Fastpartner - Fended off COVID-19 and returned to ATHs
2020 IFPM +12% despite 50% office exposure Adj. EPRA NAVPS of SEK 83.8, CEPS SEK 4.25 Ongoing investments in projects of SEK 1,122m (+30%) Q4’20 NOI (SEK 317m) in line with record Q4’19 (SEK 316m) Fastpartner ended the year with 9.6% NOI growth (to SEK 1,285m, FY’19 at 1,173m) and 11.7% recurring PTP growth (to SEK 952m from SEK 852m) despite 2019 having been a record year for the company. The NOI growth was due to rental increases from acquired properties (~57%), renovations (~35%) and renegotiations (~8%). For Q4, rental income was SEK 462m (454m) vs.
ABGSCe 460m and property-related costs of SEK -145m (-138m) vs. ABGSCe at -129m. Quarterly recurring PTP of SEK 249m was in line with ABGSCe at SEK 246m, but 9% above Q4’19 due to SEK 18m in profit from associated companies.
Ongoing investments in projects amounted to SEK 1,122m, +30% vs. SEK 866m in Q4’19. DPS of SEK 2.0 (1.9) was proposed vs.
ABGSCe of SEK 2.1. EPRA NAVPS adj. +9% in Q4, +15% in 2020 Fastpartner’s value revisions amounted to 3.43% of the portfolio value in Q4 (ABGSCe at -0.25%).
The large beat from unrealized properties (SEK 1,024m) underscores the attractiveness of well-connected locations in Stockholm. Entrepreneur-led and agile, Fastpartner has quickly transformed its portfolio to include ~50% offices (from 35% two yrs ago), as it sees the office segment as having the best prospects for rental growth. Q4 reported EPRA NAVPS was SEK 91.1 (82.6) and adj.
EPRA NAVPS (subtract. for D- and pref. shares) was SEK 83.8 (74.5) vs.
ABGSCe of SEK 76.4. For the last 5 and 10 years, Fastpartner has had CEPS CAGRs of 10% and 14%, respectively. We argue that the company will reach its growth target of 10% recurring PTP per common share per year, and we expect a CEPS CAGR of ~10% in ‘20e-22e.
19.6x P/CEPS vs. sector average of 18.5x With a change of analyst, we have thoroughly reviewed our estimates. The share is down ~9% LYTD compared to the sector (Carnegie Real Estate Index) at ~-10%.