Colonial SFL, Socimi S. A. (COL) Earnings Call Transcript & Summary

Good morning, dear shareholders. I'm really grateful to you for your attendance, and I would like to welcome you on behalf of the Board of Directors and on my behalf. This is the first time that we are attending this meeting telematically from our headquarters in Madrid in order to hold this AGM due to the limitations as a result of the sanitary crisis. As a result of COVID-19, the Board of Directors, after a reflection, has renounced to holding this physical attendance AGM -- with the physical attendance. I am sure that you agree that the current circumstances required, due to the reasons of protection of health, the holding of this meeting so that we can avoid the risks as a result of the cluttering of people. So due to this responsibility, we had to renounce to opening or extending an invite for physical attendance to our directors. And we don't have the possibility to meet you, our providers, our shareholders, et cetera, right after holding this meeting. Due to these circumstances, instead of holding the AGM with all the attendees, we only have the President, the CEO; myself; and Mr. Carlos; Mr. Ussel; the presidents of the Retributions and Nominations and the Control Committees; and Ms. Ana Peralta; Ana Bolado; Mr. Javier López Casado, among others, together with the Notary Public, who will open this act with a proper social distancing and otherwise protection rules; and the -- Mr. Adnane; and the Sheikh; and Juan Carlos García Cañizares; and Silvia-Mónica Alonso-Castrillo together with the people who make up this company are connected telematically. This AGM has been convened in accordance with the legislation and the articles of association. The call is well known by all of you, so it is considered to be read. We hereby verify the legal requirements for the valid constitution of this AGM, and I give the floor to the Secretary of the Council, Secretary of the Board.

Dear shareholders, as highlighted by the presidents, we need to verify that the legal requirements are met for the valid constitution of this AGM. The call was agreed by the Board of Administration, the Board of Directors of this company, and it was published as of May 25, and it was published in the website of the CNMV as well as the corporate site of the company. And on May 26, also, the call was published in the newspaper called Expansión. Due to the sanitary crisis caused by COVID-19, the Board of Directors agreed, and this was expressed in the call for the meeting, we offer the possibility solely to attend this meeting telematically and/or some proxies if it would be necessary. So as of June 4, the Board of Directors agreed that the Assembly General Meeting be held solely telematically by shareholders and their proxies in accordance with Royal Decree #8/2020 of March 17, establishing extraordinary urgent measures in order to tackle the economic and social impact of COVID-19 and in accordance with the joint communication between the registered association and the CNMV published in April 28, 2020. And the company published, as of the 4th and 5th of June, the call for this meeting, communicating that this AGM should be only held telematically. As you know, this meeting is held telematically. Even though in legal terms, it is considered to be held at the social headquarters of the Colonial company. And the general assembly is held on the second call. The Board of Directors has agreed to require the presence of the Notary Public. Mr. Jesús María Ortega Fernández show that he opens this act and who is among them, and I'm going to introduce the shareholders. The Notary has access to the application for telematic attendants, and he's going to be taking note of the number and the course of the votes cast telematically. We also report the shareholders that the current AGM session is being recorded through audiovisual means, which have been installed at these premises to that effect, and it's being broadcast live through the corporate website. So to this end, we report to the shareholders that this recording is going to be made readily available at the website of our company. We remind the shareholders and proxies attending telematically that they could issue their vote on the motions regarding the points which were included in the agenda from the moment of getting connected to the attendance of this meeting. And if they haven't cast their vote, they can do it until the secretary finishes with the summarized reading of the essential elements of the proposals or motions. At that moment, the voting will be closed. So in this sense, we remind the shareholders that would like to vote against or in blank or hold an abstention or if they want to abandon the meeting, they should communicate it through the field called Telematic Assistance or Telematic Attendance, which is established for it to be recorded in today's meeting's minutes. The voting shall be held in accordance with Article 22 of the AGM regulation through a negative deduction system. In this sense, we will consider votes in favor of those which correspond to all the present and represented shares, deducting the votes corresponding to the shares whose holders or representatives attending telematically manifest a vote against, in blank or abstention through telematic means. The votes corresponding to the shares whose holders have voted against in blank or manifested or stated their abstention through the distance communication means made readily available for the shareholders and the votes corresponding to the shares whose holders or representatives have abandoned the meeting prior to the voting of the proposal and who have reflected these abandonment through telematic means. We report that, as stated in the call for this meeting, in those cases where there is a conflict of interest, the representation will be considered to be granted if the proxy has not -- if the shareholder has not imparted specific instructions for -- to the secretary. And we announced that the call for the meeting, the complete texts, the documents approved by the Board and the modifications and amendments introduced in the text of corporate government and all the relevant information required by the law have been and are available at the website from Colonial since May 26 of this ongoing year. Now I proceed to inform about the data regarding attendance quorum for the purpose of verifying the valid constitution of this General Shareholders Meeting. We have present 21 shareholders holding 2,244,329 shares, which make up 0.417% of the equity capital. And represented at the Board, we have 158 shareholders holding 425,830,822 shares, representing 83% of the equity capital. The treasury stock amount right now to 370,610 shares, representing 0.710% of the share capital. So the share capital which is present or represented at this AGM is equivalent to 84.277% of the equity capital.

So the shareholders have been kept abreast of the attendance quorum, so we hereby declare constituted this General Shareholders Meeting during its second call in order to adopt the necessary agreements regarding all the points included in today's agenda. I give the floor to the Notary Public for him to ask to the attendees if there is any reservation or protest regarding these statements regarding the number of shareholders present and the capital represented.

In compliance with the established requirements of the regulation of the commercial registry, I would like to state that if the shareholders have anything against these statements regarding the list of attendees, they can click on contact -- on the contact link that appears on the telematic attendance part of your website, and if they do so, it will be recorded in the minutes. So Mr. Secretary, please continue.

