Eurocommercial Properties Megastore sale of EUR 14.1m above fair value

Yesterday Eurocommercial sold its recently developed EKO megastore for EUR 14.1m. The store is located as a standalone unit next to its Grand Samarkand shopping Centre (Sweden). It is part of the strategy to focus solely on shopping centres. The extension was completed in 1Q25 and let to EKO via a 10y lease. The development had a YoC of slightly above 8.0%. The exit yield is significantly lower at 6.3% which is above the latest reported fair value. This signals an ongoing undervaluation of the portfolio despite the 3.1% fair value increase over FY24. This triggered us, combined with the recently announced refinancing of two debt maturities, to increase our target price from EUR 25.0 to EUR 28.0. The refinancings of the secured facilities decreased the risk profile of the company as it will increase the average debt maturity from its 3.3 years at year end 2024. Accumulate rating repeated.