Kojamo (Hold, TP: EUR21.00) - Q4 beat, but FFO growth set to slow
Kojamo is still evaluating whether to sell its 3,600 homes outside the Helsinki, Tampere and Turku regions; we expect an announcement shortly, and believe a sale of these high-yield assets could improve the NAV and overall asset quality for Kojamo, but are concerned lower key cash-flow multiples would have the opposite effect short-term. Q4 FFO beat our forecast and consensus on a combination of minor positive deviations and a hefty NAV gain, as the EPRA yield valuation of assets was lowered to 3.5% (down c30bp QOQ). We reiterate our HOLD but have raised our target price to EUR21 (20.5).Kojamo Oyj is a Finland-based private residential real estate company. It offers rental apartments and housing services for tenants primarily in the Helsinki region, the Tampere, Turku, Kuopio and Lahti regions, as well as in the cities of Oulu and Jyvaskyla. The Company's portfolio comprises over 35 000 rental apartments. The Company operates within two segments: Lumo and VVO. The Lumo segment includes commercial housing services and apartments primarily are free from restrictions under state-subsidized housing loans (ARAVA) and/or interest subsidy legislation. The VVO segment includes the rental apartments subject to restrictions on rent levels under ARAVA and/or interest subsidy legislation.
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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