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Xior Student Housing

Earnings Release Feb 6, 2019

4028_er_2019-02-06_11d0eb0b-6e08-406c-bcc7-cc12b476c8ba.pdf

Earnings Release

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6 February 2019 – Embargo until 17:40 (CET)

Regulated information

Annual Communiqué – Announcement of 2018 annual results

2018: EPS of EUR 1.46 exceeds target after creation of 69% new shares – DPS EUR 1.25

2019: EPS EUR 1.60 and DPS 1.30 expected

Antwerp, Belgium – 6 February 2019 – Annual results 01/01/2018 – 31/12/2018

EPRA earnings of EUR 1.46 per share1 , 2% increase since 31 December 2017 notwithstanding 69% increase of number of shares outstanding

Proposed dividend of EUR 1.25 per share, which represents a 4.17% increase with an 85.6% payout ratio

EPRA earnings of KEUR 16,179 in 2018 – a 66% increase compared with 2017

Net rental result grows to KEUR 30,081, which represents a 65% increase compared with KEUR 18,194 in 2017

Net result (IFRS) of KEUR 16,105 or EUR 1.45 per share in 2018, which represents a 32% increase compared with KEUR 10,954 in 2017

EPRA NAV per share2 of EUR 31.45 compared with EUR 28.44 on 31 December 2017 IFRS NAV per share3 (IFRS) of EUR 29.78 compared with EUR 27.47 on 31 December 2017

Debt ratio of 49.32% compared with 53.62% as at 31 December 2017. After successful completion of the EUR 134 million capital increase in June 2018, the debt ratio fell to 39.26% as at 30 June 2018. The debt ratio rose again to 49.32% as at 31 December 2018 as a result of acquisitions in the third and fourth quarter.

Occupancy rate rises to 98.9% compared with 97.9% in 2017

The property portfolio rose to EUR 815 million with 5,505 lettable student units, which is a 67% increase compared with 31 December 2017. If all acquisitions and redevelopments in the committed pipeline are completed, the portfolio will increase to approximately EUR 950 million with more than 7,700 lettable student units

IPO 2015 31/12/2016 31/12/2017 31/12/2018 Full committed
pipeline
Number of
student units
2,035 2,531 3,678 (excl.
projects)
5,505 (excl.
projects)
7,713
Fair value
(incl. non
students)
Approximately
EUR 200
million
Approximately
EUR 265 million
Approximately
EUR 493 million
Approximately
EUR 818 million
> EUR 950
million
Buildings
(incl. non
students)
48 54 71 (incl.
projects)
87 (incl. projects) 88 (incl.
projects)
Number of cities 4 (BE) + 4 (NL) 5 (BE) + 5 (NL) 5 (BE) + 12 (NL) 5 (BE) + 16 (NL) 5 (BE) + 16 (NL)

Projections for 2019: EPRA earnings of EUR 1.60 per share and dividend of EUR 1.30 per share

1 Figures per share are calculated on the basis of the weighted average number of shares, unless stated otherwise.

2 Based on the number of outstanding shares.

3 Based on the number of outstanding shares.

6 February 2019 – Embargo until 17:40 (CET)

6 February 2019 – Embargo until 17:40 (CET)

Regulated information

I. KEY FIGURES

Consolidated P&L statement in KEUR 31/12/2018 31/12/2017
Net rental result 30,081 18,194
Property result 30,718 18,533
Operating result before result on the portfolio 23,323 13,245
Financial result (excl. changes in the fair value of financial assets and
liabilities)
-4,179 -2,692
4
EPRA earnings
16,179 9,772
Result on the portfolio (IAS 40) 5,722 1,722
Revaluation of financial instruments (ineffective interest rate hedges) -5,123 942
Deferred taxes -673 -1,674
Net result (IFRS) 16,105 10,954
Number of lettable student units 5,505 3,678
Gross yields5 2018 2017
Belgium 5.10% 5.15%
The Netherlands 5.72% 6.19%
Entire portfolio 5.52% 5.68%
Consolidated balance sheet in KEUR 31/12/2018 31/12/2017
Equity 410,019 223,291
Fair value of the real estate property6 814,908 488,762
Debt ratio (Law on Regulated Real Estate Companies)7 49.32% 53.62%
Key figures per share in EUR 31/12/2018 31/12/2017
Number of shares 13,768,815 8,128,249
Weighted average number of shares8 11,109,319 6,851,483
EPRA earnings9 per share 1.46 1.43
Result on the portfolio (IAS 40) 0.45 0.25

4 Alternative performance measures (APMs) are measures used by Xior Student Housing NV to measure and monitor its operational performance. The European Securities and Markets Authority (ESMA) has issued guidelines for the use and explanation of alternative performance measures, which came into effect on 3 July 2016. Chapter 10.8 of the Annual Financial Report 2017 includes the concepts Xior considers as APMs. The APMs are marked with and accompanied by a definition, objective and reconciliation (see XII and XIII of this Annual Communiqué), as required by the ESMA guideline.

5 Calculated as estimated annual rent divided by the fair value and excluding development projects. These are valuation yields.

Valuation yields differ from acquisition yields (as announced), as they are based on the fair value rather than the acquisition value. 6 The fair value of the investment property is the investment value as determined by an independent valuation expert less the transaction fees (see BE-REIT Association press release dated 10 November 2016). The fair value corresponds to the carrying amount under IFRS.

7 Calculated in accordance with the Royal Decree of 13 July 2014 pursuant to the Act of 12 May 2014 on Regulated Real Estate Companies.

