Media Impact


Speaking at ESADE, Joan Josep Bruguera, Colonial’s President, said the firm will reach a share capitalisation of €2,800 m by July, putting it back among Europe’s biggest property companies. His remarks were made during a session moderated by José María de la Villa, Director of Institutional Relations.  The talk was one of a cycle forming part of ESADE’s Business Breakfasts, which are sponsored by Criteria CaixaCorp. Bruguera explained that "the capitalisation of the new Colonial puts us back where we were before the crisis and involves a leap from €230 m in assets to €2,800 m in July".

The new Board of Directors has thus managed to save a company that was hard-hit by  the recent property slump. According to Bruguera, the former directors took “rash decisions that went against the public interest and led to massive debts¿. Cardinal errors included: the merger with Inmocaral (because the assets acquired were highly sensitive to change and were badly hit when the property bubble burst); the purchase of Riofisa (for which far too much was paid, with the banks’ support); the acquisition of 15% of FCC (an operation funded by borrowings and where FCC’s shares plummeted on market falls).

The new management team had to decide whether to wind up the company or try to  save it. To rescue Colonial, it was imperative to put the firm back on an even keel after the massive €3950 m loss sustained in 2008. In February 2010, agreement was reached on debt restructuring and reduction "thanks to the issue of convertible bonds and equity to underpin the parent company’s debt". In addition, Bruguera noted that Colonial had "cut debt by €4,545 m  through the agreement with the bank" – almost half of Colonial’s debt when the new board took over the company.

Back to its roots

In the words of its President, "In the future we will do what we did in the past". Colonial has always been a property company that managed and rented its assets. We are now returning to the firm’s roots because office rental is our core business and is currently worth €5,132 m.

The offices we rent out currently show a 94% occupancy rate. The income generated comes from  three main markets: Paris (63%); Madrid (19%); Barcelona (16%).  Bruguera said that in future, the company would focus on Triple-A rated offices  on prime sites "because these areas are more price-stable and demand for such premises is holding up much better in the present property meltdown".

Prices have found their level

Colonial’s President mentioned the turmoil in the property sector worldwide and said that everyone had expected a "soft landing" after years of rocketing growth. However, "the international financial crisis put paid to the idea and the sector has come down with a bump".

As far as the future is concerned, Bruguera considered that "prices had found their level". He added that "Nine out of ten Spaniards hold property and these are the first to have an interest in maintaining its value. He also stressed the importance of putting housing within young people’s reach and noted that "tax incentives  are needed to foster the rental sector because this is in everyone’s interest". Bruguera argued that a timid step in this direction had been made with the passing of the new SOCIMI Act but that Spain ought to emulate French and German measures for fostering a thriving rented housing market. 

For further information:
ignacio.ramon@esade.edu

Media Impact


Speaking at ESADE, Joan Josep Bruguera, Colonial’s President, said the firm will reach a share capitalisation of €2,800 m by July, putting it back among Europe’s biggest property companies. His remarks were made during a session moderated by José María de la Villa, Director of Institutional Relations.  The talk was one of a cycle forming part of ESADE’s Business Breakfasts, which are sponsored by Criteria CaixaCorp. Bruguera explained that "the capitalisation of the new Colonial puts us back where we were before the crisis and involves a leap from €230 m in assets to €2,800 m in July".

The new Board of Directors has thus managed to save a company that was hard-hit by  the recent property slump. According to Bruguera, the former directors took “rash decisions that went against the public interest and led to massive debts¿. Cardinal errors included: the merger with Inmocaral (because the assets acquired were highly sensitive to change and were badly hit when the property bubble burst); the purchase of Riofisa (for which far too much was paid, with the banks’ support); the acquisition of 15% of FCC (an operation funded by borrowings and where FCC’s shares plummeted on market falls).

The new management team had to decide whether to wind up the company or try to  save it. To rescue Colonial, it was imperative to put the firm back on an even keel after the massive €3950 m loss sustained in 2008. In February 2010, agreement was reached on debt restructuring and reduction "thanks to the issue of convertible bonds and equity to underpin the parent company’s debt". In addition, Bruguera noted that Colonial had "cut debt by €4,545 m  through the agreement with the bank" – almost half of Colonial’s debt when the new board took over the company.

