Aedifica First look: Strong operational results, EPRA earnings boost by FBI

Aedifica has beaten our estimates by reporting EUR 76.2m gross rental income (KBCSe EUR 74.6m), EUR 55.3m EPRA earnings (KBCSe EUR 47.8m) and EUR 1.39 EPRA EPS (KBCSe 1.19). The difference in EPRA earnings mainly comes from the FBI ruling of EUR 6.2m settled in the first quarter. The like-for-like rental growth stands at 4.8% of which 5.8% rent indexation. LFL growth in Germany is lower than expected which is likely due to operators facing headwinds. There is 20 bps yield expansion QoQ mainly driven by the Nordics and the Netherlands. We believe there is a larger pushback from Dutch operators resulting in capped indexation. This results in a EUR -50.4m fair value correction, double of our EUR 25.0m estimate. Despite the fair value correction, the debt to assets ratio remains flat at 43.6% and EPRA NTA increased to EUR 79.95 per share. Yesterday Aedifica confirmed its EUR 3.7 guided DPS. Shareholders are given the possibility for an optional stock dividend at EUR 67.31 PS. A maximum of 1.776M new shares will be issued. We will update our model but maintain for the moment our EUR 101.0 TP and BUY rating.