COLONIAL et Mutua Madrile?a parveinnent a un accord portant sur la contribution de 7 immeubles de bureaux au centre de Madrid evalues a 351,7 mE

- L'opération sera financée pour moitié par une augmentation de capital de Colonial entièrement souscrite par Mutua Madrileña. Ainsi Mutua Madrileña deviendra le deuxième actionnaire principal de Colonial avec plus de 6% de son capital social.

- L'opération renforcera la présence de Colonial sur le marché des bureaux de qualité du centre de Madrid.

- L'entrée de Mutua Madrileña dans le capital de Colonial lui permettra de diversifier son exposition aux marchés de Paris et de Barcelone.

Barcelona, 8th September 2005. - Colonial and Mutua Madrileña Automovilística have reached an agreement whereby Colonial is to buy seven of the office buildings that Mutua owns in central Madrid, valued at E351.7 M based on a CB Richard Ellis valuation.

The transfer shall take place as follows:

- Colonial shall acquire properties valued at E178.1 M (51% of the contribution) through a sale-purchase transaction financed by the credit lines the Company currently has.

- Mutua Madrileña shall contribute properties valued at E173.6 M (49% of the contribution) via a capital increase by Colonial that is to be fully subscribed by Mutua Madrileña and so making it Colonial's second largest shareholder with a 6.2% stake.

The properties involved in the transaction are located in central Madrid around the Paseo de la Castellana, the Spanish capital's most prestigious business district, at the following addresses: Recoletos 37-41, Miguel Ángel 11, Castellana 43, José Abascal 56, Almagro 40, López de Hoyos 35 and Sor Ángela de la Cruz 3. The assets contributed have a total surface area of 85,000 m2 and are more than 98% let to top-tier companies.

This acquisition strengthens Colonial's Madrid market position, at a time when the office market in the heart of the Spanish capital is showing signs of an upturn in rents and occupancy. The operation would take Colonial's rental assets under management close to E4,800 M, some 54% of which are in Paris, 26% in Madrid and 20% in Barcelona.

This operation also ushers an institutional investor of recognised standing and solvency into Colonial's shareholder base. Mutua Madrileña has both an in-depth knowledge of and an established presence on the Madrid property market that should help strengthen and develop Colonial's current strategy.

Mutua Madrileña focuses its real estate investments on the Madrid market and owns office buildings valued at E1,500 M. The deal should enable it to diversify its exposure into the Paris and Barcelona office markets, with half the transaction to be financed through the capital increase by Colonial to which the insurance group shall subscribe in full.

Colonial's Board of Directors shall meet in the course of next weeks to convene an Extraordinary Shareholders' Meeting, in the aim of adopting the terms of the abovementioned capital increase.

About Colonial

After acquiring SFL in June 2004 and reaching this agreement with Mutua Madrileña, Colonial is now the reference point on the rental market for high quality offices in the Parisian, Madrid and Barcelona business centres.

The inclusion of Mutua Madrileña as a Colonial shareholder with more than a 6% stake strengthens the institutional profile of the property group's shareholder base, which also includes the Spanish savings bank La Caixa, Dutch pension fund PGGM and numerous other pension funds and Spanish and international investors.

The Colonial group's revenues at the end of the first half of 2005 totalled E610.1 M. Meanwhile, its net attributable profit came to E230.4 M, or a 1339% increase on the figure recorded in the first half of 2004.

About Mutua Madrileña

Mutua Madrileña is the first Spanish insurance company in profitability and solvency. Its portfolio is made up by 1.8 million policies distributed in the different branches where it operates. Its market share in Madrid is a 40 %.

In 2004, the Group Mutua Madrileña obtained a net profit of 370.8 million Euros. The company has a staff of 900 persons and holds shareholder's equities of near to 1,700 million Euros.

Mutua Madrileña holds a 1.09 % stake in Banco Santander turning it into the principal individual shareholder. The insurance company is the owner of a 30 % of Autoclub Repsol, the motorists' major club in Spain.