The analysis of the prospects of Prodea Investments, the largest investment company (AEEAP) in real estate in Greece, was developed today by Alpha Finance with a report published by the Analysis Department of the company.
Prodea is listed on the ATHEX. and has a portfolio of 373 commercial properties with high visibility and commerciality with 318 of them located in Greece, 24 in Cyprus, 27 in Italy, 2 in Bulgaria and 2 in Romania. The gross fair value of investments (GAV) and the fair value of managed real estate (AuM) amounted to Euro 2.3 billion and Euro 2.5 billion respectively, as at 31 December 2021. Optimal management and distribution of real estate includes current investments with 47% in offices, 19% in shops, 18% in banks, 8% in hotels and about 3% in warehouses ( logistics), while maintaining a high occupancy rate at 95%, with a weighted average duration of leases (WAULT) at 13.9 years (or 8.9 years including lease options).
The Management of Prodea assessing current developments and trends in the real estate market and the creation of long-term value, continues its investment programconsidering investments of Euro 600 million. ., with more than 80% of them being in “green” projects,mainly in the areas of “green” offices, logistics and hotels (Hospitality), while also evaluating its selective position in the field of residential real estate development, in which Prodea is expected to continue to be the main exponent of investments in “green” projects in the domestic market in the coming yearswith the gross fair value (GAV) reaching Euro 505 million at the end of 2022 from Euro 333 million last year, while maintaining long-term rental contracts, the majority of which are linked to inflation.
In the hotel sector Besides, the activity in the field of luxury resorts in Greece (Athens, Thessaloniki, Patras) and Cyprus, is expected to continue, as the aim is to maximize the return on investment, highlighting their high added value. In this context, Prodea has divested from high-maturity or non-core assets of the company, approximately Euro 200 million, with corresponding investments in development projects, which are expected to lead to an increase in rental income and improving profitability in the coming years.
The positive outlook for the domestic real estate market, with prices and rental income recovering in recent years, conditions for a satisfactory increase in the internal book value (NAV) of AEEAPs, which also benefit from the favorable tax framework.
In the light of this positive outlook, the company, based on the comparable to similar companies weighted in the individual areas of activity P / NAV index (price to internal book value), is expected to be traded at 1.2x in 2024while based on P / FFO index (price to income from operating activities) at 19.2xwhile based on the EV / EBITDA multiplier at 23.8x. By discounting these multipliers at the end of 2023 (with a capital cost of 8.2%), Prodea’s intrinsic value (NAV) is between Euro 6.02 and Euro 7.02 per share,while the dividend return for shareholders based on the company’s NAV in December 2021 (Euro 5.47), is expected to increase in the coming years, starting in 2022 from 5.1% and reaching 6.8% in 2025.
Finally, investment prospects with bioclimatic and energy characteristics will be the main driver of growth, creating added value in the coming years.
Source: Capital
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