Norwegian Property (Hold, TP: NOK12.90) - Synthetic lease drives Q2 beat, but limited free float set to cap shares
A higher top line helped the Q2 results beat our forecasts, boosted by a synthetic lease at Hasle (held in a special purpose entity). The NAV also rose QOQ to NOK15.9/share as we expected, following the share buyback. Despite this and an attractive P/NAV, however, we continue to believe the shares will not reach our NAV given the very limited free float. We reiterate our HOLD, but have raised our target price to NOK12.9 (12.6) on minor estimate changes.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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