Morgan Stanley starts 'high risk, high reward' Xior at 'overweight'

Xior Student Housing NV

05/06/2024 08:55

** Morgan Stanley initiates "high risk, high reward" Xior
Student Housing with "overweight" and PT of 37 euros, seeing an
improving backdrop for risk assets on expected imminent ECB rate
cuts and a stabilisation in property values
    ** "We believe Xior is a candidate to benefit from a 'risk
on' environment given its elevated financial leverage and
development exposure," MS says
    ** The broker describes rental growth outlook for student
housing as "fundamentally compelling", citing supportive
investment market evidence for Xior's asset yields
    ** It expects double-digit returns with 5% net portfolio
yields and strong rental growth of 4-6% in mid-term and 50% LTV
    ** It warns, however, any dip in capital value or interest
rate hike could force the real estate company to refinance
    ** Shares in Xior Student Housing rise 6%
    ** Out of 11 analysts, six rate Xior "strong buy"/"buy",
​three "hold" and two​ "strong sell"/"sell"

 (Reporting by Dimitri Rhodes and Leo Marchandon)
 ((dimitri.rhodes@thomsonreuters.com ;
leo.marchandon@thomsonreuters.com))