Q4 NOI margin on the softer side
>80% floating debt drives estimate revisions
2024e P/CEPS of ~20.5x (sector avg at ~17.5x)
Strong like-for-like growth and higher occupancy
Fastpartner (FPAR) delivered a Q4 report with a solid top line, up 10.5% y-o-y and +2% vs. ABGSCe. Given that FPAR has ~75% of its portfolio in the Stockholm region and that we view Stockholm as the most cyclical market, it is impressive to generate like-for-like rental income growth of 9.7% and occupancy at 92.9%, up 0.5pp y-o-y. However, the NOI margin was on the softer side, at 65.3% (down 2.5pp y-o-y, compared to the average of sector peers so far or in this reporting season at +1.1pp). Like-for-like costs increased by 7.9% y-o-y in 2023, while Q4 stands out as the only quarter with a negative NOI margin trend y-o-y. FPAR has now taken down property values by ~11.5% since the peak in Q3'22 and the valuation yield has come up to 5.2% (4.30% in Q3'22), meaning that we believe future write-downs will be limited (<1%).