8 Based on the dividend entitlement of the shares

9 Calculated on the basis of the weighted average number of shares.

6 February 2019 – Embargo until 17:40 (CET)

31/12/2018 31/12/2017

Regulated information

Variations in the fair value of the hedging instruments -0.49 0.14
Net result per share (IFRS)10 1.45 1.60
Closing price of the share 38.00 38.99
Net asset value per share (IFRS) (before dividend) 29.78 27.47
Dividend payout ratio (versus EPRA earnings)11 85.6% 84%
Proposed dividend per share12 1.25 1.20
EPRA metrics Definition in KEUR EUR per
share
in KEUR EUR per
share
EPRA earnings * Underlying result derived from the strategic
operating activities. This indicates the extent to
which dividend payments are supported by the
earnings.
16,179 1.46 9,772 1.43
EPRA NAV *13 Net asset value (NAV) adjusted to take into
account the fair value of the real estate property
and excluding certain elements that are not part of
a
financial
model
of
long-term
property
investments.
433,011 31.4514 231,203 28.44
EPRA NNNAV *15 EPRA NAV adjusted to take into account the fair
value of (i) the assets and liabilities, (ii) the debts
and (iii) the deferred tax.
410,019 29.78 223,291 27.47
% %
EPRA Net Initial Yield
(NIY)
Annualised gross rental income based on the
current rent on the closing date excluding the
property charges divided by the portfolio market
value plus the estimated transaction rights and
costs in case of hypothetical disposal of
investment property.
4.6% 4.7%16
EPRA Adjusted Net Initial
Yield (Adjusted NIY)
This measure integrates an adjustment of the
EPRA NIY for the end of rent-free periods or other
non-expired rental incentives.
4.6% 4.7%
EPRA rental vacancy Estimated rental value of vacant units divided by
the estimated rental value of the total portfolio.
1.16% 2%
EPRA cost ratio (incl.
vacancy costs) *
EPRA costs (including vacancy costs) divided by the
gross rental income.
25.2% 29.8%
EPRA cost ratio (excl.
vacancy costs) *
EPRA costs (excluding vacancy costs) divided by
the gross rental income.
24.4% 29%

10 Based on the number of shares.

11 The dividend payout ratio is calculated based on the consolidated result. The actual dividend distribution is based on the standalone result of Xior Student Housing NV.

12 Subject to approval by the Annual General Meeting.

13 Based on the number of outstanding shares.

14 The deferred taxes were adjusted in the EPRA NAV as at 31/12/2018. This modified calculation is more in line with the calculation of the EPRA NAV under the EPRA frame of reference. The amended calculation has a positive impact of EUR 1.21 on the EPRA NAV per share as at 31/12/2018. There was an impact of EUR 0.11 per share on the recalculated EPRA NAV per share as at 31/12/2017. 15 Based on the number of outstanding shares.

16 The calculation of the NIY per 31 December 2017 contained an error. This has been corrected and the correct NIY has been mentioned for 2017.

6 February 2019 – Embargo until 17:40 (CET)

II. CONSOLIDATED FINANCIAL RESULTS

The financial information for the period ending on 31 December 2018 was drawn up in accordance with the International Financial Reporting Standards (IFRS).

The figures presented are consolidated figures; pursuant to applicable legislation, participations in other companies and subsidiaries are consolidated.

1. Net rental result

In 2018, Xior achieved a net rental result of KEUR 30,081: KEUR 6,355 in Q1, KEUR 6,619 in Q2, KEUR 7,834 in Q3 and KEUR 9,273 in Q4. This net rental result will continue to increase in 2019, as certain buildings were finalised or acquired in the course of 2018 and therefore did not contribute to the net rental income for the full year. Additionally, certain buildings that were under construction or renovation already yielded rental income, in the form of rental or revenue guarantees as of Q4 2018 (but, therefore, also only contributed to the result for part of the year).

This mainly relates to the following properties:

  • Ariënsplein, Enschede: this property is being refurbished and its rental income will increase further in 2019.
  • Naritaweg, Amsterdam: this property has generated rental income since the end of April 2018.
  • Rotsoord, Utrecht: this property has generated rental income since the end of July 2018.
  • Tiensestraat 274, Leuven: this property has generated rental income since mid-September 2018.
  • Oudergemlaan 269-275, Etterbeek: this building was completed in October 2018 and has generated rental income since then.
  • Tesselschadestraat, Leeuwarden: this property was acquired on 28 September 2018 and has generated rental income since October 2018.
  • Annadal site, Maastricht: this site has generated rental income since mid-December 2018.
  • Duivendaal, Wageningen: this property has generated rental income since mid-December 2018.

The average occupancy rate for the property portfolio was 98.9% over 2018.

2. EPRA earnings

EPRA earnings (excluding the portfolio result, excluding the impact of deferred taxes with regard to IAS 40 adjustments and excluding the impact of the variation in fair value of the financial assets and liabilities) amount to KEUR 16,179 compared with KEUR 9,772 in 2017.

EPRA earnings per share17 were EUR 1.46.

17 The calculation of the EPRA earnings per share is based on the weighted average number of shares as at 31 December 2018, which is 11,109,319.

6 February 2019 – Embargo until 17:40 (CET)

On this basis, the Board of Directors intends to propose to the Annual General Meeting a gross dividend of EUR 1.25, or EUR 0.875 net per share for 201818 (taking into account the dividend entitlement of the shares, as well as the detached coupons), represented by coupon number 7, worth EUR 0.555 (detached from the Xior share previously19), coupon number 8 worth EUR 0.603 (detached from the Xior share previously20) and coupon number 9 worth EUR 0.092.

3. Net result

The net result stands at KEUR 16,105 as at 31 December 2018. The net result per share stands at EUR 1.45.21

The net result includes the impact of variations in the fair value of investment property, other portfolio results, deferred taxes relating to the effects of IAS 40, variations in the fair value of financial assets and liabilities and the share in the result of joint ventures. The EPRA earnings are the net result corrected for the elements set out above.

4. Fair value of the property portfolio

As at 31 December 2018, the portfolio consisted of 5,505 lettable student units. The total property portfolio is valued at KEUR 814,908 as at 31 December 2018, representing a 67% increase compared with 31 December 2017. This increase is mainly due to the contribution in kind of a building under construction in Enschede, the further development and completion of the student buildings located on Oosterhamrikkade in Groningen and Phoenixstraat in Delft, the acquisition of the Woodskot project in Brussels, the acquisition of the Bonnefanten project in Maastricht, the acquisition of Naritaweg in Amsterdam, the acquisition of Rotsoord in Utrecht, the acquisition of a student building in Leeuwarden, the acquisition of the Annadal site in Maastricht and the acquisition of a student building in Wageningen.

