Norwegian Property (Hold, TP: NOK12.60) - Added to NAV in Q2
NPRO has bought back 54.8m shares, or 10% of its outstanding shares (DNB Markets acted as financial advisor and receiving agent for the share buy-back programme). With the deal done at 0.76x EPRA NNNAV, we have raised our FFO and NAV forecasts. Ahead of the Q2 results due at c08:00CETon 7 July, we forecast rental income down 15% YOY following asset sales in late 2018, but a c3–4% QOQ rise in NAV on the back of share buybacks. However, with a low free float, we are concerned the shares will continue to trade at a liquidity discount, and have assigned a HOLD recommendation (previously NO REC) and NOK12.6 target price (previously N/A).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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