'Rare pure-play' - Berenberg starts NSI at 'buy' on growth step-up

NSI NV

10/08/2022 07:54

** Berenberg initiates Dutch office property company NSI
 NSTEc.AS , "a rare pure-play" in Europe, with "buy" saying its
growth step-up is now visible 
    ** The broker says the overall office market has absorbed
pandemic-driven working-from-home trends, enabling NSI to target
faster growth
    ** "With NSI having optimised and centralised its letting
portfolio and kept a rock-solid financial profile, we believe it
is now time to revisit the company, which is changing
gears while also maintaining its ESG leadership," the broker
says
    ** It says the group, which has successfully reduced its
vacancy rate since 2018, should realise the upside of its
current portfolio thanks to its exposure to most coveted
locations in the Netherlands and its sound and diversified
tenant structure
    ** Berenberg adds NSI now focuses on its 430-million-euro
($439 million) development pipeline, already roughly 47%
pre-let, while its 5.5% planned yield on costs "looks
achievable"
    ** It expects the group's revenue to grow by around 3.5% per
year until 2026, supported by indexation and lease extensions,
leading to rental income of 111 million euros in 2026, up 42%
from 2021
    ** Among three analysts covering the stock, two rate it
"strong buy" or "buy" and one "hold" - Refinitiv data
    
($1 = 0.9797 euros)

 (Reporting by Olivier Cherfan)
 ((olivier.cherfan@thomsonreuters.com))