Better than most
In a challenging macroeconomic environment Eastnine delivered one of the strongest sets of Q4 results so far in the real estate reporting season. Occupancy increased by 2pp q-o-q to >96%, while we see Stockholm property names with vacancies around ~10%. Thanks to true triple-net lease agreements and operating leverage, the NOI margin increased by 7pp y-o-y to >91%, while we see/forecast NOI margin contraction in almost all of Swedish real estate companies. On top of this, Eastnine is the only company with positive Q4 property value changes in our coverage, so far. Eastnine is obviously not unaffected by external factors such as higher interest rates (interest maturity of ~1.8 years, ~30% floating terms and another ~17% of interest maturities in 2023e), and recent interest rate hikes lead to slightly adjusted CEPS estimates. With that said, we are impressed by the operational performance and expect 2023e CEPS to grow by double-digits (~13%).
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