Inmobiliaria Colonial : The company announces a capital increase through an accelerated bookbuild offering

FOR INFORMATION PURPOSES ONLY. SPANISH VERSION PREVAILS.

Pursuant to Section 228 of the restated Spanish Securities Market Act (Ley del Mercado de Valores) approved by Real Decreto Legislativo 4/2015, de 23 de octubre, Inmobiliaria Colonial, SOCIMI, S.A. ("Colonial" or the "Company") hereby discloses the following

The Board of Directors of the Company has resolved to carry out, pursuant to the authorization granted by the General Shareholders' Meeting of June 29, 2017, a share capital increase for cash, with exclusion of pre-emptive subscription rights, for a maximum nominal amount of up to EUR 107,118,250, by means of the issuance of up to a maximum of 42,847,300 ordinary shares with a nominal value of EUR 2.50 per share, of the same class and series as the currently outstanding shares (the "New Shares"), representing up to 10.92% of the current share capital of the Company (the "Capital Increase"). The New Shares will grant their holders the same rights as those granted to the holders of the outstanding shares from their registration in the accounting records of the Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A.U. ("Iberclear").

The Capital Increase will be carried out through a private placement by means of an accelerated bookbuild offering process exclusively directed to qualified domestic and foreign investors (the "Placement").

Furthermore, the Company expects that the size of the Placement may be increased by selling treasury shares at a price equal to the issue price resulting from the Placement.

1. RATIONALE

   The main rationale of the Capital Increase is to ensure and optimise the financing of the tender offer over the shares of Axiare Patrimonio SOCIMI, S.A. ("Axiare") not owned by Colonial that was announced on November 13, 2017 (the "Bid"). Nevertheless, given that the outcome of the Bid is not yet known, all or part of the net proceeds may be used for general corporate purposes of Colonial.

2. ISSUE PRICE

   The issue price of the New Shares will be determined through an accelerated book-building process among qualified investors (see section 4). Shareholders of the Company that have representation in the Board of Directors of Colonial, and who have the status of qualified investors, have expressed their commitment to subscribe shares for an effective amount of more than 300 million euros at a price of 7.89 euros per share.

3. ADDRESSEES OF THE CAPITAL INCREASE

   The Capital Increase will be solely addressed to qualified investors, as defined, (i) in Spain, in Section 39 of the Real Decreto 1310/2005 de 4 de noviembre, por el que se desarrolla parcialmente la Ley 24/1988, de 28 de julio, del Mercado de Valores, en materia de admisión

   a negociación de valores en mercados secundarios oficiales, de ofertas públicas de venta o suscripción y del folleto exigible a tales efectos; (ii) in the other EU Member States, as set out in the relevant domestic legislation implementing Directive 2003/71/EC of 4 November 2003; and (iii) in other countries, in a manner such as that investors may have such condition or equivalent category, in accordance with each jurisdiction's applicable law so that according with such law, the Capital Increase does not require to be registered with or approved by any competent authority. As a consequence, the issue and sale of the New Shares does not constitute a public offer of securities in any jurisdiction. Notwithstanding the foregoing, none of the New Shares nor the treasury shares have been or will be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States. The New Shares and, if applicable, the treasury shares may only be offered, sold or otherwise transferred in offshore transactions outside the United States as defined in, and in reliance on, Regulation S under the Securities Act.

4. DESCRIPTION OF THE PLACEMENT

   The Company has entered into a placement agreement with J.P. Morgan Securities plc (Sole Global Coordinator y Joint Bookrunner), Goldman Sachs International (Joint Bookrunner), Kempen & Co N.V. (Joint Bookrunner), BNP Paribas (Co-Bookrunner), Crédit Agricole Corporate and Investment Bank (Co-Bookrunner) and Natixis (Co-Bookrunner) (the "Managers") containing customary terms and conditions for this type of transaction. Furthermore, the Company has agreed to a lock-up commitment on customary terms during a period of 60 days from the date of admission to trading of the New Shares on the Stock Exchanges of Madrid and Barcelona, subject to customary exceptions for this type of transaction and excluding transactions in the context of the Bid (including potential corporate transactions involving Axiare following the closing of the Bid) and sale of treasury shares following prior notice to the Sole Global Coordinator and Joint Bookrunner.

   Following the publication of this regulatory announcement, the Managers shall explore, during a period that is expected to finalize on November 29, 2017 no later than 8:00 a.m., the existing demand of New Shares among qualified investors, using reasonable efforts to procure subscribers for the New Shares.

5. RESULT OF THE PLACEMENT

   Once the private placement process is finalized, the Company will publish the results by means of a relevant regulatory announcement, including the final number of New Shares to be issued and, if applicable, the number of treasury shares to be sold, as well as the price resulting from the Placement.