If all committed acquisitions and projects are realized, the growth will continue, up to approximately EUR 950 million, with more than 7,700 lettable student units.

18 Taking account of a withholding tax of 30%.

19 Based on the weighted average number of shares and therefore taking into account the dividend entitlement of the shares issued in connection with the capital increase of June 2018. It is noted that a coupon detachment took place in connection with the capital increase of June 2018. All Xior shares are currently listed with coupon numbers 9 et seq. attached See also the press releases published in the context of the capital increase. More information is also available at https://www.xior.be/en/investor/investorrelations/coupons.

20 Based on the weighted average number of shares and therefore taking account of dividend entitlements for the shares issued in connection with the capital increase of December 2018. It is noted that a coupon detachment took place in connection with the capital increase of December 2018. All Xior shares are currently listed with coupon numbers 9 et seq attached. See also the press releases published in the context of the capital increase. More information is also available at https://www.xior.be/en/investor/investor-relations/coupons.

21 Calculated on the basis of the weighted average number of shares.

6 February 2019 – Embargo until 17:40 (CET)

5. Debt ratio and increase in equity

As at 31 December 2018, the debt ratio was 49.32% compared with 53.62% as at 31 December 2017. On the one hand, the debt ratio has fallen as a result of the (indirect) contribution in kind of a property in Enschede for the amount of KEUR 18,117 on 28 March 2018, the successful capital increase of EUR 134 million in June 2018 and the contribution in kind of the Annadal site in Maastricht for the amount of EUR 30 million. On the other hand, it has also increased because of the continued roll-out of the growth strategy.

6. Other balance sheet items

Current assets include, primarily:

  • Receivables still to be collected (KEUR 1,218): this primarily consists of rents to be received;
  • Other receivables: these are mainly receivables from Alma Student NV, the joint venture company responsible for the development of the Zaventem project (KEUR 16,144, an advance payment on an acquisition (KEUR 15,102), receivables from Aloxe NV (KEUR 1,723 remunerated at market interest rate) and receivables related to rental guarantees yet to be settled with the sellers for a number of 2017 and 2018 acquisitions.

The long-term financial debt stands at KEUR 401,177 compared with KEUR 251,744 as at 31 December 2017. This increase is a result of the roll-out of Xior's growth strategy in 2018, which was partially financed with loans.

Other long-term liabilities (KEUR 6,317) include the negative market value of the IRS contracts as at the balance sheet date.

The short-term financial debts stand at KEUR 1,637 and are related to a cash credit facility used at the end of December 2018.

Other short-term debts include, primarily:

  • Outstanding supplier debts (KEUR 6,486): these are primarily certain supplier positions relating to projects completed in 2018.
  • Other (KEUR 2,230): these are primarily provisions for Dutch taxes for the permanent structure and subsidiaries (KEUR 2,041), payable VAT (KEUR 14) and social debts (KEUR 169).
  • Guarantees received on rented properties (KEUR 4,043).
  • Price to be paid for the purchase of land and the exercise of a purchase option (put and call option) for 50% of the remaining Alma Student shares (KEUR 9,127).

III. FINANCING

As at 31 December 2018, the Company had entered into financing agreements with ING Belgium NV, Belfius Bank NV, KBC Bank NV, BNP Paribas Fortis NV, Argenta Spaarbank NV, vdk bank, Bank

6 February 2019 – Embargo until 17:40 (CET)

Nagelmackers and Caisse d'Epargne. ING Belgium NV has provided a total of EUR 100 million, Belfius Bank NV EUR 95 million, KBC Bank NV EUR 55 million, BNP Paribas Fortis NV EUR 75 million, Argenta Spaarbank NV EUR 50 million, vdk bank EUR 10 million, Bank Nagelmackers EUR 10 million and Caisse d'Epargne EUR 25 million. As at 31 December 2018, the Company had drawn down EUR 401.5 million in financing.

The Company aims to stagger loan maturities with an average maturity of 4.30 years as at 31 December 2018.

Furthermore, the Company has IRS contracts totalling EUR 315 million as at 31 December 2018. As at 31 December 2018, the drawn down financing (EUR 401.5 million) was 90% hedged through Interest Rate Swap agreements or fixed interest rates.

The average financing cost in 2018 was 1.96% (2017: 1.76%).

In the course of January 2019, a new financing agreement was entered into with Belfius Bank in an amount of EUR 25 million.

IV. KEY COMPLETED PROJECTS 2018

  • Acquisition of a student property in Wageningen – 179 units

Xior completed the acquisition of a student complex in Wageningen consisting of 179 non selfcontained units on 14 December 2018. The party selling the Duivendaal property to Xior will carry out some modifications to bring the building fully up to standard. The seller is providing Xior with a return guarantee until delivery. The acquisition value is in line with the fair value as determined by the company's independent valuation expert.

In addition to the Duivendaal property, an agreement has also been reached regarding the acquisition of the nearby "Meteogebouw", which is to be converted into 22 self-contained units. After completion by the seller, the purchase is scheduled for mid-2019, with the seller providing a one-year rental guarantee for this property after acquisition.

Finally, the site may also offer the potential for further expansion in the future.

This transaction has an investment value of approximately EUR 13 million (for both buildings, irrespective of any additional development potential).

  • Acquisition of the Annadal site in Maastricht – partly through contribution in kind – 723 units

On 12 December 2018, Xior made the contribution in kind for the acquisition of the Annadal site in Maastricht, the Netherlands, which includes 723 non self-contained student units.

6 February 2019 – Embargo until 17:40 (CET)

This acquisition was carried out by acquiring 100% of the shares in the relevant real estate company. The agreed value of the underlying property is approximately EUR 62.6 million. The acquisition was carried out partly through a contribution in kind of the shares of the real estate company concerned (payment through the issue of new Xior shares). The new shares were issued as a result of a capital increase using the issued capital that was decided upon by Xior's Board of Directors. The transaction resulted in an equity increase of EUR 30 million, of which EUR 14.4 million was assigned as Capital and the balance (EUR 15.23 million) was assigned as Unavailable Issue Premiums after deduction of the costs of the capital increase (EUR 370,000).

