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Trianon

Trianon

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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.

Financials

SEKm 2019 2020e 2021e
Rental Income 446 547 599
Rental growth (%) 30,2 21,5 9,8
Net operating income 286 355 392
NOI margin (%) 64 64,8 65,5
CEPS Adj 4,48 5,37 6,18
CEPS Adj. growth (%) 13,4 20 15,1
DPS 0 1,9 2,35
EPRA NAVPS 82,43 89,07 102,72
EPS 8,04 5,11 4,93
EPS Adj 8,42 5,88 5,7
P/CEPS Adj. (x) 23,1 26,4 23
P/E Adj. (x) 12,3 24,2 24,9
P/EPRANAV (x) 1,26 1,59 1,38
Implicit yield (%) 3,6 3,2 3,3
div.yield (%) 0 1,3 1,7
LTV (%) 54,6 55,3 54,7
N/A N/A N/A
SEKm 2019 2020e 2021e
Rental income 446 547 599
Other income 7 3 6
Operating costs -168 -196 -212
Net operating income 286 355 392
NOI margin (%) 63 64,4 64,9
Value change realized 0 0 0
Value change unrealized 292 104 0
Administration costs -36 -42 -45
All other income & costs 0 0 0
EBIT 542 416 348
Net financial items -66 -82 -88
Value change derivatives -82 -70 0
Pretax profit 388 257 253
Deferred profit tax -81 -43 -46
Current tax 0 0 0
Net profit 307 214 208
Minority interest 0 0 0
Net profit to shareholders 293 186 180
Cash earnings 163 196 225
Tax rate (%) -20,8 -16,8 -18
Net investments 1761 1064 1103
Acquisitions N/A N/A N/A
Other investments 0 0 0
Divestments N/A N/A N/A
EPS 8,04 5,11 4,93
CEPS 4,48 5,37 6,18
CEPS adj. 4,48 5,37 6,18
Dividend per share Adj 0 1,9 2,35
Payout ratio of CEPS (%) 0 35,4 38
Rental growth (%) 30,2 21,5 9,8
NOI growth (%) 34,3 24,2 10,7
CEPS growth (%) 13,4 20 15,1
CEPS adj. growth (%) 13,4 20 15,1
Properties 7958 9126 10230
Deferred tax asset 48 0 0
Receivables 36 36 36
Cash and liquid assets 178 178 178
Other assets 201 246 269
Current liabilities 134 0 0
Total assets 8420 9586 10712
Shareholders equity 2917 3129 3517
Minority 0 0 0
Deferred tax 467 767 917
Interest bearing debt 4902 5689 6278
Short-term debt 0 0 0
Derivatives 134 0 0
Total liabilities and equity 8420 9586 10712
Net IB debt 4349 5051 5597
Rental area m2 (000) 341 341 341
Rent per m2 1328 1614 1772
Equity ratio (%) 34,6 32,6 32,8
Loan to value (%) 54,6 55,3 54,7
Net loan to value (%) 63,8 64,3 63,1
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 79,99 85,81 96,44
EPRA NAV per share 82,43 89,07 102,72
Shares outstanding adj. 36 36 36
Share price 82,03 142 142
Market cap. (m) 2991 5178 5178
P/E 12,9 27,8 28,8
Net IB debt / share 119 139 153
P/CEPS 23,1 26,4 23
P/CEPS adj. 23,1 26,4 23
EV/EBIT 15 24,6 31
Implicit yield (%) 3,6 3,2 3,3
Yield on BV (%) 3,6 3,9 3,8
Dividend yield (%) 0 1,3 1,7
P/NAV 0 0 0
P/EPRA NAV 1,26 1,59 1,38
P/BVPS 1,29 1,65 1,47
EV/NOI 28,45 28,85 27,46
N/A N/A N/A

Equity research

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Main shareholders - Trianon

Main shareholders Share capital % Voting shares % Verified
Briban Invest AB 28.2 % 33.5 % 30 Jun 2020
Olof Andersson 27.4 % 32.8 % 16 Jul 2020
Länsförsäkringar Fonder 12.5 % 9.2 % 31 Aug 2020
Martin Gren (Grenspecialisten) 10.0 % 7.3 % 30 Jun 2020
Mats Cederholm 3.2 % 3.7 % 30 Jun 2020
Familjen Eklund 2.5 % 1.8 % 30 Jun 2020
Futur Pension 1.6 % 1.2 % 30 Jun 2020
SEB Fonder 1.3 % 0.9 % 30 Jun 2020
Idoffs Fastighets AB 1.1 % 0.8 % 30 Jun 2020
Areim Investment 4-5 AB 1.1 % 0.8 % 30 Jun 2020
Source: Holdings by Modular Finance AB

Insider list - Trianon

Name Quantity Code Date
Ann Eriksson + 55 BUY 27 Aug 2020
Olof Andersson + 4 445 BUY 16 Jul 2020
Olof Andersson + 6 871 BUY 15 Jul 2020
Anna Heide + 8 BUY 9 Jul 2020
Mari-Louise Hedbys - 5 000 SELL 2 Jul 2020
Anna Beatrice Heide - 5 000 SELL 2 Jul 2020
Axel Barchan + 15 000 BUY 1 Jul 2020
Mari-Louise Hedbys - 15 000 SELL 1 Jul 2020
Mats Cederholm - 4 200 SELL 30 Jun 2020
Mari-Louise Hedbys + 40 000 BUY 30 Jun 2020

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