Thank you very much. Mr. Notary. Now I give the floor to the President and the CEO, who are going to address you to talk about the most relevant milestones that have happened in society.

Dear shareholders, again, it is an honor for me to address you in this exceptional framework that we were alluding to when holding this year's AGM. We're going to submit to your approval, the points included in today's agenda. And we will also like to update you on the most relevant milestones regarding the economic activity in France and Spain. With the prejudice of the most extense report given to you by the CEO, I would like to state the following. I would like to talk about the year 2019, which makes up the bulk of today's agenda, which is something that we submit to your approval. The global situation allowed the property real estate industry to progress. And together with the management of our business at Colonial Group, this has meant that we have achieved the best results in our history. And given the economic situation and our management, we have been capable of achieving that great performance. And let me talk to you about our strategy, which you know, but which we believe might be interesting for you to know. Just to highlight a couple of brush strokes. First, our action in the prime sector of the 3 main markets that we are operating in, Paris, Madrid and Barcelona. Through a demanding management in order to optimize the asset valuation and the management of our financial policy in an active and cautious way, that has achieved the best qualifications in our sector and constant communication with our analysts and investors in the global market. As a result of that, we have been capable of achieving these great performance results that we have shared. But that, I would like to highlight. Last year's benefit was EUR 827 million, and it grew by 58% as regards to the previous years, the best result so far in our 73-year-long history. And the profitability for the shareholders was 16%, and the net asset value was EUR 11.5 per share, an increase of 14% with regards to the previous years. And the asset value, it moved from 12 -- it rose to EUR 12.196 billion, plus 9% in a like-for-like. And the revenue per rentals was EUR 352 million, an increase of 4%, and the recurring net benefit was EUR 139 million, with an increase of 38%. And these are the results which were presented in February that we submit to your acceptance, to your approval. Now let me refer to the things that have happened in the last 6 months. In April, we presented the results of the first quarter of the ongoing year, and we made significant progress in keeping with the results yielded in 2019. Regarding the volume of rentals, we closed the first quarter with EUR 86 million in terms of revenue derived from letting. And we increased in the like-for-like by 16% with respect to the previous years and the previous year. And the net result grew by 39%. Colonial closed the first quarter of 2020 with a net result of EUR 32 million, with an increase of 39% with respect to the previous year and a recurrent revenue of 36%. In March, we began with the first measures on the pandemic, which was already present in our country, in Spain as well as in France. COVID-19 is affecting significantly our domestic and global markets, and its impacts on the actions of Colonial and the economy in general is hard to foresee, but I can advance that this first half of the year, we're going to see some figures which are very sturdy and very much in keeping with the highlights of the first quarter. As of today, all the international organizations deem that there's going to be an important contraction during 2020 and an important drop in Europe's GDP, especially in the markets that Colonial is operating in, in France and Spain, whose governments are making decisions -- unprecedented decisions like restrictions in the freedom of movement. There is a majoritarian opinion that in the medium term, there's going to be a recovery of this economic impact way into the year -- way into the year of 2020. And the speed is going to vary depending on the country, which will depend primarily on the evolution of the sanitary crisis. The capital markets evolved with a high correction, high volatility derived from the reduced current visibility regarding the ending on the short or medium term to this crisis. So in this context, the priority set by Colonial was to ensure the health and safety of our teams as well as the continuity of our activity and the services that we render to our customers. Until now, the spreading of coronavirus hasn't had a significant impact in our employees nor Board of Directors. All the staff has been working remotely in keeping with our priorities and the recommendations set by the authorities. As of today, almost half of Colonial's staff is already rejoining their positions. Our activity is stable and the results of the first quarter, and I'm sure the second quarter, which is about to be published in a few days, are going to reflect the strength of Colonial's portfolio and the sturdiness of its business model. But these results still lack to reflect the potential impact caused by COVID-19, which began in March. So we are sensitive to the health of our customers and those who have been affected the most in their business activities. Colonial is holding one-to-one conversations in order to cater to everyone's needs. So the commercial team is negotiating some deferral exceptional measures or the payment or the deferral of the payment of rentals for those companies entering into some dire straits as a result of the banning of activities in the different industries. As of today, the impact of these negotiations in the P&L is lower than 2%, even though it could be placed at a maximum of 6% of 2020 revenues. This could be reviewed based on the duration of the state of alarm and the evolution of the pandemic. And this estimate is a result of the makeup of the assets where the retail sector is a minority or represents a minority stake. I would also like to highlight another urgent measure that we have undertaken regarding the financial situation. The financial situation of Colonial Group is solid with the rating of investment-grade confirmed by the end of April, taking into consideration the current circumstances of the group and the general environment. Well, the financial statements is showing a solid financial state, which is reflected in the fact that the LTV is 36% with an improvement of 300 bp in 1 year, a liquidity of more than EUR 2 billion -- EUR 1.9 billion in the first quarter. And together with the second loan, it is located -- it amounts to EUR 2 billion in April 2020. The liquidity surpasses 4x the maturity of the debt of 2020 and 2021, and it covers all the maturity of the debt until 2023, considering the nonrenewal of short-term IOUs. And the current liquidity is EUR 500 million. So Standard & Poor's have stated that the grading -- this rating is stable, BBB+, which shows our resilience and our solidity in financial terms. What is the situation of the markets? Let me just briefly address this. Since -- in March, we began to realize the pandemic might have severe impact on the economies. Well, the markets introduced many corrections to the stock exchange valuations. So the indexes are witnessing a great deal of uncertainty and