Barcelona’s office rental sector improves as Colonial releases 23 million new shares and purchases €10 million office

Barcelona (ACN) – Barcelona’s office rental sector seems to be improving after years of decreasing sales. Real estate company Inmobiliaria Colonial has set the tone by releasing 23 million new shares. Colonial is one of the leading companies in the Spanish and European office rental market. Besides releasing new shares, Colonial has also bought the main office of food multinational company Gallina Blanca. The property, positioned on L’Hopitalet del Llobregat’s Plaça Europa, one of Greater Barcelona’s business districts, has an area of almost 5,000 square metres and has been sold for €10.4 million. While the office rental market in the rest of Europe already improved in the first half of 2014, Barcelona and the rest of Spain has lagged behind. Occupancy rates for Barcelona offices had reached their lowest level for 16 years. Now, tt looks like they are already catching up in 2015, but further operations will have to confirm this trend.

With the release of the new shares, Colonial is looking for financial growth. Together with the purchase of the Gallina Blanca offices, this forms part of a new strategy to recover from the crisis. The Plaça Europa purchase is an important part in this strategy. It contains a long-term contract with Gallina Blanca, positioned in a stable business area in Greater Barcelona and should set a new recognisable standard for their customers. 

Refinancing and restructuring

While all this does sound good, the company is actually still struggling since the financial crisis of 2008. Due to the financial and property crisis in Spain, the company had to make some major decisions and needed to change the financial structure as well as the strategy of the organisation. Four investors, including the Royal Bank of Scotland, became the major shareholders in 2008 and the leading strategy was to focus on Colonial’s traditionally core business, the office rental market.

Despite the changes, business remained difficult for Colonial until 2011. At the end of 2010, a strategic agreement with French subsidiary SFL changed a lot. The agreement allowed Colonial to add offices in Paris to its portfolio, which paid off the following year. After three years, the prices of the office rental market in Barcelona finally stabilised and Colonial returned to profit.

Time for improvement

The profit from 2011 had an enormous effect on the stock market. The shares from Colonial rose from almost nothing to €5.00 per share. The price per share dropped to €1.50 in 2012 and kept dropping until it reached the 50 cent mark in March 2014. Since it reached this level, the value has stayed stable and is still trading at between fifty and sixty cents a share. But, their new strategy is likely to have an effect and the office rental market might get back on a growth track soon.