WOOD Flash – Graphisoft Park: 2Q23 – occupancy stable, FFO yield at 17%, developments could push it up to 20+%
Graphisoft Park has reported yet another set of good results. The annualised 2Q23 FFO translates into a 17% yield on the current share price. With its portfolio booked at around an 8% yield, the valuations offer a tangible buffer over the c.5.75-6.5% prime yield reported for Budapest offices by leading realtors. While we cannot rule out further yield expansion, the almost full occupancy of the Park seems a testament to tenants’ loyalty. This could mean that continued rental growth, driven by indexation, could partly offset the impact of prospective further yield widening on values. Development of additional GLA could push the FFO yield north of 20%, in our view. The remediation of the Northern part of the Park would be an important trigger, allowing room for an additional 40k+ sqm of GLA. While its size and liquidity mean that Graphisoft Park will remain a pick for a niche audience, we continue to see the stock as one of the most compelling value opportunities in our CEE real estate universe. As we are getting closer towards the peak rates, we may see the market starting to position for the eventual easing ahead at some point in the next 3-6M. This could help sentiment towards real estate stocks in the coming months.Graphisoft Park SE Ingatlanfejleszto Europai Rt is a Hungary-based company engaged in the real estate operations. The Company operates as a holding and provides management, financial and administrative services to its subsidiaries. As of December 31, 2011, the Company operated two subsidiaries, Grpahisoft Park Kft, engaged in the real estate development; and Graphisoft Park Services Kft, responsible for property operation tasks. The total area of the Company's properties was nearly 18 hectares. As of December 31, 2011, the Company's two subsidiaries, Graphisoft Park Universitas Kft and GP3 Kft merged into Graphisoft Park Kft. As of December 31, 2011, the Company's parent entity was Graphisoft SE.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
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