oscillations, which is unprecedented. Our company is not an exception. And even though we are publishing data where we can show that our model is really resilient, even so, we are witnessing some decrease in stock exchange valuation. Which policies, which strategies are we streamlining for the sake of the future? I think that when faced with this framework, we need to address the following questions, which is the strategy that we are adopting in order to defend the value that stands for our shares -- for our shareholders. Our business model in the prime offices in the markets that we're operating in is going to continue to yield value and to capture value at the right moment of the cycle. And I believe that it's going to help us retain value at the moment when this might be affected by the uncertainty, which is cast regarding the future. Obviously, this strategy needs some backing. And the first question that you might address and that we pose is, is the demand going to be affected by the telework effect? The answer is yes, but not too importantly for our kinds of assets. We believe that remote working and/or telework is going to affect more certain industries which are less represented in our portfolio. And on the other hand, we have a minority representation of the retail sector. It's not our specialty. And we have been adapting the morphology of our spaces to cater to the needs of the leaders of the digital world. And we have also been including more co-working and flexi spaces offers in order to meet the needs of the future demand. And another vector in our strategy is that the average size and the configuration of our prime assets is adequate in order to harbor multi-tenant kinds of profiles so that it favors rotation without affecting the let-up rate. And the technical management of the assets has been streamlined in order to achieve the best ratings in the sector regarding optimization of consumption, decrease of emissions, et cetera, which reminds us of the fact that we are one of the leading companies in this industry, in this sector. And as I told you before, we have come up with a cautious and sturdy approach when managing our financial policies in order to achieve the best ratings. But even so, the uncertainty is something which is cast over our heads, but we believe that the resilience of our business model is really high. And we're going to persist with this strategy that I was commenting about. And at this stage, I'm convinced that the figures that we're about to publish are going to convince you of how resilient and sturdy our model is. Regarding the corporate social responsibility, which right now is encompassing more aspects regarding social, governance and environmental issues, the ESG policies. On this regard, we would like to say that Colonial aspires to have a leadership position in ESG with a pivoting vector, which is to guarantee sustainability with a model where quality is prioritarian. So we're fully committed with the 2030 agenda of the United Nations. There is a total of 17 goals, which are the sustainable development goals, and different measures included in that 2030 agenda that we're fully committed to. And we would like to lend support to the United Nations covenant signed in 2019, and we would like to renew the commitment with the 10 principles regarding human rights, fight against corruption, among others. So to that end, we have conducted an analysis, a full analysis, and we have streamlined an ESG strategy with the purpose of achieving the maximum level of excellence in ESG and sustainable investment so that we can provide to our investors and stakeholders the maximum profitability on the long term in a way which is adjusted to the risks entailed. And these were the most important milestones that I wanted to share with you from our strategy. And now if you allow me, I'm going to focus on the motions and proposals that we submit to your approval. These motions are in keeping in general terms with what was proposed by the previous AGMs in the previous years. The novelties is the reelection of 2 stakeholding directors, Sheikh Ali Jassim, Adnane Mousannif and Carlos Fernández González and the extension of the shares delivery plan, which was approved by the AGM in January 2014 by a period of 2 additional years. And the amendment of the Articles of Association and the regulation of the AGM in order to foresee or to include the telematic attendance of shareholders to the AGM. And we also submit to the approval of this AGM the distribution of a dividend of EUR 0.20 per share, maintaining the same distribution than the previous year. And the Secretary of the Board is going to give further details regarding these proposals regarding corporate governance and in keeping with the recommendations of the code of conduct for traded companies. I would like to mention the most important elements that have happened since the last AGM. Colonial has always been fully committed to good governance and has always tried to abide by the highest standards of diligence, ethics and transparency. The best indicator of this is that as of today, the recommendations of the code of good conduct are fully abided by our company as stated in the corporate governance report published every year. Regarding the separation of the Appointments Committee and the Retributions Committee, we consider that it is appropriate to maintain a joint committee catering to the current structure of the company. And regarding the number of independent Board members, it doesn't reach 50%, but we consider that taking into consideration the current share structure, the type of Board Directors, it is appropriate so that all the interests, all the stakes are properly represented in the Board. Regarding the makeup of the Board of Administration, the independent Board members, Carlos Fernández-Lerga and Javier Iglesias de Ussel have stated their will to bring out to their position as directors, and they are no longer members of the committees that -- the commissions that we were part of as a consequence of the fact that the maximum period has elapsed, as stated by the regulation. This is going to be formulated in the form -- in the Board that will be held after this AGM. This company is grateful to Carlos Fernández-Lerga for his devotion and the services rendered to Colonial and how hard he has been working in the Committee for Appointments and Retributions. And we would also like to acknowledge the work put in by Javier Iglesias de Ussel for his devotion and dedication and his participation as President of the Committee for Audit and Control. As a consequence of this, we have agreed that the Committee for Appointments and Retributions and the Committee of Audit and Control be presided by Ms. Ana Bolado and Ana Peralta, reinforcing thus our commitment to increase the presence of women in high-ranking positions of the company. In addition to that, we have foreseen that the Board of Directors appoint Luis Maluquer Trepat as new -- as newly appointed Coordinating Director. And lastly, we have amended the regulation of the Board of Administration of this company in order to determine the number of additional Board members that can be part of the Board of Directors. And I would like to thank the management of Colonial because they have been capable of managing things properly given these dire straits.

