Develop, grow, repeat blueprint
The Q2 results were broadly in line with our forecasts, as rental income continued to rise with the completion of another development. Olav Thon reported an annualised rental value run-rate of NOK2,880m (up 7.7% YOY), and a vacancy rate of just 2.9%. Tenants turnover increased 3.9% in Norway and 5.4% YOY in Sweden YTD. No new developments were started in Q2, but given its track record, we expect more to be started within 6–12 months. We keep our BUY recommendation and have raised our target price to NOK210 (200).Olav Thon Eiendomsselskap is engaged as a property operator. Co.'s property portfolio is broken down into the following property segments: shopping centres and commercial property. At Dec 31 2013, Co.'s shopping centres comprised the management of 87 shopping centres, of which 27 are managed for external owners.
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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