Hufvudstaden (Hold, TP: SEK122.00) - Retail market rent guided down by 4–17%
The Q2 earnings miss was mainly explained by higher than expected rent discounts, as Hufvudstaden has been giving some of the largest rent discounts. With asset values down a further c2%, it guides for a 4–17% decline in retail market rent QOQ and flat office market rent. As we expect a further fall in asset values (office market rents are flat in reported NRV), we reiterate our HOLD despite the 39% NRV discount. We have cut our target price to SEK122 (136) on our new 2022e NAV.Hufvudstaden AB is a property company that owns and manages 30 properties, located in the central parts of Stockholm and Gothenburg, Sweden. Co.'s principal area of business is the ownership, development and management of commercial properties. The holdings comprise commercial properties with office and retail tenants, divided between three business areas: Stockholm City East, Stockholm City West and Gothenburg. The office tenants are to be found in sectors such as banking, finance, law, information technology, media and recruitment. Store tenants include international brands as well as Swedish retailing chains. Co. also carries on its own parking operations through Parkaden AB subsidiary.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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