The Spanish real estate company Colonial announced a 5% increase in net profit for Q1 to 38 million euros or ($41.8 million). This was facilitated by the growth of the company's income from the rental real estate sector, associated with an increase in demand and the degree of occupancy of premises.
All this, in turn, is due to the general price inflation in the real estate market, which motivated many people to prefer to buy. The real estate sector has been under inflationary pressure since the end of last 2022. Economic instability and tightening of lending conditions and rising interest rates have led to a reduction in investment in the country's real estate sector.
Colonial's asset portfolio includes buildings in Spain and France. In the first quarter, total rental income increased by 11% year-on-year. The occupancy rate of the premises reached a record 97%, although facilities in Paris, not Spain, played a big role here. The company's forecast remains the same — earnings per share of the company by the end of 2023 will be from 0.28 to 0.30 euros.
Although COVID-19 has changed the working conditions for many people, the practice of working from home has developed, Pere Vignolas, CEO of Colonial, claims that the income from renting office space is also not decreasing. Demand is growing due to the return of people to full-time participation in the work process and the development of hybrid home-office employment schemes.