Property group Colonial hopes asset valuations will pick up soon, profit doubles
Sees most of its asset valuation repricing behind
Net profit doubles in first quarter
Forecasts EPS in 2024 between 0.30 and 0.32 euros
Recasts story with outlook, adds CEO quote in paragraphs 2 and 10, analyst comment in paragraph 7, YTD share move in paragraph 10
By Matteo Allievi
May 13 (Reuters) -Spanish real estate group Colonial COL.MC said on Monday the European Central Bank's expected interest rate cut soon should halt the drop in valuation of its assets, as the firm reported that first-quarter profit doubled from a year earlier.
"We don't exactly know whether asset repricing is over, as monetary policy is still in an uncertain phase, but we believe that the major adjustment in asset values took place in 2023," CEO Pere Vinolas told reporters.
Real estate companies such as Colonial and Spanish peer Merlin Properties MRL.MC earn profit on the rental of their assets and are required to include the impact of an updated valuation of their properties every six months in their results.
Without the updated valuation of its assets, Colonial's net profit in the first quarter doubled to 54.5 million euros ($58.81 million), supported by inflation-linked rental income and high occupancy rates.
The company updates its asset valuations only twice a year. At the end of 2023, its asset valuations were 9% lower than a year earlier, Colonial said in February.
The real estate sector has been under pressure since the end of 2022, as volatile markets and tightening financial conditions have slowed property investment.
The European Central Bank is expected to cut interest rates in June after keeping them at a record high since last September, which should make investments in real estate more attractive.
"In the first half of this year, asset valuations may continue to fall slightly, but as interest rates fall we expect to see stable or slightly higher valuations by the end of the year," Renta 4 analyst Javier Diaz said.
Colonial's portfolio, which includes buildings in Spain and France, rose 6% year-on-year in like-for-like rental income as lease contracts were adjusted upwards due to high inflation.
Occupancy in the buildings rented by the group was at 97% on average, with properties in Paris at full levels.
Colonial's shares have dropped more than 10% year-to-date as of Monday's close.
($1 = 0.9256 euros)
Reporting by Matteo Allievi; editing by David Latona, Jason Neely and Susan Fenton
Mga Kaugnay na Asset
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.
