TIDMLXI
RNS Number : 5361C
LXI REIT PLC
20 October 2020
20 October 2020
LXi REIT plc
(the "Company" or the "Group")
PROFITABLE DISPOSALS AND ACCRETIVE ACQUISITIONS
As part of its ongoing plan to actively manage its portfolio,
LXi REIT plc (ticker: LXI) is pleased to announce three profitable
disposals for a total value of GBP17 million, and two accretive
acquisitions in the foodstore sector, which are being acquired for
a total sum of GBP15 million, reflecting an attractive blended net
initial yield of 5.5% (net of acquisition costs).
Disposal of Glasgow office
The Company has sold its sole office, a long-let property in
Cambuslang, Glasgow occupied by the local council, to a specialist
REIT for GBP8 million, reflecting a low exit yield of 4.2%.
The disposal pricing reflects a premium of 17% to purchase price
and generates an attractive geared IRR of over 16% per annum
(double the Company's 8% per annum target return). The sale price
is in line with latest book value.
Disposal of social housing assets
The Company has sold 11 long-let social housing assets for a
combined sum of GBP8.5 million, reflecting a 5.2% exit yield, to a
social infrastructure fund.
The disposal pricing reflects a premium of 14% to purchase
price, a 2% premium to latest book value (as at 31 March 2020) and
generates an attractive geared IRR of 13% per annum.
Sale of non-operational land at Travelodge property
The Company has sold a non-operational plot adjacent to its
Travelodge hotel in Llanelli to a petrol filling station operator
for GBP500,000.
The land was not used by the hotel and the sale has not reduced
its rental level or capital value and thus represents an additional
net receipt for the Company from land which had zero book
value.
The Investment Advisor is also in advanced discussions regarding
further value-enhancing asset management transactions at other
Travelodge sites.
Forward funding acquisition of Lidl foodstore and EV charging
points
The Company has exchanged contracts on the pre-let forward
funding acquisition of a Lidl foodstore in West Bridgford,
Nottinghamshire.
The foodstore has been fully pre-let to Lidl on a 25-year lease
(with a one-off break right at year 15), with five yearly rental
uplifts in line with annually compounded RPI inflation (capped at
3% pa and collared at 1% pa).
The lease is guaranteed by the top trading company of the Lidl
group, which has GBP10.5 billion of net assets, and the foodstore
has a low starting rent of GBP16 per sq ft.
The Company is also forward funding EV charging points at the
property, pre-let on an unbroken 25-year, RPI-linked lease to a
specialist EV operator.
The freehold site comprises just over four acres and benefits
from 180 car parking spaces.
West Bridgford is an affluent town in the Rushcliffe borough of
Nottingham, situated 1.5 miles south of Nottingham city centre. The
immediate area is predominantly residential, with a number of
schools and health facilities nearby.
The attractive pricing reflects the off-market,
relationship-driven nature of the acquisition and the thinner
market for forward funding pre-let assets in smaller lot sizes in
the current climate.
The Company is forward funding the property on a fixed-price,
pre-let and fully planned basis and therefore not assuming direct
development risk. The Company will receive an income from the
developer during the construction period at a rate equivalent to
the net initial yield.
Acquisition of Aldi foodstore, Lytham St Annes
The Company has acquired, from an administrator, a foodstore in
Lytham St Annes, which was purpose built for Aldi in 2014 and has a
strong trading history.
The property is fully let to Aldi Stores Limited, the principal
UK trading company of the Aldi group, with over 18 years unexpired
to first break and benefits from five yearly fixed uplifts of 2.5%
per annum compounded. The fixed uplifts will provide rental growth
of over 13% in three years' time.
Aldi is one of Europe's leading discount grocers with over
10,000 stores in 20 countries.
Lytham St Annes is an affluent coastal town with a strong
tourism industry.
Simon Lee, Co-Manager of LXI REIT plc, commented:
"This capital recycling reflects the Company's continuing, but
selective, expansion into the foodstore sector, with a particular
focus on right-sized stores acquired off-market at attractive
yields and let or pre-let to strong tenants on low, sustainable
rents. The sales have crystallised attractive returns on assets
from which we have extracted maximum value."
FOR FURTHER INFORMATION, PLEASE CONTACT:
LXI REIT Advisors Limited Via Maitland/AMO
Simon Lee (Partner, Fund Manager)
John White (Partner, Fund Manager)
Peel Hunt LLP Tel: 020 7418 8900
Luke Simpson/Liz Yong
----------------------------------------
J efferies International Tel: 020 7029 8000
Ed Matthews/Tom Yeadon
----------------------------------------
Maitland/AMO (Communications Adviser) Tel: 020 7379 5151
James Benjamin Email: lxireit-maitland@maitland.co.uk
----------------------------------------
The Company's LEI is: 2138008YZGXOKAXQVI45
NOTES:
LXI REIT plc invests in UK commercial property assets let, or
pre-let, on very long (typically 20 to 30 years to expiry or first
break), inflation-linked leases to a wide range of strong tenant
covenants across a diverse range of robust property sectors.
The Company may invest in fixed-price forward funded
developments, provided they are pre-let to an acceptable tenant and
full planning permission is in place. The Company will not
undertake any direct development activity nor assume direct
development risk.
The Company is targeting a quarterly dividend of 1.35 pence per
ordinary share for the quarter that commenced on 1 July 2020* and a
quarterly dividend of 1.44 pence per ordinary share for the quarter
that commenced on 1 October 2020.* It will continue to monitor the
improving visibility on its future rent collection and is keeping
its dividend guidance under careful review on a quarterly
basis.
The Company, a real estate investment trust ( " REIT " )
incorporated in England and Wales, is listed on the premium listing
segment of the Official List of the UK Listing Authority and was
admitted to trading on the main market for listed securities of the
London Stock Exchange in February 2017.
The Company is a constituent of the FTSE 250, EPRA/NAREIT and
MSCI indices.
Further information on the Company is available at
www.lxireit.com
* These are guidance levels or targets only and not a profit
forecast and there can be no assurance that they will be met.
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END
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