Home Invest Belgium Model update after fair value increase and asset sales

We update our model after the EUR 50.8m fair value of investment properties increase and announced asset sales. It is both the 4.2% like-for-like rental growth in 1Q24 and the adjustment to the valuation methodology that drove the fair value increase. This increases the average fair value/m2 from EUR 3080/m2 at YE23 to approximately EUR 3286/m2. This compares to an average of EUR 3.364/m2 in the Brussels Region where HOMI holds 67% of its assets. The EUR 40.6m asset sales have a 2.0% negative impact on our FY24 gross rental income but increase our EPRA earnings by 1.6% due to lower financial costs as HOMI is 91% hedged. In line we increase our TP from EUR 17.5 to EUR 18.0. We repeat our HOLD recommendation for now given the undemanding valuation versus residential peers and the impressive YTD stock rally. HOMI will report 1Q24 results on 22/05/2024.