Sveafastigheter - Initiation of coverage - Two-in-one
We believe Sveafastigheter standalone could get back to creating value in its sizeable residential development business and reinvest earnings from its SEK24.5bn portfolio of rent-regulated apartments. In our view, the segment is nearing an inflection point, backed by non-cyclical demand and our expectation of above-CPI rent increases for several years. The stock is trading at a 54% discount to NAV (sector average: 23%), which looks attractive given its 43% LTV and renewed balance sheet. We initiate coverage with a BUY and SEK47 target price.
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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