6. APPLICATION FOR ADMISSION TO TRADING

   The Company will apply for admission of the New Shares to listing on the Stock Exchanges of Madrid and Barcelona and to trading on the Automated Quotation System (Sistema de Interconexión Bursátil), with no need for registration and approval by the Spanish Stock Market Regulator (Comisión Nacional del Mercado de Valores) of a prospectus.

7. REPORTS

In compliance with the provisions of the Real Decreto Legislativo 1/2010, de 2 de julio, por el que se aprueba el texto refundido de la Ley de Sociedades de Capital, in the context of the Board of Director's resolution to increase the share capital with exclusion of pre-emptive subscription rights, the corresponding director's report has been issued and the mandatory report issued by Ernst & Young, S.L., acting as independent expert, has been obtained. Such reports will be made available to the shareholders in the manner and time prescribed by applicable law.

In Madrid, November 28, 2017.

THIS ANNOUNCEMENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT INTEND TO BE COMPLETE, IT IS SUBJECT TO CHANGES AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN OR IN ANY OTHER COUNTRY OR JURISDICTION WHERE THE DISCLOSURE OF THIS INFORMATION MAY BE RESTRICTED BY LAW. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR CONTAIN AN OFFER TO SELL NOR AN OFFER FOR THE PURCHASE OF SECURITIES IN THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN NOR ANY OTHER COUNTRY OR JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A REQUEST OF FUNDS, SECURITIES OR ANY OTHER SORT OF COMPENSATION, AND NO COMPENSATION WILL BE ACCEPTED AS A RESPONSE TO THIS ANNOUNCEMENT.

THE SECURITIES HEREIN REFERRED TO HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT") OR UNDER THE APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES OF AMERICA. ACCORDINGLY, THE SECURITIES MAY NOT BE OFFERED, EXERCISED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION OR AN EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OR IN ANY OTHER COUNTRY OR JURISDICTION OTHER THAN IN COMPLIANCE WITH THE APPLICABLE LAWS OF THAT COUNTRY OR JURISDICTION. THERE WILL BE NO PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES OR IN ANY OTHER COUNTRY OR JURISDICTION.

NO PROSPECTUS OR OFFERING DOCUMENT HAS BEEN OR WILL BE PREPARED IN CONNECTION WITH THE VALUES TO WHICH THIS INFORMATION REFERS. ANY INVESTMENT DECISION IN CONNECTION WITH THE VALUES TO WHICH THIS INFORMATION REFERS MUST BE MADE ON THE BASIS OF PUBLICLY AVAILABLE INFORMATION. SUCH INFORMATION HAS NOT BEEN INDEPENDENTLY VERIFIED. THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS FOR BACKGROUND PURPOSES ONLY AND DOES NOT PURPORT TO BE FULL OR COMPLETE.NEITHER

THIS REGULATORY ANNOUNCEMENT NOR ANY OTHER DOCUMENTS OR MATERIALS RELATING TO THE SUBJECT MATTER OF THIS ANNOUNCEMENT SHALL BE DISTRIBUTED IN THE UNITED KINGDOM, SAVE AMONG THOSE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AS DEFINED IN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (AS AMENDED, THE "FINANCIAL PROMOTION ORDER"); (II) FALL WITHIN ARTICLE 49 OF THE FINANCIAL PROMOTION ORDER; OR (III) ARE PERSONS TO WHOM AN INVITATION OR INDUCEMENT TO ENGAGE IN INVESTMENT ACTIVITY (WITHIN THE MEANING OF SECTION 21 OF THE FINANCIAL SERVICES AND MARKETS ACT 2000) IN CONNECTION WITH THE INFORMATION TO WHICH THIS ANNOUNCEMENT RELATES MAY OTHERWISE LAWFULLY BE COMMUNICATED OR CAUSED TO BE COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS THE "RELEVANT PERSONS").THIS REGULATORY ANNOUNCEMENT AND ANY OTHER DOCUMENTS

RELATING TO THE INFORMATION TO WHICH THIS REGULATORY ANNOUNCEMENT RELATES ARE DIRECTED ONLY AT RELEVANT PERSONS AND MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS REGULATORY ANNOUNCEMENT AND ANY OTHER DOCUMENTS OR MATERIALS RELATING TO THE INFORMATION TO WHICH THIS

REGULATORY ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.

