MaxFastigheter - Looking beyond COVID-19
COVID-19: No defaults and 1.1% rental discounts 30% rental income growth in 2020 ’21e P/CE at 12.8x vs. sector average at 18.4x IFPM up 24% y-o-y to SEK 71m (SEK 57m) Net operating income (NOI) amounted to SEK 39m (SEK 31m) in Q4 vs. ABGSCe of SEK 40m, while full-year NOI grew by 28% to SEK 144m (SEK 112m). An attractive lease structure of long lease maturities, triple net leases and hardly any turnover-based rents allowed MaxFastigheter to maintain a high NOI-margin of 77% in 2020 (77%), and to run a slim organisation (nine permanent employees).
Income from property management (IFPM) in Q4 amounted to SEK 19m (SEK 19m) vs. ABGSCe SEK 21m and SEK 71m (SEK 57m) for 2020. In line with MaxFastigheter’s new dividend policy communicated earlier this year, it will issue no dividends.
We believe this prevents share dilution and boosts the company’s investment outlook. Our ’21-22 estimate revisions derive from increased income from the Örebro acquisition and earlier accesses to Skiftinge, stage 2. Fast-growing tenants ensure high occupancy rates MaxFastigheter combines high yields (5.6%) with high occupancies (93%), due to its exposure in high-yielding segments and its stable tenant base.
The announced addition of PDL Group ( 2x growth p.a.) to Skiftinge, Eskilstuna further accents that profile. MaxFast’s property value (incl. ongoing projects) has tripled since its 2016 public listing, amounting to SEK 2,861m in ‘20, +24% y-o-y.
EPRA NAVPS was SEK 48, implying +11% growth y-o-y. The cash earnings contribution was 5.3% (5.5%) vs. ABGSCe ’20-’22 of 6% p.a., weighed down by paid tax of 21% (hist.
avg of ~14%), rental discounts of 1.1% and the penalty bond fee (reported in Q3) of 2.7% of rental income. ’21e P/NAV at 68% vs. sector average at 96% The share has traded strongly since the beginning of November (+38% since 1 Nov vs.
the Carnegie Real Estate Index (CREIX) at +10%). Within this period, the largest shareholder, Öresund, increased....