European listed companies sharply narrow gap to NAV

Two recent sets of figures released by EPRA, the European Public Real Estate Association, highlight notable developments among Europe’s listed property companies. Firstly, how they are scheduling their long-term debt obligations, and secondly, the continued narrowing of the gap between stated NAV and quoted share prices across the sector.

With the due date trend showing yet further lowering, Europe’s listed property firms have an average of 15.87% outstanding debt maturing over the next 12 months, the EPRA figures show. Loan-to-value data for constituent firms in the EPRA/FTSE European Index for June showed that maturing short-term debt fell slightly from 16.03% in May. The majority, 52.56%, reaches maturity in 1-5 years. The weighted average LTV of the European Index is 41.44%, also down fractionally from 42.18%.

The figures also show that, among the index’s constituents, 15 firms have made capital raisings so far this year in Europe. Listed real estate companies in Europe raised €4.77bn in debt in 2013 to date, more than in all of 2011 and about half of all that raised in 2012.

In a separate study, EPRA's NAV calculations for May showed improvements generally across the 12 markets it measures in Europe. Average discount to NAV in Europe is 3.6%, down slightly from April. UK listed property shares moved to a premium for the first time in recent years to join France, Finland, Belgium and Switzerland. All others remained at average discount to NAV, with Italy lowest at 54.9%, followed by Austria at 45.1% discount. But Greece, in third place, sprang higher to an average discount of under 38% from 43.8% in April, and Nordic listed firms' shares were all improved. Norway proved to be a star performer, bounding ahead to an 18% discount after fully 30% in April.