  • Exercise of call option on the remaining 50% of the shares of Promiris Student SA/NV

On 5 October 2018, as anticipated during initial purchase in December 2017, Xior acquired the remaining 50% of the shares in Promiris Student SA/NV – the owner of a redeveloped student complex consisting of 118 units. As such, this company is now a 100% subsidiary of Xior. The building was recently completed and is generating rental income. The Company was granted a one-year rental guarantee for 50% of the rental income.

  • Acquisition of a student building in Leeuwarden – 82 units

On 28 September 2018, Xior completed the acquisition of 82 self-contained units located on Tesselschadestraat in Leeuwarden. This recently converted office building is known as "The Block" and is fully equipped with features including a digital key system, high-speed Internet connection and digital television signal, camera system, etc. The students have access to a dedicated indoor storage space and shared facilities such as a bike shed and laundry room. The building also contains a commercial space on a long-term lease. This property was acquired through the purchase of 100% of the shares in the real estate company involved. The price of the shares in the real estate company is based on an agreed property value of approximately EUR 10.8 million22. The transferor provided a rental guarantee until the end of 2018.

  • Wholly-owned subsidiary in the Netherlands

Xior acquired a new wholly-owned subsidiary in the Netherlands in September 2018. Xior will use this company for one or more intended redevelopment projects in Dutch student cities.

  • Joint venture agreement for the Brussels Region (Zaventem) Project – 339 units

On 29 November 2017, Xior signed an agreement on the redevelopment of an office complex to be converted on the outskirts of Brussels (Zaventem) close to various educational institutions (Université Catholique de Louvain, Ecam, Vinci, Ephec), Saint Luc University Hospital and various research institutions (such as the Duve Institute). A joint venture was set up with a private developer prior to the redevelopment. On 27 August 2018, after receiving the necessary permits, Xior entered into this joint venture – Alma Student NV – with a 50% share. The announced total investment value (after

22 This is in line with the estimates of the independent valuation expert.

6 February 2019 – Embargo until 17:40 (CET)

conversion) will be approximately EUR 38 million. According to the final concept and plans, the office building is intended to be converted into a student housing complex consisting of 240 student units and 99 furnished apartment-hotels, based on a design by architectural firm Jaspers-Eyers. The ground floor will house retail facilities, which will be redeveloped together with the underground parking spaces by a third-party investor.

This student property is expected to be operational for the academic year starting in September 2019. Xior was also granted a two-year rental guarantee on 50% of the offer for operating the student flat hotel and also received a partial one-year rental guarantee for the student units.

  • Acquisition of a student building in Utrecht – 206 units

On 26 July 2018, Xior successfully completed the acquisition of the site in Rotsoord, Utrecht, where a project will be implemented consisting of two buildings containing a total of 206 self-contained units and a restored listed building for commercial activities. This acquisition involves the completion of one of the two purchase agreements concluded on 12 July 2018 following the Company's exercise of a purchase option. The transaction was completed by the acquisition of the real estate company's shares in the project. The total investment value of the underlying property is approximately EUR 40 million23. The seller provides a one-year rental guarantee for this property after the acquisition.

  • Acquisition of Bonnefanten College redevelopment project in Maastricht – 257 units

The Company signed a Purchase Agreement for the acquisition of Bonnefanten College, for which the previous owner already obtained an environmental permit. This former monastery is a registered national monument and will be redeveloped into a student complex with 257 self-contained student rooms and shared facilities. The property is located at Tongerseweg 135, near Xior's other student accommodation monument in Maastricht, the Carré building. The announced total investment value (after conversion) will be approximately EUR 34 million24 . Xior expects to start using the building in September 2019.

  • Acquisition of a student building situated at Tiensestraat 274 / Windmolenveldstraat 2-4 Leuven – 17 units

The Company acquired a building located at Tiensestraat 274 / Windmolenveldstraat 2-4, 3000 Leuven on 9 May 2018. This building is situated in a prime location in the student city of Leuven. The building has 17 student rooms and four apartments. The purchase price was KEUR 1,86925 .

23 This is in line with the estimates of the independent valuation expert.

24 This is in line with the estimates of the independent valuation expert.

25 This is in line with the estimates of the independent valuation expert.

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  • Acquisition of a student complex for development in Brussels (Woodskot project) – 91 units

On 22 May 2018, the Company acquired a redevelopment project in Brussels26 called Woodskot. After the proposed redevelopment, this transaction will have 91 units. The announced total investment value (after conversion) will be approximately EUR 10 million27 .

  • Acquisition of a site in Amsterdam – 247 units

On 25 April 2018, Xior successfully completed the acquisition of a site with three towers on Naritaweg/Barajasweg in the Dutch capital of Amsterdam. The buildings were completed in 2018 and have a total of 247 units ranging from 23 m² to 52 m² with 94 parking spaces. The site is located near public transport and is undergoing a comprehensive upgrade through various redevelopment projects, making sure to provide sufficient green spaces as well. Two thirds of the buildings, which provide a range of options for students and young starters, was already rented out at the time of the acquisition. The seller also provides Xior a 12-month rental guarantee.

Xior acquired the properties (built on a plot with a long-term lease) by buying 100% of the shares in the relevant real estate companies. The price of the shares in the companies is based on the investment value of the property held by the relevant company, which is derived from the rental values. The total investment value of the underlying property amounts to approx. EUR 47 million28 , with an expected initial yield of approximately 5.6%.

  • Acquisition of a student complex in Enschede via contribution in kind – 271 units

On 28 March 2018, Xior acquired a student property (under construction) in Enschede29. The land and the structures that had already been renovated were acquired via a(n indirect) contribution in kind to Xior's capital. The value of the contribution was based on the value of the land and the already existing structures, and resulted in a capital increase of KEUR 18,117 (including issue premium). The acquisition had a total investment value of approximately EUR 28 million30. The issue price of the new shares amounted to EUR 35 per share (rounded). The commissioning of the building in Enschede was planned for 2018. The developer is completing the property in stages and has provided Xior with a one-year rental guarantee for the non-rented sections (self-contained units), a three-year guarantee for the second education facility and a contractual penalty clause that compensates Xior for the delay incurred.

