Another good performance and stable values

Weekly Real Estate Matrix

Performance and valuation data for Nordic real estate stocks as of 10 May 2024.

Weak quarter, sound outlook

Messy quarter, negative est. changes. Asset rotation set to continue. Several reasons to buy the share; BUY, TP SEK 155

Swedish policy rate cut, an upgrade and a downgrade

Sweden’s Riksbank cut the policy rate this week to 3.75% (4.0%); our estimates are based on another four cuts by end-2025. During the week we upgraded Veidekke to BUY, downgraded Castellum to HOLD, and reiterated our HOLD on Kojamo and SELL on Hufvudstaden and Sagax. The average implied EBITDA yields on the stocks we cover are 4.40% for 2024e and 4.79% for 2025e.

Hufvudstaden (Sell, TP: SEK115.00) - Vacancies on the rise

The Q1 results provided the market with no relief for its concern about the Stockholm office and retail rental market strength, as the company missed on revenues and saw an increased vacancy rate. We have cut our EPS by 5–6% for 2023–2026 and our target price to SEK115 (120), and reiterate our SELL.

Clear increase in vacancies

Castellum AB: 2 directors

A director at Castellum AB bought 3,633 shares at 126.950SEK and the significance rating of the trade was 42/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly ...

Balder (Hold, TP: SEK70.00) - Uptick in investment activities

Q1 PFPM was in line with our forecast but 3% below consensus. We believe the negative share price reaction was due to: 1) a minor uptick in NIBD despite the recent equity raise for Balder and Sato; 2) LFL rental growth of 3.7% YOY, below most peers’; and 3) cash flow down sequentially due in investing activities. We have cut our 2024–2025e FFOps by 5–7% on interest rates, and reiterate our HOLD and raise our target price to SEK70.

Weekly Real Estate Matrix

Performance and valuation data for Nordic real estate stocks as of 3 May 2024.

Castellum (Hold, TP: SEK135.00) - Unconvincing Q1 results

We have downgraded to HOLD (BUY) and trimmed our target price to SEK135 (136) following rather soft Q1 results that showed a risk in vacancy adding concern about the rental market outlook. We consider the stock fully valued, given only an 10% NAV discount (adjusted for Entra at market value) and its soft FFOPS growth outlook.

On track

European occupancy continues up. Minor estimate changes for '25e-'26e. Trading above key peers, we reiterate HOLD.

Q1 reporting continues

This week, Castellum and Balder reported Q1 results, Wihlborgs announced a new lease, and SBB corrected 2023 profits and dissolved Unobo. Norges Bank has signalled interest rates might stay higher for longer. K2A has halted preference dividend payments. The weighted-average implied EBITDA yields on the stocks we cover are 4.69% for 2024e and 4.97% for 2025e.

Stockholm continue to stand out

Lowering its sights

Taking down its ambitions with new targets although we appreciate the lowered pay-out ratio. Higher probability of a DPS already for 2024.

Wallenstam AB: 1 director

A director at Wallenstam AB bought 16,000 shares at 47.180SEK and the significance rating of the trade was 55/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly...

Weekly Real Estate Matrix

Performance and valuation data for Nordic real estate stocks as of 26 April 2024.

Q1 reporting season kicks off

Q1 reporting season kicked off this week, with results from Nyfosa, Entra, Wallenstam, Fabege, KMC Properties, Pandox, and Catena. In other news, Public Property Invest is to be listed on the Oslo stock exchange on 29 April. The weighted-average implied EBITDA yields on the stocks we cover are 4.75% for 2024e and 5.04% for 2025e.

Enough is enough

The FABG share is down 25% YTD vs. the sector at -7%. Valuation support from both NAV and CEPS. Up to HOLD (Sell), TP of SEK 90 reiterated.

Fabege (Hold, TP: SEK85.00) - Rental market concerns remain

We have cut our 2025–2026e EPS by c6–4% on rising market interest rates, following a soft Q1 report, where focus was on a further weakening Stockholm office rental market. We found net lettings disappointing at SEK-36m and the minor vacancy rate uptick soft. We reiterate our HOLD, but have cut our target price to SEK85 (100).

Pandox (Hold, TP: SEK175.00) - Q1 in line, fairly valued

Q1 FFOps was in line with our estimate but below Infront consensus. While we have made only minor forecast changes, following the recent share performance and as the stock is trading close to our target price, we have downgraded to HOLD (BUY) but reiterate our SEK175 target price.