LAMDA DEVELOPMENT | The value of the de-risking recovering consumer
In this note we present Lamda Development, Greece’s leading retail real estate developer & manager and owner of the Hellinikon development master plan.We argue that having showcased impressive resilience during the recession, Lamda is well positioned to capitalize on a pick-up in economic activity, which will create favourable conditions for recurring rental growth combined with our expectation for yield compression on the back of sovereign de-risking. Our positive view is further supported by changing Greek consumer trends which gradually shift demand away from the high street and towards shopping centers.
We initiate coverage of Lamda with a ‘Buy’ recommendation and €8.30 TP, which is based on our assumptions for sustainable rental income growth of as well as yield compression for the existing asset base (including the extension of the Golden Hall shopping center). We also highlight that there is significant value creation tied to Hellinikon over and above our base case, should the project go forward.
Lamda Development is a real estate development group based in Greece. Co.'s main activities comprise investment, development and maintenance of innovative real estate projects. Co. operates in Greece, as well as in other neighboring Balkan countries mainly Romania, Bulgaria, Serbia, Montenegro. Co.'s operations are organized along two business segments: Real Estate; and Marine Services. Co. is a subsidiary of Lamda Holdings.
Eurobank Equities is a Greek-based firm offering research, sales and trading services to institutional, corporate and private clients. The company is wholly owned by Eurobank, one of the 4 systemic banks in Greece.
Research is the backbone of Eurobank Equities' platform, with a team of 4 professionals committed to generating actionable investment ideas by providing timely research products. We are committed to offering value-added services to clients by filtering market noise and providing insights on the multiple sectors that we cover. Our universe includes 26 - large, medium and small cap - companies whose market capitalization amounts to 80-85% of the total market capitalization of the Athens Stock Exchange. Our research team also maintains the capacity to generate ad-hoc research for micro-cap listed companies.
Our team has consistently gained recognition among institutional investors for its quality research, having ranked No. 1 team in Greece at the Extel Surveys of 2013-2016 and 2018. We have also been named Leading Brokerage Firm in Greece over 2014-2016 and in 2018.
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