IPO of Offentliga Hus expected in 2020

Offentliga Hus earnings capacity up 13% q-o-q

DPS proposal of SEK 3.0 (0.0): dividend yield of 2.6%

Fastator’s focus 2020: Industrisamhället and Point Properties
Since December 2019, Fastator has continued its expansion phase in both its wholly-owned subsidiaries and partly-owned companies. Offentliga Hus property values have increased by 85% from SEK 3.9bn to SEK 7.2bn in 2019, derived from acquisitions and value revisions of ~SEK 230m. Moreover, Industrisamhället acquired 31 properties for SEK 600m with a rental value of SEK 65m in December 2019. In comparison, Industrisamhället’s property portfolio in Q3’19 was SEK 409m. Management guides that the focus for 2020 will be Industrisamhället and Point Properties.

Strong NAV performance and good outlook
Fastator reported a NAVPS of SEK 98.8 (+17% ABGSCe of SEK 84.6). The beat mainly relates to property value revisions of ~SEK 490m (470m realized + 20m unrealized) in Q4’19. The NAVPS increased 51% y-o-y on the back of a strong development in directly-owned properties, Nordic PM and Offentliga Hus. Directly-owned properties increased rental income from ~SEK 10m to 93m, Nordic PM sales grew by 28% y-o-y (from SEK 79m to SEK 101m) and Offentliga Hus rental income grew 39% y-o-y (from SEK 320m to SEK 446m) between 2018 and 2019. We make estimate revisions related to announced acquisitions. We see opportunities in Fastator’s portfolio for continued NAV growth on the back of acquisitions.

P/NAVPS valuation of 116% is above five-year average
Fastator’s share is up ~145% in one year. Meanwhile, the NAVPS has grown by ~50%. The current share price is SEK 115 and the last reported NAVPS was SEK 98.8, which implies a P/NAVPS premium of 16%. Since its listing in 2015, the share has traded at a NAVPS discount average of 29%, a max premium of 38% and max discount of 59%. The NAVPS has grown by a CAGR of 33% in the last four years and 54% in the last two years.

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