WOOD Flash – Graphisoft Park: 2Q18 recurring result in line, full-year guidance slightly moderate

Graphisoft Park reported its 2Q18 results yesterday (7 August), after the market closed. The results contained several one-offs, however, the recurring results were broadly in line with our forecasts. According to the report, blocks A and B of the new building in the southern development area were completed and handed over to the tenant in July; the two remaining blocks are expected to be delivered by the end of 3Q18E. This marks a slight delay vs. the original schedule, and management modified the 2018E guidance accordingly, decreasing the implied FFO from EUR 10.5m to EUR 10.1m, c.4% down. The change is hardly material, in our view. We note that FFO at this level would still represent slight upside to our 2018E FFO forecast of EUR 9.8m. As such, our investment case remains unchanged. Although we like the business model (and, trading at 9% FFO yield and c.0.6x P/NAV, the shares are not expensive), the 3-4% dividend yield Graphisoft Park offers is similar to that of companies such as GTC or CA Immo, both of which offer better growth profiles and diversification, in our view. We therefore continue to view the company as fairly valued.