26 See Press Release dated 13 March 2018.

27 This is in line with the estimates of the independent valuation expert.

28 This is in line with the estimates of the independent valuation expert.

29 See Press Releases dated 12 March 2018 and 28 March 2018.

30 This is in line with the estimates of the independent valuation expert.

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- Development of the management organisation

In the course of 2018, Xior further expanded its internal organisation, particularly in terms of the inhouse management and administration of the properties in its portfolio (especially in the Netherlands). Xior now has at its disposal, within the group, an efficient internal organisation to handle the technical and commercial management of various previously externally managed properties. In the past, properties were often managed externally for a certain period after they were transferred, in part due to the rental guarantees provided by sellers. Xior's in-house management has allowed it to reduce the number of external management partners to one over the course of 2018. The development of this efficient platform gives Xior greater control over the management of its properties. Furthermore, it allows Xior to take a more uniform, quality approach towards all its properties and to further develop its growth strategy. This strengthening of the internal organisation kept pace with the external growth that was achieved and enables Xior to link this growth to the preservation of the Xior student accommodation standards.

V. IMPORTANT EVENTS AFTER CLOSING OF THE FINANCIAL YEAR

  • Acquisition of project land in Ghent

On 17 January 2019, Xior acquired project land located at a prime location in the centre of Ghent, at Bagattenstraat. Xior aims to develop a quality student property there.

VI. COMMITTED ACQUISITIONS IN THE PIPELINE

  • Acquisition of a site on Karspeldreef, Amsterdam

On 12 July 2018, Xior signed a purchase agreement exercising its purchase option with regard to a site located in Amsterdam. This site, which is provided under a long-term lease, is located on Karspeldreef, near Amsterdam Bijlmer Arena Station. Xior plans to redevelop a total of 320 selfcontained student units on this site. This office building reconversion project consists of 6 connected buildings, each with its own facilities (such as an elevator). The building will also have 170 parking spaces. The transfer of this property is planned for Q1 2019. The announced expected investment value will be around EUR 55 million (subject to the further adjustment of the number of units and the expected rental values during the project's development). The sellers will provide a yield guarantee for this project from 1 September 2018, and will also provide a one-year rental guarantee.

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VII. GROWTH PROSPECTS31

In 2019 as in the previous years, Xior intends to continue to vigorously pursue its growth strategy by adding quality student properties to its property portfolio and by completing the projects in its development pipeline. Xior is convinced that several attractive growth opportunities remain available in Belgium and the Netherlands, particularly by expanding into the Walloon region in Belgium and by (further) expanding in certain Dutch student cities where Xior is not yet (sufficiently) present.

For the 2019 financial year, the Company is anticipating EPRA earnings per share of EUR 1.60 per share, implying an increase of 9.6% compared to 2018, while also setting a dividend target of EUR 1.30 gross per share (an increase of 4% compared to 2018). This means that Xior once again anticipates a nice growth in its results per share year-on-year, notwithstanding the fact that the number of shares outstanding increased by 69% over the course of 2018, as a result of the successful capital increase in June 2018 and contributions in kind in March and December. This capital increase is one of the reasons why Xior managed to achieve a strong project development pipeline, which will start to contribute fully to the return and the intended further growth of the portfolio, EPRA earnings and dividend in the course of 2019 and 2020.

Xior expects the debt ratio to be around 55% as a result of the further implementation of the growth strategy.

In 2019, Xior is expecting an occupancy rate substantially similar to the current rate.

VIII. AUDIT ACTIVITIES

The statutory auditor has confirmed that their audit work, which has been completed in all material aspects, revealed that no material corrections need to be made to the accounting information included in the communiqué.

IX. ANNUAL FINANCIAL REPORT – ANNUAL GENERAL MEETING

The annual report will be made available to shareholders on the website www.xior.be as of 16 April 2019 (after stock market closing) and can also be obtained from the company's headquarters on request (Mechelsesteenweg 34, P.O. Box 108, 2018 Antwerp or via [email protected]).

The company's annual general meeting will be held on 16 May 2019.

31 These forecasts are based on the current situation and do not account for unforeseen circumstances (such as a deterioration of the economic and financial climate and/or the materialization of risks to which the Company and its activities are exposed). Forecasts regarding dividends are subject to approval by the Annual General Meeting.

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Regulated information

X. FINANCIAL CALENDAR

Publication of the Annual Financial Report 16 April 2019 (after stock market closing) Announcement of the results as at 31 March 2019 29 April 2019 (after stock market closing) Annual General Meeting 16 May 2019 Announcement of results as at 30 June 2019 5 August 2019 (after stock market closing) Announcement of the results as at 30 September 2019 24 October 2019 (after stock market closing)

For more information, please contact:

Xior Student Housing NV Mechelsesteenweg 34, bus 108 2018 Antwerp www.xior.be

Christian Teunissen, CEO Frederik Snauwaert, CFO [email protected] T +32 3 257 04 89

Xior Investor Relations Sandra Aznar Head of Investor Relations [email protected] T +32 3 257 04 89

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Regulated information

XI. FINANCIAL OVERVIEWS

CONSOLIDATED OVERVIEW OF THE FINANCIAL POSITION

ASSETS (in KEUR) 31/12/2018 31/12/2017
I. FIXED ASSETS 823,559 490,425
B. Intangible fixed assets 13 16
C. Investment property 814,908 488,762
a. Property available to let 735,927 461,905
b. Property developments 78,981 26,857
D. Other tangible fixed assets 698 347
a. Tangible fixed assets for own use 698 347
E. Financial fixed assets 21 21
Other 21 21
G. Trade account receivables and other fixed assets 135 135
H. Deferred taxes – assets 460 2
I. Participating interests in associated companies and joint ventures with equity movements 7,325 1,143
II. CURRENT ASSETS 38,193 13,562
D. Trade account receivables 1,218 1,683
E. Tax receivables and other current assets 34,225 10,869
a. Taxes 738 778
c. Other 33,487 10,091
F. Cash and cash equivalents 1,676 815
G. Accruals and deferred payments 1,074 195
Prepaid property charges 9 94
Accrued rental income not due 980 36
Other 85 65
TOTAL ASSETS 861,752 503,987
LIABILITIES (in KEUR) 31/12/2018 31/12/2017
EQUITY 410,019 223,291
I.
Equity attributable to parent company shareholders
410,019 223,291
A. Capital 245,672 144,187
a. Issued capital 247,839 146,308
b. Capital increase costs (-) -2,167 -2,121

