Intermoney Analysis
Colonial SFL held its CMD in Madrid on Thursday, which did not yield any major news. The REIT confirmed its strategic focus based on the following pillars: 1) operational leverage of office assets in the CBD, a product that will remain the priority, without ruling out entering the German market; 2) strengthening Plan X, focused on the transformation of assets, whether through development from scratch or a change of use, such as from offices to student accommodation or hospitals; and 3) capital recycling, through asset rotation and share buybacks.
The inevitable rise in financing costs will impact EPS until 2028, but the guidance remains unchanged. Colonial also confirmed the priority of maintaining its BBB+ rating, given its current debt-to-GAV ratio, which leaves some room for this. With all this in mind, and taking into account an inevitable rise in debt costs following the expiry of current hedges, the REIT expects to meet its EPS guidance of €0.36 in 2026 and €0.39–0.41 in 2028. Higher interest rates would offset more than half of the operational improvements in this variable.
Assessment: AN AGM with no major news, although the impact of the rise in financing costs (€0.10 between 25 and 28 according to COL itself) has surprised us given its magnitude, so we have cut the 2028 EPS by around 4–5 cents, although we remain positioned at the upper end of the guidance range.
Recommendation: Buy PO €8.50/share
