WOOD Flash – Lamda Development: 1Q24 – with the wind in its sails

Lamda – the largest and most liquid listed play on the Greek real estate – reported its 1Q24 results yesterday (12 June), after the market closed. Its portfolio of four malls continues to generate robust rental growth, underpinned by the turnover growth of its tenants. The marinas are also performing very well. At the Ellinikon, the apartments are selling quickly, with prices that appear ahead of the original budgeted levels. Around half of the first-phase residential apartments have been sold already or reserved. For the Ellinikon malls, the rents are also exceeding the levels we assumed in our initiation, published this time last year. The overhead costs are higher than we expected initially but, if Lamda is able to deliver the first-phase Ellinikon projects largely on budget, the higher sales prices and rents at both the existing malls and the malls under development should drive substantial upside for our forecasts for both earnings and NAV. The gradual growth in the NAV should then help pull share price higher, in our view. Front-loaded sales (Lamda is due to sell around 50k sqm plots at the Ellinikon to third-party developers this summer, we estimate) could help the momentum of the stock, as they accelerate cash inflows and book a value uplift.