Stenhus Fastigheter: Strong operational performance in Q3 - ABG

* Strong NOI margin behind rec. PTP +1% vs ABGSCe * Cons to raise estimates (rec. PTP) by ~5% * Share to trade ahead of the real estate sector today Q3 NOI +3% vs ABGSCe Stenhus delivered a Q3 report with rental income of SEK 258m (+2% vs ABGSCe of SEK 252m), and NOI of SEK 213m (+3% ABGSCe of SEK 207m), the NOI margin was up 1.6pp y-o-y to 82.6%. Central administration costs were fairly in-line with our expectations while net financials were slightly higher than expected resulting in rec. PTP of SEK 114m (+1% vs ABGSCe at SEK 113m). Occupancy was up 0.4pp q-o-q to 92.8% (92.4% in Q2'25), and the WAULT amounts to 6.3 years (6.1 in Q2'25). Net letting was negative and amounted to SEK -2.3mm (SEK 2.6m in Q2). The earnings capacity including projects, divestment and acquisitions was up 10% q-o-q and amount to SEK 465m (+~10% vs ABGSCe). Property values +0.2%, avg interest rate down 10 bps q-o-q Unrealised and realised value changes amounted to SEK 21m (0.2% of property value) compared to our estimate of SEK 67m (0.5%) and the average property valuation yield was up 1bp q-o-q to 6.13% (6.12% in Q2). The average interest rate was down by 10 bps q-o-q to 3.9%, the average interest maturity stable at 1.3 years (1.2y in Q2) and the capital maturity was up to 2.5 years (2.3y in Q2). The net LTV (ABGSC definition) came up by 0.9pp q-o-q to 53.8%. Share to trade outperform the sector today Stenhus delivered solid Q3 numbers with an NOI margin improvement of 1.6pp y-o-y, net letting was negative at SEK -2.3m (+2.6m in Q2), and the occupancy rate was up q-o-q to 92.8%. The earnings capacity including projects, divestment and acquisitions was up 10% q-o-q and amount to SEK 465m (+10% vs ABGSCe). Stenhus has announced the divestment of two development properties during the quarter, and one in Q4, which contributes to improving occupancy for the portfolio, and improved cash earnings as these properties were largely vacant. They have also announced an acquisition of SEK 295m at an estimated NIY of ~7%, which should add ~2% to top-line estimates and ~3% on rec. PTP. We expect cons. to raise estimates (rec. PTP) by ~1% on the back of this report isolated, and ~4% on recent transactions, and the share to trade ahead of the sector today.