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B. Issue premiums 147,239 69,877
C. Reserves 1,003 -1,728
Reserve for the balance of the changes in the fair value of property 19,333 6,668
Reserve for the impact on the fair value of the estimated transaction fees and costs
resulting from the hypothetical disposal of investment property
-19,065 -6,642
Reserve for the balance of the changes in the fair value of permitted hedging
instruments that are not subject to hedging accounting as defined in the IFRS
-924 -1,866
Retained earnings from previous financial years 1,659 113
D. Net result for the financial year 16,105 10,954
II.
Minority interests
0 0
LIABILITIES 451,733 280,696
I. Non-current liabilities 424,203 259,657
B. Non-current financial debts 401,177 251,744
a. Credit institutions 401,177 251,744
C. Other non-current financial liabilities 6,317 924
a. Permitted hedging instruments 6,317 924
F. Deferred taxes – liabilities 16,709 6,988
a. Exit tax 34
b. Other 16,675 6,988
II. Current liabilities 27,530 21,039
B. Current financial debts 1,637 11,994
a. Credit institutions 1,637 11,994
D. Trade debts and other current payables 8,899 3,457
a. Exit tax 0 0
b. Other 3,457
Suppliers 6,486 2,151
Tenants 184 387
Taxes, wages and social security contributions 2,230 919
E. Other current liabilities 13,263 3,044
Other 13,263 3,044
F. Accruals and deferred payments 3,731 2,544
a. Deferred income 1,035 1,436
b. Accrued interest not due 790 237
c. Other 1,907 871
TOTAL EQUITY AND LIABILITIES 861,752 503,987

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CONSOLIDATED PROFIT AND LOSS ACCOUNT
Income statement (in KEUR) 31/12/2018 31/12/2017
I. (+) Rental Income 30,245 18,285
(+) Rental income 27,191 17,544
(+) Rental guarantees 3,106 807
(-) Rent reductions -52 -66
Impairments of trade receivables -165 -91
NET RENTAL INCOME 30,081 18,194
V. (+) Recovery of rental charges and taxes normally payable by the tenant on let properties 4,952 2,693
- Transmission of rental charges borne by the owner 4,822 2,594
- Charges for withholding tax and taxes on let properties 130 99
VII. (-) Rental charges and taxes normally payable by the tenant on let properties -5,544 -3,047
- Rental charges borne by the proprietor -5,422 -2,956
- Advance levies and taxes on let properties -122 -92
VIII. (+/-) Other rental-related income and expenditure 1,230 693
PROPERTY RESULT 30,718 18,533
IX. (-) Technical costs -844 -987
Recurring technical costs -825 -985
(-) Maintenance -654 -878
(-) Insurance premiums -171 -107
Non-recurring technical costs -19 -2
(-) Damages -19 -2
X. (-) Commercial costs -335 -210
(-) Publicity -322 -200
(-) Lawyers' fees and legal costs -13 -10
XI. (-) Costs and taxes for non-let properties -240 -148
XII. (-) Property management costs -1,802 -1,194
(-) Management costs (external) -1,246 -674
(-) Management costs (internal) -556 -520
XIII. (-) Other property charges -1,080 -756
(-) Architects' fees -1 -1
(-) Valuation expert fees -191 -154
(-) Other property charges -887 -600
(+/-) PROPERTY CHARGES -4,301 -3,295
PROPERTY OPERATING RESULT 26,418 15,238
XIV. (-) General company expenses -3,149 -2,068
XV. (+/-) Other operating income and costs 53 75
OPERATING RESULT BEFORE RESULT ON THE PORTFOLIO 23,323 13,245
XVI. (+/-) Result on the sale of investment property 0 31
XVII. (+/-) Result on the sale of other non-financial assets 0 0
XVIII. (+/-) Variations in the fair value of investment property 5,372 3,803

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Regulated information

(+) Positive variations in the fair value of investment property 8,826 5,333
(-) Negative variations in the fair value of investment property - 3,454 - 1,531
XIX. (+) Other portfolio result 351 -2,112
OPERATING RESULT 29,044 14,967
XX. (+) Financial income 183 48
(+) Interest and dividends collected 183 48
XXI. (-) Net interest costs -4,079 -2,666
(-) Nominal interest paid on loans -2,276 -1,810
(-) Reconstitution of the nominal amount of financial debt -87 -86
(-) Costs of permitted hedging instruments -1,716 -770
XXII. (-) Other financial costs -284 -74
- Bank costs and other commissions -253 -47
- Other -31 -27
XXIII. (+/-) Variations in the fair value of financial assets and liabilities -5,393 942
(+/-) FINANCIAL RESULT -9,572 -1,750
XXIV Share in the result of associated companies and joint ventures 270 194
RESULT BEFORE TAXES 19,742 13,410
XXV. Corporate taxes -3,637 -2,457
XXVI. Exit tax 0 1
(+/-) TAXES -3,637 -2,456
NET RESULT 16,105 10,954
EPRA EARNINGS 16,179 9,772
RESULT ON THE PORTFOLIO 5,722 1,722
DEFERRED TAXES WITH REGARD TO IAS 40 ADJUSTMENTS -673 -1,674
VARIATIONS IN THE FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES -5,393 942
SHARE IN THE RESULT OF JOINT VENTURES 270 194
EPRA EARNINGS
PER SHARE (in EUR)
1.46 1.43

