Revaluation of Nordic real estate equities – from premium to discount

Nordic Nordic property shares have trended downwards since all-time high in September last year. Former valuation premiums have disappeared and many companies are now trading at a discount. In particular, smaller property shares outside the main list have taken a large hit, according to the new report Pangea Nordic Listed Overview from Pangea Property Partners.

2017-05-23

Share via e-mail

Mikael Söderlundh. Image: Pangea Property Partners
Mikael Söderlundh.

“After a strong run lasting for many years, we have now seen a price correction in the Nordic listed property sector,” says Mikael Söderlundh, Partner and Head of Research at Pangea Property Partners.

Since the peak in September last year, property shares have dropped 5 percent in the Nordics, while the overall equity market has increased by 12 percent during the same period. In Sweden, the largest market in the Nordics, property shares have decreased by 6 percent.

“It’s surprising since the underlying property portfolios have continued to increase in value, but the weak stock market performance is probably driven by fear of higher financing costs and new tax regulations,” adds Söderlundh.

The combination of decreasing share prices and increasing net asset values has made the Nordic property shares trade close to par, according to the report. The former large valuation premiums are gone and many property shares, particularly in Norway and Finland, are traded at a significant discount.

“The discount in these markets is partly motivated by lower liquidity, and a smaller listed sector,” says André Lundberg, Director and Partner at Pangea Property Partners.

Looking at different segments, the smaller property shares on the secondary market have underperformed compared to the larger property shares on the main list. Since the beginning of September last year, the small growth companies have decreased by almost 14 percent.

“Many of these property shares are more volatile, and it is quite natural to see a reaction to the in some cases quite extreme price increases in recent years,” adds Lundberg.

Overall, the Nordic property market is still performing well, with solid transaction volumes, strong rental growth in many cities and increasing interest from international core investors.

“We don’t foresee any dramatic changes in the nearby future. The defensive characteristics of Nordic real estate are appreciated by investors in the current market,” says Bård Bjølgerud, CEO and Partner at Pangea Property Partners.

So far in 2017, the transaction volume in the Nordic property market is EUR 12.2bn, down from EUR 15.6bn same period last year. In Norway, the volume is EUR 3.1bn, which is more than 60 percent higher than last year.




Maria Olsson Äärlaht
maria@lokalnytt.se
fastighetssverige.se




EQT Closes Its First Real Estate Fund

Nordic EQT closes the EQT Real Estate I fund with commitments totaling EUR 420 million. Around 35 percent of the total commitments have already been invested in four assets.


Fredrik Jonsson New CEO of Niam

Nordic Johan Bergman has decided to take on the role of Chairman of Niam AB and Chairman in all of Niam’s funds. Fredrik Jonsson, the current CIO of Niam, will assume the role of CEO and take over responsibility for the company’s operations effective July 1, 2017.

New Chairman of the Board of NCSC

Nordic Fredrik Kolterjahn was appointed new chairman of Nordic Council of Shopping Centers at the annual general meeting in Stockholm on May 10th.

Forum Wins Best Nordic Shopping Center 2017

Nordic Forum Shopping Centre in Finland is the Best Nordic Shopping Center 2017 according to Nordic Council of Shopping Centers (NCSC). The winner was announced during the NCSC Nordic Award 2017 in Stockholm.

Sagax Purchases in Stockholm and Helsinki

Nordic Sagax has acquired a property in Västberga in southern Stockholm. At the same time the company acquires a property in Vantaa in the Helsinki metropolitan area. The total transaction sum amounts to EUR 22M.


New Merger Between Niras and Alectia

Nordic The merger between Alectia and Niras creates a Scandinavian consultancy that is stronger and offers all services under one roof.

NREP Forms EUR 1.1 Billion Nordic Logistics Platform

Nordic NREP and a group of local and international investors have formed a long-term Nordic logistics real estate fund with an initial property portfolio of more than 1 million sqm, the largest modern logistics platform in the Nordic region .

Pangea: Continued Record-level Transaction Pace on the Nordic Market

Nordic The number of transactions has increased during the early part of 2017 compared to the same period in 2016 and the transaction volumes are on par with the Nordic record year in 2016, according to a report from Pangea Property Partners.

Pradera Closes Large Deal with Ikea

Nordic Pradera has announced the first closing of the Pradera European Retail Parks SCSp, a Luxembourg fund. In a EUR 900M transaction agreed with Ikea Centres, the fund has signed a contract to acquire 25 prime retail parks next to Ikea stores in eight European countries.

Pangea: Nordic Real Estate Still Trending Positive

Nordic The Nordic property markets will continue to perform well, according to the new report Real Estate Outlook 2017 produced by Pangea Property Partners.