Studentbostäder i Norden - Higher sales and strong NOI margin - ABG

NOI +14% vs ABGSCeProperty value changes of SEK 110m (+1.9%)Net LTV of 62.9% (ABGSCe at 64.0%)First take on Q1 resultsStudentbostäder delivered a Q1 report with total income of SEK 73m (+6% vs ABGSCe at SEK 70m) with a higher -than-expected NOI margin of 60.2% (ABGSCe at 56%), leading to a NOI of SEK 44m (ABGSCe at SEK 39). Central administration costs and net financial expenses (excluding FX) were broadly in line with our estimates, but the NOI beat bring the Q1 IFPM to SEK 14m (ABGSCe at SEK 6m). The number of apartments in the project portfolio of 2,961 units were relatively flat q-o-q. Property value changes was higher than expected, driving EPRA NRV +4% vs ABGSCe. Conclusion: strong topline (+6%) and NOI margin (+4.2 pp), we expect consensus NOI estimates for 2022 to come up by ~3-5% and the share should outperform the real estate sector today. EPRA NRV growth of 19% y-o-yQ1 property value changes amounted to SEK 109m (1.9% of property value) compared to our estimate of SEK 40m (0.7%). EPRA NRV grew 19% y-o-y and 5.6% q-o-q. The average valuation yield amounted to 4.03%, down 3 bp q-o-q from 4.06% in Q4’21. Approximately SEK 70m (~64% of the value changes) stem from projects. The net LTV amounted to 62.9%, up 10 bps q-o-q, while 110 bps lower than our estimate of 64.0%. Post Q1, SBS has announced a direct share issue of SEK 50m at SEK 10 per share, equivalent to a discount to Q1 EPRA NRV of ~8.5% High beta in sector headwindsStudentbostäder is a relatively small and fast-growing student housing niche player. SBS has a higher share of projects than our sector average, and higher gearing. In an environment of skyrocketing development costs due to inflation, and increased interest rate expectations, SBS should be viewed as a high-beta case. Our fair value range (from the 25th of March) amounts to SEK 10.0-11.5.Läs mer på ABG Sundal Collier