Fastpartner - Third quarter of weaker NOI-margin - ABG

Rec PTP -7% vs ABGSCe, -8% y-o-y
Fastpartner delivered a Q2 report with rental income of SEK 574m (-1.4% vs ABGSCe) with a margin of 73.6%, driving NOI of SEK 423m (-3.7% vs ABGSCe). The NOI margin declined 1.0pp y-o-y (3rd consecutive quarter of y-o-y decline) and was 1.7pp below ABGSCe. While operating lines were slightly below our estimate, net financial expenses were slightly lower than we anticipated, with redeeming effects on rec. PTP, which ended up -7% vs ABGSCe. The occupancy rate was more or less flat q-o-q at 92.5% (92.6% adjusted for projects, down 0.1pp q-o-q).

Uneventful on value changes and net LTV
Property value changes were flat in the quarter (at SEK 3.4m, or <0.1% of property value) compared to our estimate of SEK -145m (-0.4%). Net LTV remained steady at 47.8% vs. the Q1'24 levels of 47.7%, and the average interest rate decreased 20bps q-o-q to 4.5%.

Conclusion
While operating margins continue on their softening trend, occupancy remains at ~93% which is high for Fastpartner historically speaking. With a high share of floating interest debt, Fastpartner is well positioned to reap the rewards of a more favourable interest rate environment, evidenced by average rate improving by 20bps q-o-q. We note that all three projects which were planned for completion in Q2'24 have been delayed to now be completed in Q3'24, albeit with the total sqm in ongoing projects being up-sized from 3.7% of total sqm in Q1'24 to 5.1% in Q2'24.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/fastpartner/Equity-research/