Morgan Stanley believes Mirvac may struggle to achieve its targets on the Indigo build-to-rent units. The broker has visited the site and finds attractive features across the two buildings but concludes that rents are quite expensive.

It comes down to whether or not tenants will pay a 10-15% premium for the features of the complex. Equal-weight rating retained. Target is raised to $2.60 from $2.45. Industry view is In-Line.

Sector: Real Estate.

Target price is $2.60.Current Price is $2.29. Difference: $0.31 - (brackets indicate current price is over target). If MGR meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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