Well, good morning, ladies and gentlemen. After listening to our Chairman, Mr. Brugera, I'm going to explain in greater detail the aspects that have actually defined the evolution of the results of 2019. As pointed out by the Chairman, 2019 has been a very good year for Colonial's group and all of its shareholders. We have obtained some exceptional results and some landmarks in terms of activity and occupancy. So before I start talking to you about the evolution of the results in 2019, I'm going to talk about the first impacts and the response that Colonial has given to the COVID-19 pandemic. It is the most important matter that we are facing at the moment. The COVID-19 pandemic is affecting significantly both our markets, our domestic markets and the world markets. Its impact on Colonial's daily activity and on the economy in general is still uncertain and very difficult to predict. As of today, all international bodies have calculated a significant contraction of the global economy in 2020 and a significant fall in Europe's GDP and specifically the markets in which Colonial operates, Spain and France. Well, in fact, these falls are of about 12%, a very relevant drop in the GDP of Spain and France. What has Colonial done in this context? With this crisis, we can see that Colonial's portfolio and its current solvency situation allows us to manage the situation in a responsible way. The situation is -- managing the situation in a proactive way with a number of actions in different areas: on the health and social area, on the assets and customer area, the projects portfolio and the financial front. First of all, the health issues, the social issues and then the financial issues. First of all, what we've done is we have taken into account the health and social issues to then get into the financial management of the company with 2 phases. First, taking care of the management of the crisis itself and the impact on our customers to then prepare the future of our company. In the field of staff and personnel, we have working us within the context of flexibility with telework, remote work and with the policies of the company devoted to preserving our personnel's health and the company's work. In the field of customers, we want our buildings to be fully available and that the health of our customers and the operations are in the best possible way in all cases. With regards to assets, we have had -- well, we have had very limited exposure. The most affected sector is the retail sector, which is not very pleasant in Colonial's assets. And then in Utopicus, our co-working flexible work, we have set up preventive measures in all co-working, although there is full access to all work centers through access cards and by applying all of the required -- demanding requirements in each case. With regards to the project's portfolio, the impact has been limited. The works have continued in general terms, although we expect certain delays without relevant impacts from a financial point of view that could be deemed to be negative. We have decided to delay some investment programs, especially with regards to Méndez Álvaro, with an investment delay of about EUR 60 million, which will not be done this year but in the future. And of course, we have reviewed the criteria and investment policies according to a more prudent context. We have devoted a lot of effort, and our Chairman has mentioned it beforehand, to managing the financial profile of our company in order to make sure that it is even stronger in the new context. Colonial has always had a liquidity position that's very strong, above EUR 2 billion. In this context of pandemic, we have increased this liquidity position by EUR 200-additional million. We have carried out recent issues to make sure that the financial profile of the debt is even longer term with a 77% of the debt that has a due date beyond 2023. We have confirmed with our rating -- with the rating agencies as Standard & Poor's and Moody's, their credit ratings, which are BBB+ and Baa2 in a context in which the general rule is that these ratings are being reviewed in most of the context that we are surrounded by. And we have also worked on the management of the extraordinary crisis we have experienced in its first phase, the phase in which some of our customers have been forced to facing the effect of this crisis with negative consequences in their activities. What we've done is actually an individual management of each one of the cases, trying to always look for the best long term for our customers and for Colonial. And as of today, we can see that the impact that this crisis period that we have just closed has been in Colonial, has been very limited for Colonial. As you know, Colonial's clients and the type of assets we have are basically located in an activity segment that doesn't have a very high exposure to higher-risk sectors. As an additional piece of data, we could see that in April and May, well, we have not had any bad debt. And we have negotiated bonuses and delays for the payment of rent with customers that have been greater -- that have been impacted by COVID-19. And today, we can say that we have communicated to the market that now that these conversations process with our customers has -- is over, well, that the impact that it could have in the renegotiations with this client is below 2% of the total rent that the company has for 2020. So it is a financial impact that's quite limited within the context of what has happened so far. I'd like to say as well that Colonial has tried to manage this crisis context by taking care of its social corporate responsibility in this context of difficult times. And we have tried to respond to the consequences in the health front and in the social front. We have carried out different measures with a cost that will be close to EUR 1 million with contributions made to financial programs for research and health actions like the La Porte Hospital, in the clinic hospital in Barcelona, the Sant Joan de Deu Hospital, and also in France through the [ Pharmacie De Rang ]. Okay. Having said that, with regards to the crisis that we have managed during its first phase, I'd like to tell you what are the landmarks attained by Colonial in 2019. I'm not going to limit myself to what Colonial is because fortunately, it's the same. I mean every year, we present our activity. Colonial is still the -- it's a company that's easy to understand. It's a company with EUR 12 billion assets through 100 assets with more than 1,300,000 square meters above ground, basically occupied with a 2.7% of vacancy. So it's a company in which 94% of our assets are offices. Our [ sub-welfare ] is well. The management of the high quality of these assets, in fact, 76% of our assets nowadays are located in CBD areas. And I would add, by using this strict criterion of CBD, I mean assets that are truly located in prime areas. Now to talk about quality assets. I mean it's something that we look for, not only from the point of view of locations, but also the quality of the building itself and, specifically, its degree of sustainability. As of today, we have 92% of our buildings with energy certificates, which is a good point about the high quality of our portfolio. And then we have