XIOR: Asset valuations stretched & life cycle cost to be monitored

We have revised upwards our estimates for the future expansion pipeline to € 120m p.a., but have on the other hand lowered our rental LFL assumptions to a small positive. Also we believe that the asset valuations are too stretched compared to peers and the non-yielding capex budget to sustain the existing portfolio might be underestimated and hence have increased this to 10% of NRI, and this on top of the recurrent technical costs they already make. Our blended valuation model leads us to increase the TP from € 40 to € 41 for the next 12 months period. However, we argue that the current price is too stretched with a -16% downside risk, and we downgrade the stock from Hold to Reduce.