Home Invest Belgium FIRST LOOK : FY22 In line, Never mind the Debt Ratio

The FY22 EPRA EPS of EUR 1.08 slightly beat our 1.06 FY22 EPRA EPS estimate. The outlook for EPRA EPS23 is set at 1.10 vs. our expectation of 1.11. Like-for-like growth amounted to 6.4%, mainly driven by indexation. The 4Q22 FV still increased because ERV increase compensated estimated cap rates increased 15bps from 4.85% to 5.00%. Cap rate expands more in NL and on older properties in BE.

The debt ratio currently stands at 52.0% (RREC), despite a 30m ABB in June last year. The management does not feel an urgency to reduce the debt level. Although the share price is trading around NTA and a capital increase would avoid dilution. This would enable them to bid for opportunities in the market.

The high ESG scores of its buildings add value as the current energy prices guarantees higher occupancy rates, now at 98.1%. We still like the residential space as long as a mild recession does not interfere with the indexation of rents and rent delinquency remains low. This could offer some opportunities for HOMI, but the balance sheet could use a bit more headroom.