Inmobiliaria Colonial SOCIMI (COL) Investor Update summary

Strategic rationale and market context

• Launching a Science & Innovation real estate platform with an initial €200 million investment in Spain, targeting a €2–2.4 billion pan-European platform in partnership with Stoneshield Capital.

• The sector is driven by megatrends such as demographics, technology, and geopolitics, with Europe seeing strong government support, capital inflows, and a projected 14% sector growth.

• Key locations include Madrid, Barcelona, Paris, Lisbon, Cambridge, and Amsterdam, all with robust ecosystems, strategic infrastructure, and high demand for specialized science and innovation spaces.

• The sector is underpinned by undersupplied lab space, expanding talent pools, and government support for onshoring innovation.

• S&I ecosystems benefit from proximity to universities, research centers, and dynamic business environments, fostering long-term tenant retention.

Investment structure and growth plans

• Initial acquisition includes 22 assets (130,000 sq m) in Madrid and Barcelona, with Colonial holding 90% of the property and a 50/50 asset management JV with Stoneshield.

• Short-term pipeline of €700 million identified for expansion within one year, with a long-term ambition to reach €2–2.4 billion in assets under management, leveraging third-party capital.

• The business model includes earning management fees as third-party capital is brought in, with Colonial's ownership expected to dilute below 50% over time.

• The joint venture structure enables rapid scaling, leveraging third-party capital and proven real estate value creation.

• The initiative is accretive to EPS and NTA, with a capital-efficient growth model and minor short-term LTV impact.

Portfolio characteristics and returns

• The portfolio comprises a mix of wet and dry labs (25%) and specialized office spaces for science and innovation tenants, with strong tenant stickiness due to high fit-out requirements.

• Assets are recently renovated or under transformation, with most built between 1990-2010 and average acquisition cost below replacement value.

• Deeplabs operates 22 buildings in Madrid and Barcelona, offering tailored lab and workspace solutions, and has achieved a 46% rental premium through asset repositioning.

• Expected stabilized yields on cost are 6-8% for the existing portfolio and pipeline, targeting a geared IRR of 15% and double-digit stabilized yields.

• The tenant base is diversified across life sciences, technology, energy, and aerospace, with top-tier clients such as Takeda, Bayer, and PerkinElmer.