also bet on a geographic diversification with 59% of our exposure in the French market and 41% in the Spanish market. Another way of illustrating the quality of our assets is basically by observing the geographic location of our assets in Barcelona, in Madrid and in Paris where our assets enjoy an incredible location. And thanks to that, we have very, very limited vacancy rates, 2% in Barcelona, 4% in Madrid, 1% in Paris. Okay. Having made this short presentation about what Colonial is all about, now I'd like to share with you what has been the context of the markets we are in. 2019 has been an excellent financial year in general for markets, for all markets. What we can see on this graph is that the rents kept the expansion in a generalized way in all markets, 9% in Barcelona, 6% in Madrid and 6% in Paris, with vacancy rates in the CBD area that were really low, 1.7% in Barcelona, 6% in Madrid, 1% in Paris. Now if to this real economy vision, we add another financial vision, well, we have been enjoying some real estate yields in areas that have very low yields of about 3.5% in Barcelona, 3.25% in Madrid and 2.75% in Paris. Now what's important to bear in mind here and what it's important to highlight is that this limited feature about the yields, which have reached historical minima, is perfectly compatible with the fact that the spread for these yields over the interest rate, if we use, for example, the 10-year bond, is kept at very high levels, at levels above 300 base points in the case of Barcelona and close to this 300 base points in the case of Madrid or Paris. So even though we have -- we are at yields which are historically low compared to the interest rates in 2019, we are in environments of large spreads, and therefore, we can enjoy a great solvency. Now I'm going to describe the general business evolution in 2019. And I'd like to mention the specific situation at Colonial. At Colonial, in 2019, we have signed 139 contracts, which account for 236,000 square meters. In other words, these contracts we have signed imply short rents of EUR 93 million. And this activity -- this commercial activity has allowed us to leave Colonial's vacancy rate at 2.4%. So a commercial activity that has been very intense. 260,000 square meters is much above the historical average even for Colonial itself in 1 normal year. Now this with regards to the volume of activity. Now after that, what has happened with the rents, specifically? There are 2 ways to measure the rents which are typically followed by the market. One is to compare the rents that have been signed with the previous contract for that very same building, which is what you see on the left-hand side of the screen. If we measure it like that, the contracts signed by Colonial in 2019 have accounted for a larger rent equivalent to a 14% -- an increase of 14% compared to the previous contract. But there is another way of measuring the evolution of our rent, which is to compare the rents that have been signed with the market level, the market rent level, which was estimated for December 2018 in our own appraisals. And what we can see here is that our rent growth has been of 6%. And as you can see in this slide, what we need to highlight here is that this is a growth rate that occurs in all of our markets equally, 9% in Barcelona, 4% in Madrid, although it is 6% at the CBD area, and 7% in Paris. Therefore, it is a very general type of evolution. We could give you different examples to say that this is not the result of an isolated case. Now here, you can see, for example, the evolution in Madrid and some examples of refurbishments and renewals with significant increases compared to the already existing rents at the end of 2018. I'd like to highlight that in Madrid, we have signed 142,000 square meters. The maximum rent has been EUR 35. And out of these 140,000 square meters, there's a part of renewals, 80,000 square meters, but also a very significant portion of new rent. 60,000 new square meters in a single financial year is a very high figure. And the same thing can be said about Barcelona. Here we can see some examples of projects in which we have been working. And you can also see the high level of activity, 64,000 square meters rented out in Barcelona with a rent of 28 -- 29% of a rent growth compared to December 2018 compared to the previous contract up to 30%, and a very healthy composition and mix of renewals and new square meters. And Paris. I'd like to make a comment about Paris. 56,000 square meters for a market like Paris, which by nature, has a very low level of renewals because contracts are long term. So it is highly dependent on new square meters. The volume of activity in Paris has been substantial with 52,000 new square meters. And well, with new square meters, very significant, very significant activity in Paris as well. And here, we can say that a relevant role has been played by the signature of 20,000 square meters in the project Louvré Saint-Honoré with the Cartier Foundation and with a deadline that's compulsory of 20 years. Now this significant volume of commercial activity in the different markets and these high level of rents has implied a reduction, an additional reduction of our vacancy rate in Colonial in general. Colonial back in 2018 had a vacancy rate of 4%. And at the end of 2019, it has a 2.7% vacancy rate. And what we can actually see in this slide is that Barcelona and Paris were already practically in full occupancy. And in 2019, what Colonial has been working on is to reduce the vacancy related to Madrid and especially related to some specific assets that we have been working out in the last 3 years coming from the Axiare portfolio, the Axiare operation. The change has been a substantial one. If you see in 2018, the vacancy rate was 11% in Madrid. And after this hard work, vacancy was reduced to only 4.3%. A significant element at Colonial is that we do not carry out a passive management of our assets. But in fact, we boost a strategy for value creation through the development of projects and other delivery under the most successful terms possible. 2019 has been a year of intense activity from that point of view, too. We have delivered 3 large projects: Gala Placidia, Pedralbes Centre in Barcelona, and Bruselas 38 in Madrid. We're talking about more than 30,000 square meters of real estate transformation. And what's even more important, in these assets, the result of our actions has implied a growth in the value of these assets of more than 40%. Now this part related to value creation through the proactive management of our projects is, as I've just said, one of our quality seals, one of Colonial's seals. Colonial works with a portfolio of projects that is at about EUR 1.3 billion. These are assets that we aspired, that once they are over, they are finished, they should contribute to Colonial's revenues by EUR 85 million. This year, in 2019, there has been some progress in all fronts. We keep at the end -- not only at the end of 2019, but as of today, the same yield expectations associated to all of these projects. But specifically, I would say that there have been some progress, some substantial progress made in the commercialization and the delivery of some projects. We have delivered Castellana 