Rental income came in at SEK 169m (162m) compared to our forecast of SEK 161m. Net operating income (NOI) was SEK 126m, relative to our estimate of SEK 112m. Income from property management (IFPM) amounted to SEK 64m (55m) compared to our forecast of SEK 54m. The higher IFPM per share growth is due to a slightly lower hybrid capital expense than we had expected. Net leasing summed up to SEK 16m (3.5m) and SEK 40m (13m) trailing 12 months. Total acquisition volume for 2021 amounted to SEK 668m, far exceeding 2020 & 2019 (SEK 150m & SEK 156m).
EPRA NRVPS +37% y-o-y to SEK 187 (137)
Unrealised and realised value changes amounted to SEK 457m (66m) or +4.2%, we expected SEK 145m or 1.3%. EPRA NRVPS increased 37% y-o-y to SEK 187 (137), 6% higher than our forecast of SEK 177. The value change was attributable to improved cash flows, renegotiations and lowered yield. Net LTV fell to 48.5% from 50.4% in Q3’21. Two projects obtained building permit in the quarter, and an additional one so far in Q1. The isolated Q4 numbers would imply estimate revisions of +5-7%
Potential for operational excellence
We view the occupancy rate of 89% as a potential and an increased focus on asset management could, in our opinion, lead to sector-high like-for-like rental income growth. We also argue that the average yield requirement of 5.7% is too high relative to transactions seen in the direct market and estimate yield compression of 45 bps until ‘23e. The share is currently trading at 22.5x and 0.97x ‘23e P/IFPM and P/EPRA NRV, and ~35% below the average for peers last 12 months P/EPRA NRV.
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