J.P. MORGAN SECURITIES AND GOLDMAN SACHS INTERNATIONAL, KEMPEN & CO N.V., BNP PARIBAS, CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK AND NATIXIS (TOGETHER, THE "MANAGERS"), ARE ACTING EXCLUSIVELY FOR THE COMPANY AND NO-ONE ELSE. THEY WILL NOT REGARD ANY OTHER PERSON AS THEIR RESPECTIVE CLIENTS AND WILL NOT BE RESPONSIBLE TO ANYONE OTHER THAN THE

COMPANY FOR PROVIDING THE PROTECTIONS AFFORDED TO THEIR RESPECTIVE CLIENTS, NOR FOR PROVIDING ADVICE IN RELATION TO THE CONTENTS OF THIS ANNOUNCEMENT OR ANY TRANSACTION, ARRANGEMENT OR OTHER MATTER REFERRED TO HEREIN.

NEITHER OF THE MANAGERS OR THE COMPANY NOR ANY OF THEIR RESPECTIVE AFFILIATES, DIRECTORS, EMPLOYEES, ADVISERS OR AGENTS ACCEPTS ANY RESPONSIBILITY OR LIABILITY WHATSOEVER FOR/OR MAKES ANY REPRESENTATION OR WARRANTY, EXPRESSED OR IMPLIED, AS TO THE TRUTH, ACCURACY OR COMPLETENESS OF THE INFORMATION IN THIS ANNOUNCEMENT (OR WHETHER ANY INFORMATION HAS BEEN OMITTED FROM THE ANNOUNCEMENT) OR ANY OTHER INFORMATION RELATING TO THE COMPANY, ITS SUBSIDIARIES OR ASSOCIATED COMPANIES, WHETHER WRITTEN, ORAL OR IN A VISUAL OR ELECTRONIC FORM, AND HOWSOEVER

TRANSMITTED OR MADE AVAILABLE FOR ANY LOSS HOWSOEVER ARISING FROM ANY USE OF THE ANNOUNCEMENT OR ITS CONTENTS OR OTHERWISE ARISING IN CONNECTION THEREWITH.

IN CONNECTION WITH THE VALUES TO WHICH THIS INFORMATION REFERS, THE MANAGERS AND ANY OF THEIR AFFILIATES MAY TAKE UP A PORTION OF THE SHARES AS A PRINCIPAL POSITION AND, IN THAT CAPACITY, MAY RETAIN, PURCHASE, SELL, OFFER TO SELL, OR OTHERWISE DEAL FOR ITS OR THEIR OWN ACCOUNT(S) IN SUCH SECURITIES, ANY OTHER SECURITIES OF THE COMPANY OR OTHER RELATED

INVESTMENTS IN CONNECTION WITH THE VALUES TO WHICH THIS INFORMATION REFERS OR OTHERWISE. IN ADDITION, CERTAIN OF THE MANAGERS OR THEIR AFFILIATES MAY ENTER INTO FINANCING AGREEMENTS AND SWAPS WITH INVESTORS IN CONNECTION WITH WHICH SUCH MANAGERS (OR THEIR AFFILIATES) MAY, FROM TIME TO TIME, ACQUIRE, HOLD OR DISPOSE OF THE SHARES OF THE COMPANY. ACCORDINGLY, REFERENCES IN THIS ANNOUNCEMENT TO THE SHARES BEING OFFERED OR OTHERWISE DEALT WITH SHOULD BE READ AS

INCLUDING ANY OFFER TO, OR DEALING BY, THE MANAGERS OR ANY OF THEM AND ANY OF THEIR AFFILIATES ACTING IN SUCH CAPACITY.

THE MANAGERS DO NOT INTEND TO DISCLOSE THE EXTENT OF ANY SUCH INVESTMENT OR TRANSACTION OTHERWISE THAN IN ACCORDANCE WITH ANY LEGAL OR REGULATORY OBLIGATION TO DO SO.

THIS ANNOUNCEMENT MAY INCLUDE STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE, "FORWARD-LOOKING STATEMENTS". THESE FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, INCLUDING THE TERMS "BELIEVES", "ESTIMATES", "PLANS", "PROJECTS", "ANTICIPATES", "EXPECTS", "INTENDS", "MAY", "WILL" OR "SHOULD" OR, IN EACH CASE, THEIR NEGATIVE OR OTHER VARIATIONS OR COMPARABLE TERMINOLOGY, OR BY DISCUSSIONS OF STRATEGY, PLANS, OBJECTIVES, GOALS, FUTURE EVENTS OR INTENTIONS. FORWARD-LOOKING STATEMENTS MAY AND OFTEN DO DIFFER MATERIALLY FROM ACTUAL RESULTS. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE THEY ARE MADE.

THE MANAGERS, THE COMPANY AND THEIR RESPECTIVE AFFILIATES EXPRESSLY DISCLAIM ANY OBLIGATION OR UNDERTAKING TO UPDATE, REVIEW OR REVISE ANY FORWARD LOOKING STATEMENT CONTAINED IN THIS ANNOUNCEMENT WHETHER AS A RESULT OF NEW INFORMATION, FUTURE DEVELOPMENTS OR OTHERWISE.