Fastpartner - Slight estimate changes on a solid report - ABG
Both CEPS and NAV trimmed by ~1-3% Relatively good funding conditions and low LTV Trading at ~40% below its 5y average Solid delivery on operational KPIs The top-line was 2% below ABGSC but newly announced leases and acquisitions lend support to our estimate revisions. Like-for-like rental income in H1’22 increased by 4.3% while property costs rose by 3.0%. The occupancy rate remained high at 92% vs. FPAR’s long-term target of 92-93%. Q2’22 also saw high activity on the transaction side, where SEK 376m was the highest net acquisition figure since Q1’20. Although, total investments was below recent quarters, there was an uptick in FPAR’s largest project, Hilton 2 (office, gym & restaurant with est. completion in Q2’22). Some estimated project completions have been delayed, which explains around half of the lower rental income in Q2 vs. ABGSCe, and the later effect of this is reflected in our estimate changes. Our property value outlook stays the same FPAR presented larger-than-expected value uplifts, partly driven by a 0.1pp lower average valuation yield. We also note a declining building rights value and an increase of its average interest rate by 0.5pp q-o-q to 2.1%. Along with a continuously challenging macroeconomic outlook, this leads us to push our earlier expectations for value declines in Q4’22 out to Q4’23. However, the increased values in Q2’22 force a sharper decline until Q4’23, explaining our lower EPRA NRV estimates. Reported net LTV is lower than the average in our sector (~46%) and ~50% of debt is in the bilateral bank market, which is currently performing far better than the capital markets. Trading -15% vs peers on P/IFPM, in line on P/NRV The share is trading at ~12x LTM P/IFPM and a ~40% discount to last reported EPRA NRV. These metrics are some 35-45% below FPAR’s five-year averages (19x on P/IFPM and 7% premium on P/NAV). Moreover, the share is trading at 15% below (P/IFPM) and in line with (P/EPRA NRV) vs. the average of its peers ATLJ, FABG, HUFV ... Läs mer på ABG Sundal Collier
