Globalworth RE Investments (LON:GWI) made strategic and financial progress in FY15. The portfolio grew strongly through acquisitions and development progress, with construction of the flagship Globalworth Tower completed by year-end and the property delivered in Q116. NOI and cash flow both increased significantly and we forecast further strong growth as acquisitions fully contribute and remaining developments complete. EPRA NAV per share grew 12.2% during the year despite share issuance and the pro forma year-end LTV was 44.3% (43.5% reported for Q116). Meanwhile the Romanian economy and the Bucharest commercial real estate market remain supportive. Against this backdrop and our forecasts for growing cash flow, the failure of the NAV discount to narrow seems unwarranted.
Maturing portfolio creating cash flow and NAV growth
Four let properties were added in FY15, and together with capex and revaluation gains the portfolio value reached €931m (FY14: €599m). Portfolio progress is the key to delivering the growing cash flows that we forecast for FY16-18. Including the newly completed Globalworth Tower, there are now 11 standing let assets with an average occupancy of 82.2% and a contracted rent roll of €43.7m. Further potential comes from occupancy improvement and development completions. Globalworth Campus is the main ongoing development with an NOI potential of c €15m. The maturing portfolio and increasing free cash flow support our assumption that GWI will soon commence dividend distributions.
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