163, and we are already preletting project as important as Louvré Saint-Honoré or Marceau. We have been recently finished in France our Diagonal 525 in Barcelona. So that means that these projects we're working on have a 33% of these rents that we hope to be already prelet or committed with some future tenants. As our Chairman has said, another very significant front of Colonial's activities is in the field that's not strictly financial but in the ESG landmarks, i.e., the sustainability landmarks. As Colonial's Chairman has said, we have adhered to the 10 compact human rights and they're strongly against corruption as an inherent part of our strategy. But I'd like to highlight as well that Colonial has been working in these front, human rights, work rights, the natural environment and the fight against corruption for many, many years. And in our context, we want to be -- we currently recognized -- for example, in 2019, we have maintained or increased the recognition of our activities in the field of sustainability. The MSCI index has reached a AA rating, improving our BBB we had 2 years ago in MSCI. EPRA, which is the reference indicator in our sector, is still kept at the gold level, the maximum level for fourth consecutive year. We were gold -- we have been gold since 2016. And we're the first company in Spain in obtaining this EPRA Gold in ESG. We have improved more than 16 points our EPRA. We have included Colonial in the Ethibel Sustainability and Excellence Europe, managed by Vigeo Eiris. We have kept the good practice rating in the FTSE4Good Index. So all of these are just tokens of our long-term strategy. In 2019, we have also obtained some additional recognitions. For example, GRESB has given Colonial in 2019 award for responsible real estate investment and thus, recognizes that Colonial is the company with the highest level of responsibility, with 92% of its portfolio with very high energy qualifications. And in this one, we can see that it's a long-term strategy. Already in 2017, we had EUR 8 billion of our assets. We'd had a little bit of VERDE certification, and this has been increased by 20%. We are in EUR 10 billion now, which is 92% of all of our portfolio. And I'd like to highlight here not only the work that's been carried out on the asset side -- on the company's asset side, but also on the side of our capital structure. We have already started working strongly, and thanks to the sustainability standards, the company's sustainability standards, Colonial has done things like formalizing 1 sustainable loan for EUR 200 million with the margin of these loan linked to the GRESB capitalization or also with these sustainable loans, we have also issued EUR 350-additional million for sustainable financing. So we're working not only on the asset, but also on the liability, on the asset side and on the liability side. If we had to give data that are more strictly related to the company's efficiency, we would give -- I'd like to share 4 examples with you. The increase in -- now green energy has grown from 32% to 58% in 2019. The -- our energy consumption was reduced by 4%. Our water consumption was reduced by 8% because the recycling of waste grew from 50%, up all the way to 83%. As you know, normally, all of these measures try to converge in an indicator, which at the end of the day is the carbon footprint, which summarizes the goodness of all of these polices. At Colonial, in 2019, we ended the year with a carbon footprint equivalent to 18,000 tonnes of CO2 equivalent -- 18,000 equivalent CO2 tonnes, which are 35% less than the previous year. And if we had to do it in like-for-like terms, if we look at the at the phases 1 and 2, which are under the company's control, we're talking about a 60% in terms of scopes 1 and 2. So even -- I mean these figures tend to be a bit vague. So we try to concentrate all of this in 1 piece of data, the intensity of our carbon footprint. How much CO2 do we consume per square meter in terms of kilograms? In 2019, the data for Colonial was 8 kilos for a comparable of 20 kilos. It's an extraordinary piece of data, not only compared to 2018, but also with regards to our environment. Eight kilograms per square meter is something remarkable when we compare it with the already existing information in our activity context. So this is what we have done with regard to the ordinary fiscal year of our activities. From a long-term perspective policies, Colonial has committed itself with the goals defined in the Paris Agreement and Colonial's management-approved measures to become carbon-neutral by 2015 -- 2050 and a 75% reduction by 2030. But I'd like to say that Colonial is carrying out part -- has already carried out part of this significant work. As of today, a large part of this commitment has already been reached. Now after talking about ESG, let me now get into the financial results for the company in 2019. I'm going to start out by giving you an overview of the rents. The rents have grown by 1% this year from EUR 347 million to EUR 352 million. So it's a significant impact with lots of divestitures we carry out normally. And that's why it is actually to use the like-for-like to measure different rents on comparable environment. If we measured it in terms of like-for-like for the same parameter, our rents have grown by 4%. Now this is a significant piece of data as well. This is remarkable given the growth rates in our sector, which are normally lower. The second point to be highlighted in this growth -- well, this rent evolution is that it occurs in all of our markets equally in Madrid, Barcelona and Paris. Now our investment activity has been part, in 2019, of a strategy that has an implementation framework that goes beyond 2019. Since 2015, we can see it clearly on this slide, Colonial has been developing a growth strategy that made it invest strongly during the first few years. Here we can see the organic growth for the company in which we invested approximately EUR 2 billion during these first few years. And to this, we should add some additional EUR 2 billion of growth that has -- have been attained through nonorganic growth, especially through the Axiare operation. And for 2 years now, the company paid attention to the value realization strategy and the divestiture strategy. And the last project have focused our efforts on the divestiture of assets that we believe did not have the right value creation for the future or that had already exhausted all of their potential value or they had -- they made no strategic sense. So we have bought EUR 160 million, and we have sold for EUR 477 million. Now these divestitures have been 100% in noncore sectors for us. Of course, the most important one to be mentioned is the divestiture carried out in our logistics portfolio, which we inherited from the Axiare operation. So what Colonial obtained is a greater focus on its prime location, CBD location of the strategy, which has increased up to 94%. And the second comment to be made about our divesting strategy, beyond it -- beyond the fact that it's all on noncore assets, well, they have all been made with significant primes over -- with a prime of 16% over the appraisal value. Now the acquisitions have been -- they have had a more limited scope, EUR 