CONSOLIDATED COMPREHENSIVE INCOME STATEMENT

In KEUR 31/12/2018 31/12/2017
Net result 16,105 10,954
Other components of the comprehensive income
(+/-) Impact on the fair value of the estimated transaction costs and costs resulting from
hypothetical disposal of investment properties
0 0
(+/-) Changes in the effective part of the fair value of permitted cash flow hedging
instruments
0 0
GLOBAL RESULT 16,105 10,954
Attributable to:
Minority interests 0 0
Group shareholders 16,105 10,954

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Consolidated cash flow overview
CONSOLIDATED CASH FLOW OVERVIEW (in KEUR) 31/12/2018 31/12/2017
CASH AND CASH EQUIVALENTS AT THE START OF THE FINANCIAL YEAR 815 4,098
1. Cash flow from operating activities -24,770 2,771
Cash flow with regard to operations: 24,875 11,709
Operating result 29,044 14,966
Interest paid -3,512 -3,055
Interest received 0 48
Other -657 -250
Non-cash elements added to/subtracted from the result -8,696 2,250
* Amortisations and impairments 87 41
- Amortisations/impairments (or writebacks) on tangible and intangible assets 87 41
* Other non-cash elements -8,783 2,209
- Changes in the fair value of the real estate property -5,722 -1,690
-
Other non-cash elements
-3,061 3,899
-Change in working capital requirements: -40,948 -10,625
* Movement of assets: -22,737 -8,911
* Movement of liabilities: -18,211 -1,714
2. Cash flow from investment activities -237,478 -212,351
Acquisition of investment property and property developments -146,771 -152,853
Sale of investment property 0 1,318
Purchase of shares in real estate companies -90,249 -60,367
Acquisition of other tangible assets -426 -156
Acquisition of non-current financial fixed assets -32 -290
Receivables on trade and other non-current assets -2
Assets held for sale
3. Cash flow from financing activities 261,637 205,712
* Change in financial liabilities and financial debts
- Increase in financial debts 234,130 202,975
- Decrease in financial debts -95,000 -70,000
- Repayment of shareholder loans
*Change in other liabilities -3,469
* Change in equity
- Increase (+)/decrease (-) in capital/issue premiums 130,776 83,992
- Costs for the issue of shares -46 -2,121
Dividend for the previous financial year -8,223 -5,665
Increase in cash following merger 1,473 66665
585
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 1,677 815

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Regulated information

EPRA earnings 31/12/2018 31/12/2017
Net result 16,105 10,954
Changes in the fair value of the real estate property -5,372 -3,803
Other portfolio results - 351 2,112
Result from the sale of investment properties 0 -31
Changes in the fair value of financial assets and
liabilities
5,393 -942
Share in the result of joint ventures -270 -194
Deferred taxes with regard to IAS 40 adjustments 673 1,674
EPRA earnings 16,179 9,772
Result on the portfolio 31/12/2018 31/12/2017
Result from the sale of investment properties 0 31
Changes in the fair value of the real estate property 5,372 3,803
Other portfolio results 351 -2,112
Result on the portfolio 5,722 1,722
EPRA earnings per share 31/12/2018 31/12/2017
Net result 16,105 10,954
Changes in the fair value of the real estate property -5,372 -3,803
Other portfolio results -351 2,112
Result from the sale of investment properties 0 -31
Changes in the fair value of financial assets and
liabilities
5,393 -942
Share in the result of joint ventures -270 -194
Deferred taxes with regard to IAS 40 adjustments 673 1,674
Weighted average number of shares 11,109,319 6,851,483
EPRA earnings per share 1.46 1.43

XII. ALTERNATIVE PERFORMANCE MEASURES (APMs): RECONCILIATION TABLES

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Regulated information

Average interest rate 31/12/2018 31/12/2017
Nominal interest paid on loans 2,276 1,810
Costs of permitted hedging instruments 1,716 770
Capitalised interest 1,612 504
Average outstanding debt for the period 304,323 183,947
Average interest rate
Average interest rate excl. costs of permitted hedging
1.84% 1.68%
instruments 1.28% 1.26%
Average financing costs 31/12/2018 31/12/2017
Nominal interest paid on loans 2,276 1,810
Costs of permitted hedging instruments 1,716 770
Capitalised interest 1,612 504
Reconstitution of the nominal amount of financial debt 87 86
Bank costs and other commissions 284 74
Average outstanding debt for the period 304,323 183,947
Average financing costs
Average financing costs excl. costs of permitted
1.96% 1.76%
hedging instruments 1.40% 1.34%
EPRA NAV
Net asset value according to the financial
31/12/2018 31/12/2017
statements 410,019 223,291
To be excluded:
Fair value of financial assets and liabilities 6,317 924
- Deferred taxes 16,675 6,988
EPRA NAV 433,011 231,203
EPRA NAV (EUR/share) 32 31.45 28.44
EPRA NNNAV 31/12/2018 31/12/2017
EPRA NAV 433,011 231,203
To be added
Fair value of financial assets and liabilities -6,317 -924
- Deferred taxes -16,675 -6,988
EPRA NNNAV 410,019 223,291
EPRA NNNAV (EUR per share) 33 29.78 27.47

32 Based on the number of outstanding shares.

33 Based on the number of outstanding shares.

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EPRA Net Initial Yield 31/12/2018 31/12/2017
Investment property – full property fair value 830,899 492,573
Investment property – share in joint ventures 20,224 6,235
Minus property developments -179,435 -101,951
Completed property portfolio 671,688 396,857
Transaction fees 20,718 11,875
Investment value of the property available for rent 692,407 408,733
Annualised gross rental income 35,099 21,442
Property charges -3,352 -2,308
Annualised net rental income 31,747 19,134
Notional amount at the end of the rent-free period - -
Adjusted annualised net rental income 31,747 19,134
EPRA Net Initial Yield 4.6% 4.7%
EPRA Adjusted Net Initial Yield 4.6% 4.7%
EPRA Rental Vacancy 31/12/2018 31/12/2017
Estimated rental value of the vacant units 637 534
Estimated rental value of the entire portfolio 54,757 22,519
EPRA Rental Vacancy 1.16% 2%
EPRA cost ratio 31/12/2018 31/12/2017
General expenses 3,149 2,068
Impairments of trade receivables 165 91
Property charges 4,301 3,295
EPRA costs (incl. vacancy costs) 7,615 5,454
Vacancy costs 240 148
EPRA costs (excl. vacancy costs) 7,375 5,306
Gross rental income 30,245 18,285
EPRA cost ratio (incl. vacancy costs) 25.2% 29.8%
EPRA cost ratio (excluding vacancy costs) 24.4% 29.0%

