Yesterday, Colonial held its “Investor Day” during which it said it expects gross revenues from rentals to rise 2.9% to €279 million in 2017 from a year earlier.
Apart from the end-year guidance, the other aspects worth highlighting are: a) dividend yield target in the range of 2%/2.5%; b) annual investment in the acquisition of new assets for a total of €300 million; c)interest in the rehabilitation and promotion of new construction given the limited buy opportunities in terms of prime assets.
Despite the fact Colonial’s gross rentals revenues figure is 6% lower than Bankinter’s forecasts, implying a slowdown compared with the 5.5% increase in Q2’17, the analysts believe “this guidance has not had any relevant impact on the share price. The investment figures estimated for the coming years and the dividends’ policy don’t represent any change in the company’s strategy.”
And finally, the real estate firm will launch a new share buyback plan. The operation, worth €100 million, will allow Colonial to buy its own shares equivalent of up to 3% of capital (12 million shares).
The objective is to have enough treasury stock for any possible growth opportunities, exchanging property assets for shares. This is something the company already did when it bought assets from the Mexican group Finaccess (which is currently its main shareholder, with a 13.7 stake).
Renta 4 analysts point out that “if its buyback plan is fully executed, its treasury stock would rise to nearly 6% of capital (it’s currently around 3%).
The plan will last for six months, until April 2018, if its maximum objectives are not met beforehand.