Colonial SFL SOCIMI S.A.

Reported first-half gross rental income was EUR 207 million, up 5% year on year; like-for-like gross rental income was up 4%, and management said underlying growth was 7% before disposals. EPRA recurring earnings were EUR 111 million, up 4%, and EPRA EPS was EUR 0.178, also up 4% on a stable share count of 627 million. Gross asset value stood at EUR 12.1 billion, net tangible assets were EUR 6.0 billion, net tangible asset per share was EUR 9.82, and loan-to-value was 36.7% versus December, down 39 basis points. For the full year 2026, management reaffirmed EPS guidance of EUR 0.34 to EUR 0.35 per share. They also said EUR 440 million of disposals are confirmed out of the initial EUR 500 million program, and liquidity was EUR 2.5 billion, covering debt maturities through 2029.

The CEO framed the half as a proof point for the company’s strategy: prime CBD assets are benefiting from polarization, projects are feeding future earnings, and capital recycling is advancing. He highlighted stronger letting activity, especially in Spain and Paris, and said this helps not only current-year P&L but also next year and midterm guidance. His tone was confident and defensive of the quality of the portfolio, while stressing capital discipline and saying the company remains focused on prime assets and attractive risk-adjusted returns, including the Berlin acquisition.

The CFO emphasized the mechanics behind the results: EUR 207 million of gross rental income, with EUR 8 million from like-for-like Prime CBD growth, EUR 6 million from Alpha X project deliveries, and a EUR 3 million drag from disposals. She said EPRA recurring earnings of EUR 111 million were driven by EUR 12 million of operating/project contribution, partly offset by EUR 8 million of higher financial costs and EUR 1 million from disposals. She also cited the balance-sheet metrics: EUR 2.5 billion of liquidity, average first-half debt cost of 1.9%, Moody’s Baa1 and S&P BBB+ with stable outlooks, and disposal execution of EUR 383 million already completed plus EUR 59 million to EUR 60 million committed. She spent significant time clarifying the different LTV calculations and said the company is following EPRA methodology, including dividend and payable items in the EPRA figure.

Analysts focused on three main areas: why annualized rent-free periods increased, why the EPRA LTV figures looked unusually high, and how much upside remains in the disposal program and Berlin acquisition. Management explained that the rent-free/incentive discussion partly reflects EPRA methodology and historical contract-base adjustments, while also noting Paris incentives on new leases are in line with CBD market levels. On LTV, management said the EPRA figure includes dividends/payables and does not yet fully reflect some secured but not executed disposals, and they acknowledged the disclosure may need checking because of possible table confusion. On Scope and the disposal program, management said Scope is around 15% occupied with interest building, and that the next disposal wave is likely to come from Spanish non-core assets and residential sales, with France available opportunistically. They also said the Berlin portfolio is underwritten for an ungeared IRR of 8% to 9% with potential upside from light CapEx and reversion toward higher rents.