L'Assemblee G?n?rale des actionnaires de COLONIAL approuve l'augmentation de capital au titre de la participation au capital de Mutua Madrile?a

- Mutua Madrileña Automovilista disposera de deux voix au Conseil d'administration de Colonial, du fait de l'acquisition de 10% du capital social de la société immobilière.

- A la clôture du troisième trimestre 2005, Colonial a généré un bénéfice net part du groupe de 252,7 millions d'euros, soit une progression de 471% relativement aux bénéfices du troisième trimestre 2004.

Barcelona, 21 October 2005. Colonial Group's Extraordinary Shareholders' Meeting held today adopted the capital increase envisaged in a deal whereby Mutua Madrileña transfers seven central Madrid office buildings that it owns with a total value of E351.7 M.

More specifically, shareholders adopted the capital increase planned in this agreement, by virtue of which Colonial is to issue a total of 3.68 M new shares for E47.161 each, or a total of E173.6 M.

Two-stage operation

Mutua is subscribing to this capital increase in full through the non-cash contribution of two buildings that are valued at E173.6 M and that form part of the asset transfer deal. These are located at José Abascal, 56, and Paseo de Recoletos, 37-41, Madrid.

Colonial's purchase of the other five buildings from Mutua, valued at E178.1 M, shall complete the deal. Like the two buildings contributed, the five being purchased are in central Madrid, along the length of the Paseo de la Castellana — the Spanish capital's most prestigious business district — at the following addresses: Miguel Ángel 11, Castellana 43, Almagro 40, López de Hoyos 35 and Sor Ángela de la Cruz 3.

New major shareholder

Apart from the 6.2% shareholding in Colonial's equity that Mutua acquires from subscribing to the capital increase in full, the insurer has said it is reinvesting the E178.1 M proceeds from the building sales in Colonial stock.

In this respect, Mutua has an agreement with la Caixa, Colonial's largest shareholder, for the insurance firm to buy a 3.8% packet of shares from la Caixa and so take its total stake in the property company to 10%.

To reflect the new ownership structure, Colonial's Extraordinary Shareholders' Meeting also adopted the appointment of six new Directors. Two new Colonial Board members have been appointed to represent Mutua Madrileña: Ignacio Garralda and Jaime Lamo de Espinosa. The other four — Miquel Noguer, Manuel García, Javier Godó and Manuel Raventós — were proposed to represent la Caixa, which with around a 40% stake remains Colonial's main shareholder.

Strengthened leading position in office sector

Alfonso Cortina, Colonial's Chairman, said the deal strengthens Colonial's leadership in the office building rental sector in the business centres of Paris, Madrid and Barcelona.

Colonial's CEO, Juan José Brugera, said in his speech to shareholders that the operation with Mutua enables Colonial to obtain an excellent portfolio of office buildings located in Madrid's leading business districts. This is at a time when the Spanish capital's office market is beginning to show clear signs of an upturn. He also underlined that the entry into the Company's shareholder base of a new shareholder like Mutua, of recognised standing, shall strengthen Colonial's strategy, given the insurer's in-depth knowledge of the Madrid office sector.

Q3 results

As part of the Extraordinary Meeting, the CEO unveiled Colonial's end-Q3 2005 results. The most significant figures that the property company recorded in the period include E252.7 M in net attributable earnings, some 471% above the previous year.

This expansion was thanks to widespread growth in all Group business lines, feeding through into E765 M in sales, or a 64% improvement on the level recorded in Q3 2004.

Rental business:

By business line, there was a noteworthy advance in the Colonial Group's rental income, to E213.8 M at end-quarter, or 64% more than in September 2004. Some E133.4 M or 62% of this consisted of revenues from France and the other 38%, or E80.4 M, to Spain.

These healthy developments in rental income unfolded in a general context characterised by a modest upturn on the Colonial Group's three main markets of Paris, Barcelona and Madrid. Together with the Company's strategic bet on these markets' leading and most central business districts, this factor enabled an increase in overall occupancy for Group property to 94%, from 92.3% at the end of Q2.

Meanwhile, asset sale revenues totalled E350.5 M, of which E208.7 M was from assets in Spain and E141.8 M from properties in Paris.

Residential development and land business:

Book sales of housing and land respectively equalled E144.6 M and E56.2 M. This gave a total of E200.8 M, or a 74% increase on September 2004. Favourable performance in the development business's margins — again among the sector's largest — enabled a 336% improvement in this activity's Ebitda, to E95.7 M.

Commercial sales of housing in the first nine months of 2005 came to E164.9 M, representing a 63% expansion on the same period in 2004. This growth was boosted by commencement of marketing for important developments like the enlargement to Villa de Vallecas in Madrid and Can Matas at Sant Cugat, Barcelona.

Stock re-rates by 71%

The stock market continues to price in the strategy implemented by the Colonial Group: the share price has re-rated by 71% in the first nine months of 2005.

On 18 October, Colonial distributed a E0.41 per share interim dividend from 2005's results. This represents a 16% increase on the interim dividend in October 2004.