Immobel - Good quality but not the right time
We adjust our estimates given the ongoing real estate market and postpone the sale of the office assets (ca. EUR 150m) to 2024.We expect that the start to 2023 was relatively good for IMMO, but we are less certain about H2.In line with our study, we increase the WACC to 7.7% to account for the higher risk in the market for a developer, and the higher interest rates.We downgrade IMMO to ‘Hold' and decrease our TP to EUR 42.0 (from EUR 59.0). The impact mainly comes from the higher WACC which has a large impact on the terminal value.Compagnie Immobiliere de Belgique SA (Immobel) is a Belgium-based company active in the real estate development sector. The Company operates in three lines of business in Belgium, Luxembourg and Poland, such as office properties, the residential sector and land banking. Its clients include: the state, the European Union (EU) and/or institutional investors for office complexes; private clients for residential property and land purchases, as well as private clients looking to invest in housing. The Company's main projects in Belgium include Belair, Black Pearl, Parc Seny, Gateway, Bella Vita and Chastre Rue Du Chene. Its main projects in Luxembourg include Westside Village, Green Hill and Galerie Kons. Finally its main projects in Poland include Cedet, CBD One and Okraglak.
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