WOOD Flash – ONE United Properties: 4Q22 – gross profit lags, but recent permits position ONE well for 2023E
Apart from the macro headwinds – inflation, rate hikes, economic uncertainty and geopolitical risks – ONE also had to navigate a more challenging permitting backdrop in Bucharest in 2022. The process often took longer than in the past, which prevented ONE from launching as many projects as it intended originally. The limited number of apartments on offer put a cap on the sales pace, which drove a miss vs. our top-line estimates. That said, in 4Q22 and 1Q23E, ONE received permits for several important projects, where a total of 3.7k apartments should be developed over the next three-to-four years. During 2022, ONE's portfolio of standing assets – which include the Bucur Obor shopping centre, which ONE purchased at very attractive price last year – started to generate rent. With low leverage and a strong balance sheet, fostered by the capital increase (ONE raised EUR 52m equity in August 2022, priced at 2.16x P/B), ONE is well-positioned to continue growing its market share in Bucharest, while expanding its portfolio of standing assets gradually. The share price seems to at least partially reflect this positive outlook, in our view. The risks include the high interest rates affecting affordability and demand, the higher cost of capital, permitting, and the ONE Modrogan legal dispute, among others.
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.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
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