Trianon: Respected property management in the south - ABG
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We increase our indexation assumptions for ’23e and ’24e
52bps increase to the average interest rate in ’22e-’24e
~1.15x P/EPRA NRV and ~30x P/IFPM in ’23e
NOI margin rebound in ’22e
Due to increased market CPI expectations, we raise our indexation assumptions by 100bps to 2.5% for ’23e and by 50bps to 2.0% for ’24e. There are no other major changes to our topline estimates since our post-Q4 update. For Q1’22e, we estimate that rental income will grow by ~5% q-o-q (~11% y-o-y) to SEK 168m, driven by the full effect from the SEK 630m acquisition in December. For 2022, we forecast a rental income growth of +12% y-o-y. The NOI margin in ’21 was depressed by the Signatur takeover, but we believe that TRIAN will improve this margin in 2022, leading to a NOI growth of 16% y-o-y.
We forecast an EPRA NRV CAGR of 10% in ’21-’24e
We forecast value revisions of ~0.8% in Q1 and 3.1-2.8% in ’22-‘24. From the value changes, around 5% stem from renovations and ~25% from projects. In combination with the cash earnings from property management, we estimate an EPRA NRV CAGR of 10% in ’21-’24e. As for our full real estate coverage, we have assumed 100bps in gradual interest rate increases until ’24e. Note that ~52% of outstanding debt should be impacted in ’22-’24 (~46% in ’22) due to the maturities of its interest rates and swaps. As a result, TRIAN’s average interest rate is revised upwards by 52bps. Due to the increased macroeconomic uncertainty, we have also decreased our assumptions for yield compression in the ’22-’24 forecast period.
Growth expectations and valuation above peers
Our estimated EPRA NRV CAGR in ’21-’24e (11%) is above the average Infront Data consensus for Balder and Wallenstam (~10%). TRIAN is trading at a ~15% premium to ’23e EPRA NRV and ~30x to ’23e P/IFPM, some ~20% (P/EPRA NRV) and ~40% (P/IFPM) above the average of Balder and Wallenstam. Our unchanged fair value range of SEK 195-225 corresponds to next 12 months P/EPRA NRV of 1.22-1.41x and P/IFPM of 30-35x.
Läs mer på ABG Sundal Collier
52bps increase to the average interest rate in ’22e-’24e
~1.15x P/EPRA NRV and ~30x P/IFPM in ’23e
NOI margin rebound in ’22e
Due to increased market CPI expectations, we raise our indexation assumptions by 100bps to 2.5% for ’23e and by 50bps to 2.0% for ’24e. There are no other major changes to our topline estimates since our post-Q4 update. For Q1’22e, we estimate that rental income will grow by ~5% q-o-q (~11% y-o-y) to SEK 168m, driven by the full effect from the SEK 630m acquisition in December. For 2022, we forecast a rental income growth of +12% y-o-y. The NOI margin in ’21 was depressed by the Signatur takeover, but we believe that TRIAN will improve this margin in 2022, leading to a NOI growth of 16% y-o-y.
We forecast an EPRA NRV CAGR of 10% in ’21-’24e
We forecast value revisions of ~0.8% in Q1 and 3.1-2.8% in ’22-‘24. From the value changes, around 5% stem from renovations and ~25% from projects. In combination with the cash earnings from property management, we estimate an EPRA NRV CAGR of 10% in ’21-’24e. As for our full real estate coverage, we have assumed 100bps in gradual interest rate increases until ’24e. Note that ~52% of outstanding debt should be impacted in ’22-’24 (~46% in ’22) due to the maturities of its interest rates and swaps. As a result, TRIAN’s average interest rate is revised upwards by 52bps. Due to the increased macroeconomic uncertainty, we have also decreased our assumptions for yield compression in the ’22-’24 forecast period.
Growth expectations and valuation above peers
Our estimated EPRA NRV CAGR in ’21-’24e (11%) is above the average Infront Data consensus for Balder and Wallenstam (~10%). TRIAN is trading at a ~15% premium to ’23e EPRA NRV and ~30x to ’23e P/IFPM, some ~20% (P/EPRA NRV) and ~40% (P/IFPM) above the average of Balder and Wallenstam. Our unchanged fair value range of SEK 195-225 corresponds to next 12 months P/EPRA NRV of 1.22-1.41x and P/IFPM of 30-35x.
Läs mer på ABG Sundal Collier