Montea Model Update for pipeline delays, no change to Target Price

Montea operates by the rule, “no tenant, no building” and almost completely avoids speculative development. On the recent analyst call, CEO JO De Wolf explained that speculative development remains possible if a single building is already more than 50% pre-let and is located in a sought after area. Currently, Montea has 322k of permitted land ready to start construction and is in exclusive negotiations for a large part of it. These take longer due to the size and complexity of new projects on aspects like sustainability, automation and building specs. In the Netherlands, access to the grid has also become an issue, but Montea explained that all sites have ample access to power. We believe the remaining Tiel sites (NL, 94k sqm GLA) look promising, but the Tongeren ones (BE, 99k sqm GLA) are in an oversupplied area. The delay of new developments has an impact on our EPS estimates as also our expected capitalisation of interest declines. We remain confident Montea can beat the EPRA EPS target 5.60 by 2027, but by a smaller margin.