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Regulated information

XIII. Lexicon of the Alternative Performance Measures (APMs) used by Xior Student Housing

APM terms Definition Use
EPRA earnings The net result +/- changes in the fair
value of investment property +/- other
portfolio result +/- result of the sale of
investment property +/- changes in the
fair value of financial assets and
liabilities +/- deferred taxes with regard
to IAS 40 adjustments
Measuring the result of the strategic operational activities,
excluding changes in the fair value of investment property,
other portfolio result, the result from the sale of
investment property and changes in the fair value of
financial assets and liabilities and the deferred taxes with
regard to IAS 40. This indicates the extent to which
dividend payments are supported by the earnings.
Result on the portfolio Income from the sale of investment
property +/- changes in the fair value of
investment property +/- other portfolio
result
Measuring the realised and unrealised gain/loss on
investment property
Average interest rate Interest charges including IRS interest
expense divided by the average
outstanding debt during the period
Measuring the average debt interest costs to allow a
comparison with peers and analysis of the evolution over
time
Average interest rate excl.
IRS interest charges
Interest charges excluding IRS interest
expense divided by the average
outstanding debt during the period
Measuring the average debt interest costs to allow a
comparison with peers and analysis of the evolution over
time
Average financing costs Interest costs including IRS interest
expense + arrangement fees and
commitment fees, divided by the
average outstanding debt during the
period
Measuring the average debt financing cost to allow a
comparison with peers and analysis of the evolution over
time
Average financing cost excl.
IRS interest charges
Interest charges including IRS interest
charges + arrangement fees and
commitment fees, divided by the
average outstanding debt during the
period
Measuring the average debt financing cost to allow a
comparison with peers and analysis of the evolution over
time
EPRA earnings per share The net result +/- result of the sale of
investment property +/- changes in the
fair value of investment property +/-
other portfolio result +/- changes in the
fair value of financial assets and
liabilities +/- deferred taxes with regard
to IAS 40 adjustments divided by the
average number of shares
Comparability with other RRECs and international property
players
EPRA NAV This is the net asset value (NAV) that
has been
adjusted to also include
property and other
investments at their
fair value, which
exclude certain elements
that are not expected to
actually take shape
in a business model with
long-term investment property.
Comparability with other RRECs and international property
players
EPRA NNNAV EPRA NAV adjusted to take into account
(i) the fair value of the assets and
liabilities, (ii) the fair value of debts and
(iii) the deferred tax.
Comparability with other RRECs and international property
players
EPRA Net Initial Yield (NIY) Annualised gross rental income based
on the current rent on the closing date
excluding the property charges divided
by the portfolio market value plus the
estimated transaction rights and costs
in case of hypothetical disposal of
investment property.
Comparability with other RRECs and international property
players

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EPRA Adjusted Net Initial
Yield (Adjusted NIY)
This measure integrates an adjustment
of the EPRA NIY for the end of rent-free
periods or other non-expired rental
incentives.
Comparability with other RRECs and international property
players
EPRA rental vacancy Estimated rental value of vacant units
divided by the estimated rental value of
the total portfolio.
Comparability with other RRECs and international property
players
EPRA cost ratio (incl. vacancy
costs)
EPRA costs (including vacancy costs)
divided by the gross rental income, less
the rent still to be paid on rented land.
Comparability with other RRECs and international property
players
EPRA cost ratio (excl.
vacancy costs)
EPRA costs (excluding vacancy costs)
divided by the gross rental income, less
the rent still to be paid on rented land.
Comparability with other RRECs and international property
players

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Regulated information

About Xior Student Housing

Xior Student Housing NV is the first Belgian public regulated real estate company (RREC) specialising in the student housing segment in Belgium and the Netherlands. Within this property segment, Xior Student Housing offers a variety of accommodation, ranging from rooms with shared facilities to en-suite rooms and fully-equipped studios. Since 2007, as owner-operator, Xior Student Housing has built high-quality, reliable student housing for students looking for the ideal place to study, live and relax. A place with that little bit extra, where every student will feel at home right away.

Xior Student Housing has been accredited as a public REIT under Belgian law since 24 November 2015. Xior Student Housing's shares have been listed on Euronext Brussels (XIOR) since 11 December 2015. On 31 December 2018, Xior Student Housing had a property portfolio worth approximately EUR 815 million. More information is available at www.xior.be.

Xior Student Housing NV, Public RREC under Belgian law (BE-REIT) Mechelsesteenweg 34, bus 108, 2018 Antwerp (Belgium) BE 0547.972.794 (Antwerp Company Register, Antwerp department)

Disclaimer

This press release contains forward-looking information, projections, convictions, opinions and estimates produced by Xior in relation to the expected future performance of Xior and of the market in which it is active ('forward-looking statements'). By nature, forward-looking statements involve inherent risks, uncertainties and assumptions, both general and specific, that appear justified at the time at which they are made but which may or may not turn out to be accurate, and there is a risk that the forward-looking statements will not be realised. Some events are difficult to predict and may depend on factors outside of Xior's control. In addition, the forward-looking statements are only valid on the date of this press release. Statements in this press release relating to past trends or activities may not be interpreted as an indication that such trends or activities will persist in future. Neither Xior nor its representatives, officers or advisers can guarantee that the parameters upon which the forward-looking statements are based are free of errors, nor can they indicate, guarantee or predict whether the expected results set out in such a forward-looking statement will ultimately be achieved. Actual profits, the financial situation and Xior's performance or results may therefore differ substantially from the information projected or implied in forward-looking statements. Xior expressly declines any obligation or guarantee to publicly update or review forward-looking statements unless it is required to do so by law. This press release has been prepared in Dutch and has been translated into English and French. In case of discrepancies between the different versions of this press release, the Dutch version will prevail.

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