Norwegian Property (Buy, TP: NOK17.00) - 21.6% NAV gain QOQ
With a NOK1.7bn or c10% marked-to-market asset value gain (in line with the figure guided by peer Entra) on lower yields, NPRO reported a Q4 NAV of NOK21.48/share. Rental income in Q4 was 13% above our estimate as the company booked rent from Snarøyveien 30 in December, one month sooner than we expected. However, we have cut our 2021e EPS by 22.3% and 2022e by 12.1% after updating our forecasts for normalised maintenance costs and a higher funding margin. We reiterate our BUY, and on our view of fundamental NAV upside, we have raised our target price to NOK17 (15).Norwegian Property operates in management, acquisitions, sales and development of commercial real estate, including participation in other companies as well as businesses which are related as such. Co.'s properties primarily comprise office premises with associated warehousing and car parks, and retail and catering space. Co.'s activities are organized in four business areas: marketing and letting; property management; property development; as well as transactions and financing. As of Dec 31 2013, Co. owned 41 office and commercial properties in Norway, located in Oslo, Baerum, at Gardermoen and in Slavenger.
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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