Colonial
Alpha X
May 16th, 2024
#1
Top 1.5%
Global
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NEITHER THIS DOCUMENT NOR ANY OF THE INFORMATION CONTAINED HEREIN CONSTITUTES AN OFFER OF PURCHASE, SALE OR EXCHANGE, NOR A REQUEST FOR AN OFFER OF PURCHASE, SALE OR EXCHANGE OF SECURITIES, OR ANY ADVICE OR RECOMMENDATION WITH RESPECT TO SUCH SECURITIES.
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Agenda
01
02
03
04
05
Executive
Summary
Enhanced Capital Structure
Transaction
Rationale
Financial
Impacts
Conclusion
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01 Executive Summary
Colonial announces new Alpha Strategies & enhances its Capital Structure
- Colonial reinforces its Capital Structure with the entry of CriteriaCaixa as new reference shareholder
Capital increase of €622m at a price of €7.1/share pre-dividend with a significant premium on share price
Total contribution: €350m in cash and €272m in assets (60% living & 40% office)
Strong endorsement of Colonial's strategy by a long-term strategic investor with an industrial growth approach
- Transaction Rationale: Reloading Colonial's growth profile with a solid Capital Structure
Colonial launches a new Project Pipeline of 110,000 sqm of prime assets with circa €385m capex at an ungeared IRR of more than +9% Additionally, CriteriaCaixa contributes €272m of urban-mixed use assets (60% living & 40% office) with ungeared IRRs of >6% & >7% Increased financial flexibility for opportunistic acquisitions
- Financial impacts
Attractive Total Shareholder Return through new growth projects & increased financial flexibility
Transaction with premium on share price and significant increase in market capitalization
Accretive transaction in EPRA LTV with an improvement of more than 450bps/ LTV improvement expected to be sustained over time EPS 2024 guidance confirmed post transaction: 30-32 €cts/share
Transaction slightly dilutive on last reported NTA (9.55 €/share post deal (4.0%) vs. 12/23)
IV Governance
CriteriaCaixa to own circa 17% of Colonial, post transaction
Transaction to be approved by Extraordinary General Shareholders Meeting
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01
02
03
04
05
Executive
Summary
Enhanced Capital Structure
Transaction
Rationale
Financial
Impacts
Conclusion
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02 Enhanced Capital Structure
1I. Colonial reinforces its Capital Structure with CriteriaCaixa as new shareholder
I a
I b
I c
Capital increase of more than €620m at a price of €7.1/share pre- dividend with a significant premium on share price
- Institutional long-term investor to subscribe €622m at a premium to share price, which showcases Colonial's value potential
- Premium on YTD VWAP & above current trading
- Substantial deleverage providing enhanced financial flexibility
- Significant increase of market capitalization post transaction
Total contribution: €350m in cash and €272m in central urban assets
- Contribution of €272m of central urban assets at NTA parity
- Contribution of €350m in cash at 5.80 €/share
-
Contribution to be executed after dividend payment of 0.27 €/share:
Blended price post dividend of 6.83 €/share.