160 million. And here, it's exactly the opposite. What I would like to highlight here is that our acquisitions had been all carried out within the framework of having a prime product and a CBD location asset, for example, we have the Torre Marenostrum, the Parc Glories or the regulators operation. Now with all of this activity in terms of increasing rents and investments and divestitures, the final result is that the company's assets, which were worth, as of December 31, 2018, EUR 11 billion at the end of 2019. They have grown by 7%. If we discounted the fact that there's been a 2% of sales, in fact -- or related to sales, in fact, our assets have grown by 9% in 2019, which once again is very much above our competitors, our activity context and our record. And I'd like to highlight that a large part of this growth in the value of assets is not only related to the fact that the market in general has worked well from the point of view of the rents and the prices or the yield, which, of course, has contributed to this growth in the value of our assets. But there's a very significant part as well. I would say that almost 4%, almost half of our assets growth, is due to the delivery of projects in which Colonial has been working on. I mean what we used to call the Alpha strategy. The Alpha strategy, once again, is a very significant component in the growth of our assets' value. So the growth in the company's assets' value has -- I mean it has grown substantially. Now we would have to make a comment about our financial strategy. In 2019, we ended with the company's debt level of 36% with a cost of debt of 1.6%, as I've said beforehand, with significant liquidity lines of more than EUR 2 billion and with ratings of BBB+ or Baa2 in the case of Moody's, and we have started working in the field of ESG. Now the comment that this data deserve is that these are not the outcome of an isolated action, but they are an inherent part of the strategy and the company's determination and on the company's equity long term. We have been working on this for many years now. And for many years, we have been betting on looking for the lowest cost for the company and the longest term for the debt and its location in the field of bond -- of the bond market, the bond market and not in the bank debt market. And therefore, the reduction of the data in 2019 are just the outcome of a combination of this strategy for the company. Okay. Having seen the assets and the liabilities, what are the results for the group? What are what are the consequences of all of this in terms of the profit per share for the company? The group's net result has reached EUR 827 million, a 58% increase. The revaluing of the assets if we look at the recurrent results, we also observed an increase of 38% of EUR 101 million to EUR 139 million. And it's also important to go over these data interims of profits per share. And with regards to this piece of data, considering that Colonial has carried out some capital increase operations in the last few years, if we look at it from that point of view in the last year, the profit per share went from EUR 0.22 to EUR 0.27. In other words, an increase of 23%. Therefore, it is an upwards moving result. And if we corrected it and we took into account the divestitures carried out by the company, it would be even a higher increase of about 38%. So that's the vision in terms of the profit. We've seen the assets and the liabilities and the profit. What is the consequence of all of this in the -- our shares net value, the NAV? And what is the total result or the total return for the shareholder? As of December 2018, we were at EUR 10.03 in terms of value per share. The total company's NAV was EUR 5 billion, and at the end of 2019, our NAV is EUR 11.46, which reflects a net debt value of EUR 5.8 billion. If we believe that there is a dividend payment, which would imply adjusting this piece of data, the total return given to shareholders in terms of NAV growth for our assets plus dividend is of about 16%. And once again, we always look -- I mean we always try to explain where that growth comes from, as we can see on the right-hand side of this slide. There is a significant part, which, of course, stems from the rent growth, almost 4%. There is another significant part that comes from the yield compression, 4.6%. But as I pointed out beforehand, the renewal projects and programs are making a very significant contribution to this return. In 2019, it was equal to 7%, which is a very significant part of this 16-global percent. So it has been -- these are figures that are very satisfactory. Our Chairman has explained at the beginning that during the first quarter of 2020, we have kept this trend. I'm not going to talk about this now. Out of the data -- of these data, which are well known and they are part of the presentation we made, only -- I'd like to highlight only 2 pieces of data. The growth of our rent compared to ERB during the first quarter was equal to 6%, another very significant piece of data in absolute and relative terms, which has occurred equally in all of the markets. And the vacancy rate, which we have seen had been reduced substantially in 2019. It has kept its good trend in 2020 as well. In 2020, and this has been mentioned beforehand, we have also tapped the same strength in our capital structure. The company's balance sheet keeps a 36% of debt level. The rating has been confirmed, and we have accessed some additional liquidity, on the one hand, by issuing bonds in France for EUR 500 million at 8 years, and on the other hand, accessing syndicated, sustainable credit lines and financing lines as well. To end my presentation, I'd like to say that this year has been a record year in terms of profit, 16% growth, the company's NAV ended at EUR 11.5, 14% more. The assets value has grown by 9% in like-for-like terms. The value of rent, the income per rent have grown by 4% like-for-like as well. The recurrent profit is at EUR 139 million, 38% higher. If we measure it in terms of profits per share, we are talking about a EUR 0.274 increase. And the total profit is 854% more than the previous year. And all of this in a context in which the company basically has divested on -- it has divested, noncore assets for EUR 477 million. And as I've said at the beginning, it is a company that's ready to face the crisis with a very high level of uncertainty, and we'll need to wait because the -- it is -- these are complicated times. But we have a portfolio of prime assets, 76% of which are in the most resistant places with a vacancy rate of 2% and with projects that will contribute future value, which by 33% have already been pre-let, with the financial structure that's at 36%, with credit édit lines above EUR 2 billion and with debt maturities that go beyond 2024. So the only thing I'd like to do is to thank all of our suppliers and Colonial's personnel and staff members and also the support of all of the stakeholders that are on board with us and you, shareholders, specifically. Thank you very much indeed.

I have been reported that there have been no requests of abandonment. So we're going to do a summarized reading, the points regarding the yearly account. And I would like to give the floor to Mr. Secretary.

