TIDMLXI
RNS Number : 5465G
LXI REIT PLC
26 November 2020
26 November 2020
LXi REIT plc
(the "Company" or the "Group")
ACQUISITIONS TOTALLING GBP61 MILLION AND PORTFOLIO UPDATE
The Board of LXi REIT plc (ticker: LXI), th e specialist
inflation-protected very long income REIT, is pleased to report the
acquisition of 11 foodstores and two discount stores from five
different vendors/developers for a total cost of GBP61 million
("the Acquisitions").
The Acquisitions have been acquired at an attractive average net
initial yield of 5.7% (net of acquisition costs) and with a strong
and diversified tenant base in the form of Aldi, Lidl, Waitrose,
Co-op, Iceland, B&M and The Range.
The Acquisitions deploy the disposal proceeds of the Group's
recently sold BCA facility in Corby ("the BCA Facility") at a yield
which is materially higher than both the 4.45% exit yield on the
BCA Facility and the Group's latest portfolio valuation yield of
5.1%.
The Acquisitions reflect the Company's yield-disciplined focus
on smaller sized foodstores which are currently the primary focus
for our grocery tenants being right-sized for their preferred
product range, but also offering online fulfilment through either
or both of home delivery and click & collect.
The Acquisitions are let or pre-let on long, index-linked or
fixed uplift leases with low current rents (averaging GBP14 per sq
ft) and low capital value pricing (averaging GBP230 per sq ft).
The Group's whole portfolio now has a long WAULT to first break
of 22 years, with 96% index-linked or fixed uplift rent reviews and
is well diversified across the following robust sub-sectors:
Industrial (21%), Budget Hotels (21%), Foodstores and Essentials
(20%), Healthcare (13%), Car Parks (8%), Pubs (5%), Drive-thru
Coffee (4%) and Other (8%).
Aldi foodstore forward funding, Northumberland
The Company has exchanged contracts on the pre-let forward
funding of an Aldi-anchored scheme in Berwick-upon-Tweed,
Northumberland.
The foodstore, which will extend to 19,000 sq ft, has been fully
pre-let to Aldi Stores Limited (the principal UK trading company of
the Aldi group) on an unbroken 20-year lease commencing on
completion of the building works, with five-yearly RPI
inflation-linked reviews. The starting rent is a low GBP16 per sq
ft.
The adjoining 10,000 sq ft unit has been fully pre-let to
Iceland Foods Limited, trading as Food Warehouse (the principal
trading company of the Iceland Foods group) on an unbroken 10-year
lease, with upwards only rent reviews and a low starting rent of
GBP16.40 per sq ft.
Lidl foodstore, Hampshire
The Company has acquired a 26,800 sq ft foodstore in Portsmouth,
Hampshire. The property, which was purpose built for the tenant in
2017 and trades strongly, is fully let to Lidl UK GMBH (the
principal UK trading company of the Lidl group), with 22 years
until expiry and 17 years until first break.
The rent is reviewed on a five-yearly basis at a fixed growth
rate of 2% per annum compounded. At the next rent review, which
will take place in two years' time, the rent will still be at a
very low rate of GBP12 per sq ft.
Waitrose foodstore, Cheshire
The Company has acquired a 25,000 sq ft foodstore in Poynton,
Cheshire. The property, which was purpose built for the tenant in
2010 and trades strongly, is fully let to Waitrose Limited (the
principal trading company of the Waitrose group), with 15 years
unexpired until first break.
The rent is reviewed on a five-yearly basis at a fixed growth
rate of 2.5% per annum compounded.
The store is the dominant foodstore in its locality, which draws
on an affluent catchment population, and benefits from a material
online delivery capability.
Co-Op portfolio
The Company has acquired a portfolio of seven Co-Op foodstores
in Blackpool, Glasgow, Pontypridd, Sandbach, Southport, Wallasey
and Wrexham, from a mortgagee.
Each property is let to the Co-Operative Group Limited (the
principal company of the Co-op group) with over 16 years unexpired
to first break and with annual rental uplifts fixed at 2.25% per
annum.
The portfolio benefits from a low average rent of GBP15.80 per
sq ft and a liquid average lot size of 12,000 sq ft. The properties
also have the advantage of a high number of parking spaces,
averaging 51 per store, which help ensure a good customer
experience with quick and easy access to the store as well as
assisting the tenant in their provision of additional services and
sales channels such as click & collect.
B&M and The Range, Yorkshire
The Company has acquired two discount stores, comprising 72,000
sq ft in Bradford, Yorkshire, which were purpose built for the
tenants in 2019.
The first unit is fully let to The Range (through its principal
UK trading company, CDS (Superstores International) Limited), with
19 years until first break and fixed rental uplifts of 2.5% per
annum compounded.
The second unit is fully let to B&M Retail Limited (the
principal trading company of the FTSE 100 listed B&M group),
with 14 years until first break and fixed rental uplifts of 2% per
annum compounded.
The current average rent on the two units is an exceptionally
low GBP7 per sq ft.
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
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J efferies International Tel: 020 7029 8000
Ed Matthews/Tom Yeadon
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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 1.44 pence per
ordinary share for the quarter that commenced on 1 October
2020.*
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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