Warimpex confirmed at HOLD, TP EUR 1.45 - Well performing office segment, FX and valuation risks
We confirm our HOLD recommendation for Warimpex with a new TP of EUR 1.45 (was EUR 1.75) after an analyst change. Warimpex has a solid office portfolio with good core tenants and despite the crisis rising occupancy levels in its new buildings, should support rental revenues from the office segment providing stability in a time where revenues on its two hotels are impacted. In our view, the biggest valuation risks stem from FX depreciation (especially RUB) and portfolio valuation effects related to the crisis. These factors resulted in declines of almost EUR 0.5-0.6 per share in EPRA triple NAV and IFRS NAV in 1H and are among the main drivers behind our lower TP. Nevertheless, the company is going into this crisis with significantly lower leverage than it had in the past (although still above peers) and has a compelling office development pipeline that could drive the fundamental performance in the coming years.Warimpex is a real estate group based in Austria Co. is a "hybrid" real estate company that develops and operates properties itself as an asset manager and property owner until the time at which the highest added value can be realized through sale. The majority of these projects is located in Central and Eastern Europe. Co. has developed real estate with investments including hotels in the five-, four- and three-star categories. In addition, Co. also develops office buildings and other real estate. Accordingly, Co. generates revenue from the operation of hotel properties and the letting of commercial and office space while simultaneously realizing proceeds from real estate sales.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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