11 Apr, 2018 (Updated 11 Apr, 2018)
Moving beyond traditional real estate
Investors House has commissioned Nordea Markets to produce a research report with the aim of providing investors with quality research on the company.
A diverse real estate company in the making
Investors House is transforming itself and aims to expand its current real estate business to include a broader service offering as well as launch a real estate fund in cooperation with the newly acquired Dividend House. We see good earnings upside potential with limited risk as the new business has good scalability and requires little upfront capital. The company has a solid record of expanding its real estate portfolio through favourable deals, which have resulted in portfolio revaluation of more than 3% in the past three years.
Strong basis for future expansion
Investors House has a strong balance sheet with an equity ratio of 61% and a net loan-to-value of 42%, which bodes well for future expansion without needing to issue additional equity. The macro environment in Finland is also supportive as strong GDP growth and rising inflation are favourable for rental development and the low interest rate environment is supportive for property transactions and property prices.
Based on this combination of valuation methods, we derive a fair value range of EUR 6.9-9.9. Investors House currently trades at a 10% discount to its latest EPRA NAV, which is slightly lower than the Nordic sector average of 18%.