Back to its roots

In the words of its President, "In the future we will do what we did in the past". Colonial has always been a property company that managed and rented its assets. We are now returning to the firm’s roots because office rental is our core business and is currently worth €5,132 m.

The offices we rent out currently show a 94% occupancy rate. The income generated comes from  three main markets: Paris (63%); Madrid (19%); Barcelona (16%).  Bruguera said that in future, the company would focus on Triple-A rated offices  on prime sites "because these areas are more price-stable and demand for such premises is holding up much better in the present property meltdown".

Prices have found their level

Colonial’s President mentioned the turmoil in the property sector worldwide and said that everyone had expected a "soft landing" after years of rocketing growth. However, "the international financial crisis put paid to the idea and the sector has come down with a bump".

As far as the future is concerned, Bruguera considered that "prices had found their level". He added that "Nine out of ten Spaniards hold property and these are the first to have an interest in maintaining its value. He also stressed the importance of putting housing within young people’s reach and noted that "tax incentives  are needed to foster the rental sector because this is in everyone’s interest". Bruguera argued that a timid step in this direction had been made with the passing of the new SOCIMI Act but that Spain ought to emulate French and German measures for fostering a thriving rented housing market. 

For further information:
ignacio.ramon@esade.edu

Media Impact


Speaking at ESADE, Joan Josep Bruguera, Colonial’s President, said the firm will reach a share capitalisation of €2,800 m by July, putting it back among Europe’s biggest property companies. His remarks were made during a session moderated by José María de la Villa, Director of Institutional Relations.  The talk was one of a cycle forming part of ESADE’s Business Breakfasts, which are sponsored by Criteria CaixaCorp. Bruguera explained that "the capitalisation of the new Colonial puts us back where we were before the crisis and involves a leap from €230 m in assets to €2,800 m in July".

The new Board of Directors has thus managed to save a company that was hard-hit by  the recent property slump. According to Bruguera, the former directors took “rash decisions that went against the public interest and led to massive debts¿. Cardinal errors included: the merger with Inmocaral (because the assets acquired were highly sensitive to change and were badly hit when the property bubble burst); the purchase of Riofisa (for which far too much was paid, with the banks’ support); the acquisition of 15% of FCC (an operation funded by borrowings and where FCC’s shares plummeted on market falls).

The new management team had to decide whether to wind up the company or try to  save it. To rescue Colonial, it was imperative to put the firm back on an even keel after the massive €3950 m loss sustained in 2008. In February 2010, agreement was reached on debt restructuring and reduction "thanks to the issue of convertible bonds and equity to underpin the parent company’s debt". In addition, Bruguera noted that Colonial had "cut debt by €4,545 m  through the agreement with the bank" – almost half of Colonial’s debt when the new board took over the company.

Back to its roots

In the words of its President, "In the future we will do what we did in the past". Colonial has always been a property company that managed and rented its assets. We are now returning to the firm’s roots because office rental is our core business and is currently worth €5,132 m.

The offices we rent out currently show a 94% occupancy rate. The income generated comes from  three main markets: Paris (63%); Madrid (19%); Barcelona (16%).  Bruguera said that in future, the company would focus on Triple-A rated offices  on prime sites "because these areas are more price-stable and demand for such premises is holding up much better in the present property meltdown".

Prices have found their level

Colonial’s President mentioned the turmoil in the property sector worldwide and said that everyone had expected a "soft landing" after years of rocketing growth. However, "the international financial crisis put paid to the idea and the sector has come down with a bump".

As far as the future is concerned, Bruguera considered that "prices had found their level". He added that "Nine out of ten Spaniards hold property and these are the first to have an interest in maintaining its value. He also stressed the importance of putting housing within young people’s reach and noted that "tax incentives  are needed to foster the rental sector because this is in everyone’s interest". Bruguera argued that a timid step in this direction had been made with the passing of the new SOCIMI Act but that Spain ought to emulate French and German measures for fostering a thriving rented housing market. 

For further information:
ignacio.ramon@esade.edu