Xior Upgrade to BUY after CiK and new cornerstone investor

This morning, Xior announced an Contribution in Kind (CiK) agreement to acquire two PBSA assets in Lisbon and Kraków. Together for a total of 670 units/1,053 beds and an average gross investment yield of 8.41%. These acquisitions are realised entirely by CiK against the issue of new shares at an issue price of EUR 29.02. The total contribution value is approx. 80 MEUR, which strengthens Xior's equity and reduces the LTV by 1,1%. We like this CiK deal as it combines growth with LTV reduction. The relative high yield compensates the discount to NTA of the newly issued shares. The placement of these shares with a new cornerstone investor adds to the positive impact. Xior has been troubled with overhang for the recent past, but now adds a strong cornerstone investor. Katoen Natie is a leading logistics player in Belgium with many other activities and financial positions. We upgrade our rating to Buy as this deal removes a significant amount of uncertainty. We maintain our EUR 38.0 target price.