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Trianon

Trianon

Rental apartments and community service properties

Trianon is a real estate company that owns, manages, acquires and develops properties in Malmö, Skåne. The property portfolio encompass rental apartments (62%), retail (22%), office (5%), social infrastructure (10%). Rental apartments and social infrastructure properties account for 72%. Trianon divides it geographic exposure into City (30%), Limhamn/Slottsstaden (21%), Lindägen/Hermodsdal/Oxie (41%) and Rosengård (8%).

Trianon has ~900 apartments in its current project portfolio. The company guides that construction on most of these apartments will be started in 2020 and 2021. We see potential in development profits and an increase in CEPS from its current project portfolio. We argue that Trianon’s book value/sqm is low compared to rental apartment trading peers and residential prices in Malmö, which is why we argue that the company’s properties may be subject to a potential value uplift.

Real estate companies are subject to macro risks, supply of premises risk, supply of capital risk, debt availability risk, forex risk, regulatory risk, rental income risk, property cost risk, property value risk and ownership risk. We argue that specific risks related to Trianon are ownership risk, geographical risk and dependency on certain individuals in the business.

SEKm 2020 2021e 2022e
Rental Income 553 621 687
Rental growth (%) 22,7 12,5 10,8
Net operating income 369 412 466
NOI margin (%) 66,6 66,4 67,9
CEPS Adj 5,17 6,31 7,59
CEPS Adj. growth (%) 15,6 21,9 20,3
DPS 1,8 2,25 2,7
EPRA NAVPS 100,9 124,03 139,66
EPS 11,31 16,18 5,87
EPS Adj 12,11 17,12 6,81
P/CEPS Adj. (x) 26,5 33,9 28,2
P/E Adj. (x) 11,3 12,5 31,4
P/EPRANAV (x) 1,36 1,73 1,53
Implicit yield (%) 3,6 2,8 3,2
div.yield (%) 1,3 1,1 1,3
LTV (%) 55,7 54,6 52,1
SEKm 2020 2021e 2022e
Rental income 553 621 687
Other income 3 4 6
Operating costs -187 -213 -226
Net operating income 369 412 466
NOI margin (%) 66,3 65,9 67,3
Value change realized 0 0 0
Value change unrealized 406 487 0
Administration costs -53 -52 -56
All other income & costs 0 0 0
EBIT 722 848 410
Net financial items -86 -82 -85
Value change derivatives -62 39 0
Pretax profit 568 798 319
Deferred profit tax -114 -157 -64
Current tax 0 0 0
Net profit 454 641 255
Minority interest 0 0 0
Net profit to shareholders 424 606 220
Cash earnings 194 236 284
Tax rate (%) -20,1 -19,6 -20,2
Net investments 1098 902 641
Acquisitions N/A N/A N/A
Other investments 0 0 0
Divestments N/A N/A N/A
EPS 11,31 16,18 5,87
CEPS 5,17 6,31 7,59
CEPS adj. 5,17 6,31 7,59
Dividend per share Adj 1,8 2,25 2,7
Payout ratio of CEPS (%) 34,8 35,7 35,6
Rental growth (%) 22,7 12,5 10,8
NOI growth (%) 29,1 11,8 13,1
CEPS growth (%) 15,6 21,9 20,3
CEPS adj. growth (%) 15,6 21,9 20,3
Properties 9462 10852 11493
Deferred tax asset 57 0 0
Receivables 213 213 213
Cash and liquid assets 280 280 280
Other assets 503 539 573
Current liabilities 167 0 0
Total assets 10303 11671 12347
Shareholders equity 3635 4315 4782
Minority 0 0 0
Deferred tax 587 737 837
Interest bearing debt 5915 6619 6728
Short-term debt 0 0 0
Derivatives 167 0 0
Total liabilities and equity 10303 11671 12347
Net IB debt 5266 5926 5991
Rental area m2 (000) 402 402 402
Rent per m2 1381 1553 1721
Equity ratio (%) 35,3 37 38,7
Loan to value (%) 55,7 54,6 52,1
Net loan to value (%) 65,5 63,6 61
ICR real estate 4 4 5
Interest rate on debt (%) 2 1 1
Occupancy rate (%) 94,5 94,5 94,5
NAV per share 0 0 0
BVPS 97,03 115,17 127,63
EPRA NAV per share 100,9 124,03 139,66
Shares outstanding adj. 37 37 37
Share price 114,83 214 214
Market cap. (m) 4302 8018 8018
P/E 12,1 13,2 36,4
Net IB debt / share 141 158 160
P/CEPS 26,5 33,9 28,2
P/CEPS adj. 26,5 33,9 28,2
EV/EBIT 14,4 16,4 34,1
Implicit yield (%) 3,6 2,8 3,2
Yield on BV (%) 3,9 3,8 4,1
Dividend yield (%) 1,3 1,1 1,3
P/NAV 0 0 0
P/EPRA NAV 1,36 1,73 1,53
P/BVPS 1,41 1,86 1,68
EV/NOI 28,22 33,83 30,05

Equity research

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Media

Trianon - Company presentation with Deputy CEO & CFO Mari-Louise Hedbys & IR Nina Gilljam
Trianon - Company presentation with CFO/Deputy CEO Mari-Louise Hedbys & IR Manager Nina Gilljam

Main shareholders - Trianon

Main shareholders Share capital % Voting shares % Verified
Olof Andersson 27.5 % 32.8 % 28 Sep 2021
Briban Invest AB 27.4 % 32.8 % 30 Sep 2021
Martin Gren (Grenspecialisten) 9.9 % 7.3 % 30 Sep 2021
Länsförsäkringar Fonder 9.7 % 7.1 % 30 Sep 2021
SEB Fonder 6.0 % 4.4 % 30 Sep 2021
Mats Cederholm 3.1 % 3.6 % 31 Mar 2021
Familjen Eklund 2.4 % 1.7 % 30 Sep 2021
ODIN Fonder 2.0 % 1.4 % 30 Sep 2021
Idoffs Fastighets AB 1.2 % 0.9 % 30 Sep 2021
Futur Pension 1.2 % 0.9 % 30 Sep 2021
Source: Holdings by Modular Finance AB

Insider list - Trianon

Name Quantity Code Date
Richard Hultin + 1 330 BUY 25 Aug 2021
Boris Lennerhov - 1 900 SELL 12 Aug 2021
Mari-Louise Hedbys - 1 700 SELL 7 Jun 2021
Mari-Louise Hedbys - 1 396 SELL 7 Jun 2021
Mari-Louise Hedbys - 686 SELL 20 May 2021
Mari-Louise Hedbys - 1 024 SELL 20 May 2021
Mari-Louise Hedbys - 5 544 SELL 20 May 2021
Viktoria Bergman + 2 400 BUY 6 May 2021
Olof Andersson + 75 000 BUY 30 Mar 2021
Jan Barchan + 75 000 BUY 30 Mar 2021

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