Kungsleden (Buy, TP: SEK67.00) - Setting a new course for growth
The CEO stated at the Q1 presentation that Kungsleden’s transformation phase is complete, and that it is now a quality asset office company with the goal of NOI growth and value-adding developments. Q1 was overall in line with forecasts, but with some deviations on cost lines. We continue to expect yields to rise, but that the valuation impact from rental growth will be stronger. We reiterate our BUY recommendation, while we have raised our target price to SEK67 (60).Kungsleden is a property company based in Sweden. Co.'s property holdings consist of commercial premises in Greater Stockholm, Malardalen, southwest Sweden and growth towns in Norrland. The portfolio is segmented into Office, Industrial/warehouses, Retail and Other. Co.'s operating segments are properties, which manage and develop properties and provides premises for external customers; and Nordic Modular, which lets modular buildings in a corresponding way as traditional premises and also produces and sells modules to external customers. As of Dec 31 2013, Co. had 366 total properties, of which 139 were offices, 135 were industrial/warehouses, 68 were retail, and 24 were other properties.
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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