Well, the agreement says submitted to the approval of the shareholders are the ones that have been proposed by the Board to the AGM. No exercise has been made of the right granted by Article 519 of traded companies to submit alternative proposals other than the ones submitted by the Board of Directors, and no inclusion has been requested regarding additional points to be included in today's agenda. We would like to remind the shareholders that, as stated before, the voting of the agreement is foreseen by Article 22 of the regulation of the Board of Directors through a negative deduction system. Given the quorum of attendance in the second call of the AGM, it's enough to approve the motions by simple majority of the votes cast by the represented or attending shareholders. But point #5 requires a favorable vote of at least 2/3 of the capital with a right to vote. And we will need some enhanced majority also in order to approve point #9. So we will need absolute majority by the shareholders represented or attending. We would like to remind the shareholders and the proxies telematically attending that the period for the casting of the vote regarding the proposals or motions included in today's agenda will finalize at the moment in which the summarized reading of the key elements of the motions will be finished. And that will be the moment in which the voting will be closed. By virtue of Article 22 of the regulation of the Board of Directors, I would like -- of the AGM, I would like to summarize the key motion submitted for the approval by the AGM. We submit for the approval of the AGM, the individual accounts, yearly accounts of the company duly audited, closed by December 31, 2019, and we submit also for the approval of the -- by the AGM the yearly consolidated accounts duly audited, corresponding to the closed financial year as of December 31, 2019. The second point, we submit to the approval by the AGM is the proposal for the application of the results corresponding to the financial year closed by December 31. And we submit to the approval of the AGM, the distribution of a dividend of EUR 0.20 per share. And thirdly, we submit to the approval by the Board of Directors and the President of [ CED ], the management made by them. And point #4, we submit to the approval of the AGM the reelection of PricewaterhouseCoopers auditors as auditors for the account of the company and the Colonial Real Estate Group. And point #5, we submit to the approval by the AGM the authorization to reduce the minimum deadline for the call of extraordinary general meetings by virtue of Article 515 of the traded companies law. Point #6, we submit to the approval by the AGM the reelection of Sheikh Ali Jassim as Board Director, a stakeholding director of this company for a mandate of 4 years. And we submit to the approval of the Board, also the reelection of Adnane Mousannif with the qualification of stakeholding director of the company for 4 years. And lastly, we submit the approval of Carlos Fernández González as Board director with stakeholding capacity for 4 years. Point #7, we submit to the approval by the AGM the -- an extension of 2 additional years of the current share delivery plan is submitted to be approval by the GSM. And also the yearly report on remunerations by the Board members of 2019, which has been made readily available to all shareholders. Point #9, we submit to the approval by the AGM the amendment of Article #19 of the Articles of Association regarding the attendance rights of shareholders in order to include telematic attendance. Point #10, we submit to the approval by the AGM the amendment of Articles 7, 10 and 11 of the regulation of the AGM regarding procedure and deadline, right to information by shareholders and right of attendance and voting in order to include telematic attendance and voting by the shareholders. And we submit to the approval by the AGM, the inclusion of a new Article 12 repeated in order to include the telematic attendance of shareholders. Point 11, we would like to inform the shareholders of the amendment conducted in Article 13 of the regulation of the AGM in order to determine the number of additional Board members that can be covered by the Board members of the company. Point #12, we submit to the approval of the AGM the development and execution of the previous agreement to the President of the Board, the CEO, and Secretary of the Board and the Deputy Secretary of the Board. Point numbers 6, 9, 10 and 11 require stating that there are some reports drafted by the Board of Administration and by the committee of -- the Commission of Appointments and Remunerations. In addition to that, regarding point #2nd of today's agenda, we have made readily available the report regarding the modification of the proposal or motion to -- regarding the application of the profit and loss results, the distribution of reservations as well as the letter issued by the auditor of the company, ratifying that the decision adopted to modify the proposal for the application of the result and the distribution of reserves has not entailed a cause for a modification of his opinion included in the audit report. And in this moment, we hereby conclude the voting period for the motions included in today's agenda. As of now, I would like to inform the shareholders about the results of the votes cast regarding the motions that have been formulated by the Board based on the votes cast by the holders, by shareholders or proxies. Point #1, regarding the approval of the financial statements -- individual financial statements. A total of 99.4% of votes have been -- has been cast in favor. And regarding the approval of the yearly consolidated accounts -- financial statements, a total of 99.94% of votes has been cast in favor. Point #2, regarding the application of the result. A total of 99.99% of votes have been cast in favor. And regarding the dividend distribution, a total of 99.98% has been cast in favor. Point #3 of today's agenda regarding the management's report by the business management led by the Board of Directors. A total of 99.51% votes have been cast in favor. And regarding point #4, regarding the reelection of PricewaterhouseCoopers as auditor of Inmobiliaria Colonial for the fiscal year ended as of December 31, 2021, a total of 99.95% of votes have been cast in favor. Point #5, regarding the authorization to shorten the period for the calling of extraordinary general meetings of Inmobiliaria Colonial, a total of 94.66% of votes have been cast in favor, notwithstanding as standing -- as stating before. In addition to this, this percentage should represent at least 2/3 of the share capital entitled to vote. So in that sense, the percentage of 94.66% of votes cast in favor represents 79.68% of the share capital entitled to vote. So -- which means that we have surpassed the legal minimum requirements. Point #6 regards the reelection of Sheikh Ali Jassim as Director of the company with the status of Proprietary Director which has been approved by 72.25% of the votes in favor. Regarding the reelection of Adnane Mousannif as Director of the company with the status of Proprietary Director, it has obtained a 64.56% of votes in favor. And regarding the reelection of Mr. Carlos Fernández González as Director of the company with a status of Proprietary Director, a total of 70.91% of votes has been -- have been cast in favor of this motion. And the next point, which has to do with the extension of the share allocation plan approved by the General Meeting of Shareholders, has obtained 68.71% of votes in favor. And point #8 of today's agenda regarding the consultative voting of the yearly vote regarding the annual remuneration report of Directors of Inmobiliaria Colonial has obtained a 66.57% total of votes in favor. The point regarding the amendment of Article 19 of the Articles of Association has obtained a 99.99% votes in favor. And point #10 regarding the amendment of the Articles 7, 10 and 12 of the General Meeting of Shareholders regulation has been -- has obtained a 99.99% of votes in favor. And regarding the inclusion of a new Article 12 repeated, it has been voted in favor by 99.9% of voters. And regarding the modification of the regulation, it has an informative nature, so it has not been submitted for voting. And point 12 regarding the delegation of authority, it has been approved by 99.99% of the votes cast in favor.

After counting the votes and taking into consideration the information received regarding the votes against, in blank or abstentions stated to the Notary through the telematic means, we hereby approve all the motions regarding the points that were included in today's agenda submitted for voting. Mr. Notary Public will include in the minutes of today's meeting, the detailed number of vote in favor, against or in blank and abstentions. And the approved agreement and the results of the voting process will be completely published on the website of the company. By virtue of the current legislation and the regulation of the AGM, we hereby adjourn this meeting. And I would like to thank you for your attendance. Thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]