Eurocommercial Properties Biggest fair value gains since 2016

ECMPA reports results slightly below our expectations. The difference comes from a doubling of investment expenses vs FY23. The FY25 guidance is in line with our expectations. It will be a year with some temporary vacancy during remerchandising projects. This was already guided by the management at 1H24 so the outlook is in line with CSS. ECMPA realised the biggest fair value gains on its portfolio since 2016 with a 3.1% uplift. The bulk came in 2H24 and from the BE and IT portfolio. This led to a decrease in the debt ratio from 42.5% to 41.30%. Further FV uplifts in FY25 could have decreased the debt ratio to 40% in FY25. Given the rise in the 10y yield in the last 2 days, that is not our base case anymore. At a CoD of 3.2%, no bond refinancing and a 80-85% hedge ratio in the coming years, the bottom line will still be positively impacted by ECB interest rate cuts. While the increase of the last 2 days in the 10y yield is unprecedented, the EURIBOR 3m went from 3.46 to 3.50. Therefore our case of a 2.5% EPS CAGR in the next 3 years still holds, despite the lack of new investments. Accumulate and EUR 25.0 TP repeated.