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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 2019 2020e 2021e
Rental Income 446 525 547
Rental growth (%) 29,6 17,6 4,1
Net operating income 286 339 357
NOI margin (%) 64 64,5 65,2
CEPS Adj 5,12 5,89 6,24
CEPS Adj. growth (%) 29,9 15 5,9
DPS 0 1,9 2,35
EPRA NAVPS 82,43 87,99 101,05
EPS 8,88 4,96 5,12
EPS Adj 8,88 4,96 5,12
P/CEPS Adj. (x) 20,2 16,2 15,3
P/E Adj. (x) 11,7 19,2 18,6
P/EPRANAV (x) 1,26 1,08 0,94
Implicit yield (%) 3,6 3,8 3,7
div.yield (%) 0 2 2,5
LTV (%) 54,6 52,4 52,5
SEKm 2019 2020e 2021e
Rental income 446 525 547
Other income 0 0 0
Operating costs -161 -186 -190
Net operating income 286 339 357
NOI margin (%) 64 64,5 65,2
Value change realized 0 0 0
Value change unrealized 292 54 0
Administration costs -36 -39 -39
All other income & costs 0 0 0
EBIT 542 354 318
Net financial items -66 -79 -84
Value change derivatives -82 -49 0
Pretax profit 388 219 227
Deferred profit tax -81 -38 -41
Current tax 0 0 0
Net profit 307 181 187
Minority interest 0 0 0
Net profit to shareholders 307 181 187
Cash earnings 177 215 227
Tax rate (%) -20,8 -17,5 -18
Net investments 1761 469 1081
Acquisitions N/A N/A N/A
Other investments 0 0 0
Divestments N/A N/A N/A
EPS 8,88 4,96 5,12
CEPS 5,12 5,89 6,24
CEPS adj. 5,12 5,89 6,24
Dividend per share Adj 0 1,9 2,35
Payout ratio of CEPS (%) 0 32,3 37,7
Rental growth (%) 29,6 17,6 4,1
NOI growth (%) 34,3 18,6 5,3
CEPS growth (%) 29,9 15 5,9
CEPS adj. growth (%) 29,9 15 5,9
Properties 7958 8481 9561
Deferred tax asset 48 0 0
Receivables 36 36 36
Cash and liquid assets 178 178 178
Other assets 201 236 246
Current liabilities 134 0 0
Total assets 8420 8930 10020
Shareholders equity 2917 3098 3446
Minority 0 0 0
Deferred tax 467 767 917
Interest bearing debt 4902 5065 5657
Short-term debt 0 0 0
Derivatives 134 0 0
Total liabilities and equity 8420 8930 10020
Net IB debt 4349 4446 5019
Rental area m2 (000) 341 341 341
Rent per m2 1308 1539 1602
Equity ratio (%) 34,6 34,7 34,4
Loan to value (%) 54,6 52,4 52,5
Net loan to value (%) 63,8 61,8 61
ICR real estate 4 4 4
Interest rate on debt (%) 2 2 2
Occupancy rate (%) 94 94 94
NAV per share 0 0 0
BVPS 84,35 84,95 94,51
EPRA NAV per share 82,43 87,99 101,05
Shares outstanding adj. 35 36 36
Share price 82,03 95,4 95,4
Market cap. (m) 2837 3479 3479
P/E 11,7 19,2 18,6
Net IB debt / share 126 122 138
P/CEPS 20,2 16,2 15,3
P/CEPS adj. 20,2 16,2 15,3
EV/EBIT 14,6 22,4 26,7
Implicit yield (%) 3,6 3,8 3,7
Yield on BV (%) 3,6 4 3,7
Dividend yield (%) 0 2 2,5
P/NAV N/A N/A N/A
P/EPRA NAV 1,26 1,08 0,94
P/BVPS 1,23 1,12 1,01
EV/NOI 27,77 23,4 23,84

Equity research

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Main shareholders - Trianon

Main shareholders Share capital % Voting shares % Verified
Jan Barchan 28.3 % 33.5 % 31 Mar 2020
Olof Andersson 28.2 % 33.5 % 27 Nov 2019
Länsförsäkringar Fonder 11.9 % 8.7 % 30 Apr 2020
Martin Gren (Grenspecialisten) 10.0 % 7.3 % 31 Mar 2020
Mats Cederholm 3.2 % 3.7 % 31 Mar 2020
Familjen Eklund 2.5 % 1.8 % 31 Mar 2020
Futur Pension 1.6 % 1.2 % 31 Mar 2020
SEB Fonder 1.3 % 0.9 % 31 Mar 2020
Idoffs Fastighets AB 1.1 % 0.8 % 31 Mar 2020
Areim Investment 4-5 AB 1.1 % 0.8 % 31 Mar 2020
Source: Holdings by Modular Finance AB

Insider list - Trianon

Name Quantity Code Date
Jonas Karlsryd + 117 BUY 3 Apr 2020
Ann Eriksson + 50 BUY 17 Mar 2020
Mats Cederholm - 100 000 SELL 27 Nov 2019
Jan Barchan - 300 000 SELL 27 Nov 2019
Mats Cederholm - 100 000 SELL 27 Nov 2019
Olof Andersson - 300 000 SELL 27 Nov 2019
Boris Lennerhov - 500 SELL 20 Sep 2019
Boris Lennerhov - 1 360 SELL 19 Sep 2019
Ann Eriksson + 1 400 BUY 21 Mar 2019
Mari-Louise Hedbys + 14 500 BUY 5 Mar 2019

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