Report
Jakub Caithaml

WOOD Flash – Graphisoft Park: 3Q18 — strong top-line growth, driven by delivery of new space

Graphisoft Park reported its 3Q18 results yesterday (6 November), recording strong top line growth. The rental income was up 31% yoy, driven by the delivery of the new premises in the southern area of the park, where the company has completed c.14k sqm of new office space since the start of the year (c.10k sqm of this has been leased out already, while most of the remaining space is covered already by preliminary rental contracts, according to the report). The rental income exceeded our estimates by c.6% in the quarter, mainly as we expected the handover of the space to the tenants to take longer. Management’s latest forecasts imply FFO of c.EUR 10.3m in 2018E and EUR 11.7m in 2019E, exceeding our FFO forecasts by 5% and 10%, respectively. We believe that Graphisoft Park offers an appealing FFO yield, and we like the company’s unique business model of a “miniature Silicon Valley”, catering for the needs of local and global IT companies. That said, as the stock held its ground better than many other European real estate stocks during the recent market correction (the EPRA ex-UK Index is down c.7% since the end of August, while Graphisoft Park’s shares lost only 2% over the same period), we believe the room for a rerating may be limited in the near-term.
Underlying
Graphisoft Park SE

Graphisoft Park SE Ingatlanfejleszto Europai Rt is a Hungary-based company engaged in the real estate operations. The Company operates as a holding and provides management, financial and administrative services to its subsidiaries. As of December 31, 2011, the Company operated two subsidiaries, Grpahisoft Park Kft, engaged in the real estate development; and Graphisoft Park Services Kft, responsible for property operation tasks. The total area of the Company's properties was nearly 18 hectares. As of December 31, 2011, the Company's two subsidiaries, Graphisoft Park Universitas Kft and GP3 Kft merged into Graphisoft Park Kft. As of December 31, 2011, the Company's parent entity was Graphisoft SE.

Provider
Wood and Company
Wood and Company

WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.

A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.

Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.

We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.

Analysts
Jakub Caithaml

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