Another good performance and stable values

Corem (Hold, TP: SEK9.50) - Soft operations, rising vacancy rate

We see the key positives as Corem’s recent bond issues and our estimate that its bond repayments and capex are covered in 2024. However, a rising vacancy rate brought a top-line miss in Q1 (the economical vacancy rate was 14%, up from 11% in Q3 2023 and 13% in Q4 2023). We reiterate our HOLD and SEK9.5 target price.

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.

Kojamo (Hold, TP: EUR10.50) - Q1 miss, FFO forecasts reduced

The Q1 results fell short of expectations on a rising vacancy rate, and higher property and financing costs, resulting in FFO 14% below our estimate and 11% below Infront consensus. Kojamo also trimmed its 2024 outlook. We have lowered our 2024e FFOps by 5.4% and 2025–2026e by 4–8%. We reiterate our HOLD, and have reduced our target price to EUR10.5 (11).

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.

Positive comments on liquidity

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.

Enjoy the ride

We trim estimates somewhat. Reassuring outlook for new construction. Potential for >15% share price CAGR until 2026. BUY.