Strong endorsement of Colonial's strategy by a long-term strategic investor with an industrial growth approach
- CriteriaCaixa is one of Europe's leading investment holding companies
- Reinforcement of capital structure with a new long term and prestigious shareholder as catalyst for Colonial's growth strategy
NTA 12/23 (€m) | ||||
40% | ||||
60% | 350 | 5,994 | ||
€622m | ||||
272 | ||||
Living | +12% | |||
5,372 | Office | |||
Pre deal | Asset | Capital | Post deal | |
Contribution | Increase | |||
Contribution Price pre-dividend | €7.1 | |||
Significant | ||||
Premium | ||||
€5.9 | ||||
Share Price | ||||
01/2024 | 14/5/24 | |||
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01
02
03
04
05
Executive
Summary
Enhanced Capital Structure
Transaction
Rationale
Financial
Impacts
Conclusion
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03 Transaction Rationale
2II . Transaction Rationale: Reloading Colonial's growth with a solid capital structure
- a Colonial launches its new Project Pipeline with an ungeared IRR of +9%
New sizable pipeline in place, well diversified across emerging urban themes & cities with attractive layout and large floorplates
Urban Mixed-Use
Project Pipeline of more than 110,000 sqm of prime assets with circa €385m of capex to be invested
Urban transformation portfolio with total cost of circa €1bn1 and an expected yield on cost in excess of +6%
Substantial reversion to be captured with more than €64m of rental revenues to be achieved at project delivery
Urban regeneration projects with significant prime factory value creation potential
-
b CriteriaCaixa contributes 8 assets in-line with Colonial's urban regeneration strategy, with a total value of €272m (40% office & 60% living)
Urban living as a natural complementary product for a prime office strategy
Offices focused on Madrid CBD and Mendez-Alvaro with attractive perspectives of accelerating rental growth
Additional value creation through Value-Add strategies on the back of
Colonial's management team track record
High Quality Living portfolio in consolidated urban areas in the city center with significant rental growth perspective and capital value growth
Santa Hortensia Madrid - City centre
Life Science/
Healthcare
Sancho de Ávila Barcelona - 22@
Offices
Ungeared IRR > 7%
Méndez
Álvaro
Condorcet
Paris - City centre
Business Campus
Scope
Paris - City centre
Living
Ungeared IRR > 6%
OfficeLiving
40% 60%
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1 Total Cost = Asset Value pre project + future Capex
03 Transaction Rationale
- a Acceleration of a new Project Pipeline with an ungeared IRR of more than +9%
Life Science/ Healthcare | Urban Mixed-Use | Business Campus | |||||||||
UNGEARED IRR LEVERED IRR1at NTA | UNGEARED IRR LEVERED IRR1at NTA | UNGEARED IRR LEVERED IRR1at NTA | UNGEARED IRR LEVERED IRR1at NTA | ||||||||
> 7% | > 11% | > 9% | > 13% | > 9% | > 13% | > 9% | > 13% | ||||
Asset fully pre-let at Project start | |||||||||||
17.800 | 24.000 | 46.900 | 22.000 | ||||||||
sqm | sqm | sqm | sqm |
Sancho de Ávila | Condorcet | Santa Hortensia | ||
Barcelona - 22@ | Paris - City centre | Madrid - City centre | ||
Scope
Paris - City centre
Changing current office use into Life Science/ Healthcare
30-year contract with leading Spanish Operator
Pre- agreed rent significantly above the office prime rent
Creation of a healthcare/ life science asset in an existing City
Hub with strong potential for new
A future campus on a 9th Arrond.
block open to the city
Additional GLA created along with
green areas
Large scale asset providing all the amenities the new users require
Strong rental reversion vs previous contract
Ongoing discussions for pre-let
structures
Area with strong demand for all
living uses
Strong mixed-use synergies between uses of common areas
New mixed-use with strong rental reversion
Multi-purpose building offering a unique range of services with generous outdoor spaces (garden, loggias, rooftop)
Next to one of main Transportation Hubs: Paris - Gare de Lyon.
2nd largest office sector in Paris
Best ESG Standards - Bioclimatic façade & reuse of existing materials
healthcare / life-science initiatives
Urban-mixed usage assets with big floor plates and well located in urban central areas
most sought after by tenants -> increased rental and capital growth potential
1 Levered IRR at EPRA LTV post transaction
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03 Transaction Rationale
- a Acceleration of a new Project Pipeline with an ungeared IRR of more than +9%
PARIS
> 9%
ungeared
IRR
> 13%
levered1
IRR at NTA
Condorcet
Urban Mixed-Use
> 9%
ungeared
IRR
MADRID
> 9%
ungeared
IRR
> 13%
levered1
IRR at NTA
Santa Hortensia
Urban Mixed-Use
Velázquez 86D
BARCELONA
Fully | > 7% |
ungeared | |
Pre-let | |
IRR | |
> 11% | |
levered1 | |
IRR at NTA |
Sancho de Ávila
Life Science/ Healthcare
22@
- 13% levered1
IRR at NTA
Scope
Business Campus
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1 | ||
Levered IRR at EPRA LTV post transaction |
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Inmobiliaria Colonial SOCIMI SA published this content on 16 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 May 2024 16:42:05 UTC.