TIDMLXI
RNS Number : 2972Y
LXI REIT PLC
12 May 2021
12 May 2021
LXi REIT plc
(the "Company", the "Group" or " LXi REIT ")
ACCRETIVE LONG INCOME ACQUISITIONS TOTALLING GBP36 MILLION
FULL DEPLOYMENT OF PROCEEDS OF RECENT EQUITY CAPITAL RAISE
The Board of LXi REIT (ticker: LXI), the specialist
inflation-protected long income REIT, is pleased to announce that
it has exchanged contracts on the forward funding acquisition of a
portfolio of Costa drive-thrus and an industrial asset for a total
cost of GBP36 million (the "Acquisitions"). The Acquisitions fully
deploy the balance of the Company's GBP125 million equity capital
raise of 11 March 2021 and will further utilise the Group's
revolving credit facility ("RCF").
The Acquisitions benefit from a long average unexpired lease
term to first break of 22 years, an accretive average net initial
yield of 5.25% (net of acquisition costs), are let to strong tenant
covenants on sustainable rents, and 100% of the income is
index-linked to RPI inflation through contractual rental
uplifts.
The Company will fund further acquisitions through utilising the
Group's RCF and further acquisition announcements are expected to
be made shortly.
Costa coffee drive-thru portfolio forward funding
The Company has exchanged contracts on the pre-let forward
funding of a portfolio of nine drive-thru coffee units across the
UK, to be developed for and pre-let to Costa Limited on new, long
term leases. The rent will increase in line with RPI inflation on a
five yearly basis.
Each asset is being built on the car park of a Morrisons
foodstore, with good roadside prominence and dense catchment
populations. When combined with the 12 Starbucks drive-thrus and
one Costa drive-thru that the Company forward funded in 2020, the
Company will now own a portfolio of 22 drive-thru coffee units
located in Morrisons car parks.
Costa Limited, which was acquired by Coca-Cola in 2019 from
Whitbread PLC in a $4.9 billion transaction, is the largest coffee
shop operator in the UK with over 2,681 units. Coca-Cola is listed
on the New York Stock Exchange with a market cap of $235
billion.
Industrial facility, Midlands
The Company has acquired a substantial industrial facility in
the Midlands. The property has been let to a leading operator on a
new, unbroken 25 year lease. The rent will be reviewed on a five
yearly basis in line with RPI inflation.
The property is a key operating asset for the tenant and is let
on a low, sustainable rent, underpinned by a strong residual
value.
John White, Partner, LXI REIT Advisors, commented :
"We are pleased to have deployed swiftly and carefully the full
proceeds of our recent equity capital raise into accretive,
high-quality investments. These acquisitions are in structurally
supported sectors and further enhance the quality and
diversification of our business, including providing further scale
to our drive-thru coffee portfolio. Whilst we are not able to share
some of the asset specific details due to confidentiality, all of
the properties have been acquired off low base rents and at
accretive average entry yields and provide secure, long-dated,
index-linked income and potential for capital growth, underpinned
by strong tenant covenants."
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
Luke Simpson/Liz Yong 020 7418 8900
---------------------------------
J efferies International
Ed Matthews/Tom Yeadon 020 7029 8000
---------------------------------
Maitland/AMO (Communications Adviser) 07747 113 930
James Benjamin 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 an annual dividend of 6.0 pence per
ordinary share for the 12-months commencing 1 April 2021*.
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, FTSE 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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