Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on VONOVIA SE. We currently have 1 research reports from 1 professional analysts.
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Benefiting from a German-specific resi model
21 Nov 16
Business Vonovia manages GAV of €26bn (including Conwert) in residential assets. Most of the group’s assets are multi-family residences that are distributed across Germany, with properties located in around 770 cities and municipalities. The group’s real estate portfolio covers 21,228,023m² with an average size of 62m². The apartments, which are rented out at €5.89/m² per month on average, include two or three rooms, a kitchen, and a bathroom. Vonovia’s vacancy rate stands at 2.8%. The group focuses on a total return strategy with targeted acquisitions and disposals. 2015 was a strong year of acquisitions for the group, with the integration of the portfolios of GAGFAH, Franconia, and SÜDEWO, increasing the number of apartments by more than 75%. The group also experienced a major acquisition failure with Deutsche Wohnen which preferred to focus on its own acquisition of LEG, a transaction that also failed. With the current consolidation of the German residential market, we expect Vonovia to give DW another try. Wait and see. Recommendation We initiate coverage of Vonovia with an Add recommendation and 19% upside, supported by the continuing strength in the German residential market and our expectations of additional rental growth. As a reminder, over the past few years, Vonovia has been a case of upward guidance revisions, on the back of acquisitions, operational performance, and refinancing efficiencies. 2016 is no different. Market dynamics, triggers, and threats Domestic economic drivers are still expected to fuel the German residential market. On the one hand, GDP expectations have decreased to 1.7% in FY17, on Brexit uncertainties, but are expected to pick up to 2.1% in FY18. On the other, demand for residential assets is expected to continue, supported by German immigration, while current German prices standing substantially below the West European average leave room for further growth. That said, the German residential market remains a much regulated one so that any major shift will take a toll on operations. Although the current regulations that set a cap on rents in major cities have had little impact on the market (see Worth Knowing), stricter measures might be an issue. The coming elections should be watched, especially since measures tend to favour tenants. The prospect of increasing interest rates also presents a threat for the sector both in terms of property valued and operations. That said, Vonovia is already well funded, with a LTV at 47% so that increasing yields will not have an immediate impact on the bottom line. On valuations, the current NIY at 4.5% stands in line with our universe of non-German Office and Retail, only the former is expected to experience excess demand and increasing prices, so that on average Vonovia will be better off.
Positive returns from all asset classes in Q316
28 Nov 16
Tetragon Financial Group (TFG) reported fair value earnings of US$49.7m for the third quarter of 2016, with positive contributions made by all asset classes. NAV total return was 1.3% for the quarter and 7.8% for the nine months to 30 September 2016. Having completed a US$100m tender offer in June 2016, TFG commenced a US$50m tender offer on 9 November 2016, which should be meaningfully accretive to NAV per share given the current wide share price discount to NAV. Consistent with previous years, the third interim dividend was held in line with the second interim, confirming TFG’s 5.9% yield.
N+1 Singer - Morning Song 30-11-2016
30 Nov 16
Sanderson has delivered full year results in line with expectations and the 19 October trading update after a strong finish to the year compensated for a slower start. A healthy level of pre-contracted recurring revenue (50%), incremental sales to existing customers and new customer wins at higher average order values helped deliver solid revenue growth in both the Digital Retail (+9%) and Enterprise (+12%) divisions. A decent order book and good sales momentum suggest that the company is on track to deliver on unchanged profit expectations for the current year. We continue to view the valuation (FY17 EV/EBITDA 8.6x) as undemanding given an attractive combination of accelerating growth potential, strong cash generation and growing dividends.
Small Cap Breakfast
28 Nov 16
Warpaint London—Schedule one update. Raising £2.5m at 97p. Expected mkt cap £62.6m vs revenues of £22.3m Walls & Futures REIT — Has raised £1m at £1 to acquire, refurbish or develop residential properties in the UK . Due to arrive on ISDX on 29 November Diversified Oil & Gas— Schedule One now out. $60m to be raised. Expected admission 6 December. Creo Medical Group —UK based medical device company focused on surgical endoscopy, a recent development in minimally invasive surgery. Admission due 7 December. Fundraising details TBA.
N+1 Singer - Grainger - Final results in line, further progress on PRS investment pipeline
01 Dec 16
Grainger has reported FY16 final results this morning with key NNNAV and recurring PBT metrics in line with our forecasts. Sales performance and rental income growth was strong in H2, as previewed in the positive FY trading update driving our 19% PBT upgrade in early October (11/10). The PRS investment pipeline continues to grow now standing at £389m secured and £347m in legals as Grainger pursues an £850m investment target by 2020. A 3.05p final dividend is in line with the revised policy to distribute 50% net rental income. The shares continue to trade on a significant, and unwarranted, 20%+ discount to NNNAV. We reiterate our BUY recommendation.
Interims reveal value creation
28 Nov 16
In June Draper Esprit was listed on the LSE. Today its maiden interim results reveal substantial progress since IPO. In addition to strengthening the executive team with the appointment of Ben Wilkinson as CFO, Draper Esprit has created shareholder value through new investment and realisations.