Aedifica Model update after new guidance

Aedifica reported results 1.8% above our EPRA earnings expectations and increased the FY24 guidance from EUR 223m EPRA earnings to EUR 231m (+3%) or EUR 4.85 vs EUR 4.70 EPRA EPS previously. The difference comes from higher rental income and lower than expected financial costs and taxes. In 1H24, the rental income is driven by 3.2% like-for-like growth, above our expectations, of which +0.5% positive exchange rate differences. Active management of the investment program led to EUR 22.0m projects being withdrawn from the pipeline which results in EUR 101m remaining development capex to be spent over FY24-27. The fair value corrections on the standing assets bottomed out over 1H24 driven by the UK market. The EUR 261m total development pipeline continued to have a downwards correction over 1H24. In this note we summarize the analyst call, update our estimates and explain our view on the results. We repeat our ACCUMULATE recommendation and EUR 68.0 TP.