previous quarters. The overall goal for us is to have the highest quality of the debt in a more, let's say, holistic analysis level, such as the one that is being provided by rating agencies.
Okay. Thank you very much.
Thank you.
There are no further questions. Therefore, I give back the floor to Mr. Pere Viñolas.
Oh, thank you. It's been a pleasure to share with you these results. Even a higher pleasure when they are good results as the one of this quarter. I would hope to see you again soon for the next presentation of results, for the Capital Markets Day or in any other occasion. Thank you, and have a very good day.