Real estate companies are now trading at a premium
An example of this is the real estate company NP3, which is now trading at a 50% premium to its net asset value. The company also has the highest average interest rate of all companies in the sector, paying around 4.2% compared to SBB, which has an average borrowing cost of 2.1%. Despite this, the research house Kepler chooses to repeat its buy recommendation for the real estate company NP3. However, the target price was lowered to SEK 223 from SEK 256.
In fact, Kepler is not alone. Handelsbanken has also raised several companies in the sector. Sometimes it feels like the upside down world as we see rising interest rates, several retail chains are choosing to terminate their contracts on premises as rising inflation has caused them to see a drop in sales making it difficult for retailers to make enough profit to get the profits needed to pay for the premises.
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