LXi REIT plc
(the “Company” or the “Group”)
PROFITABLE DISPOSAL AND ACCRETIVE ACQUISITIONS
The Board of LXi REIT plc (ticker: LXI), the specialist inflation-protected long income REIT, is pleased to announce the following profitable disposal and accretive acquisitions.
Disposal of Premier Inn anchored property
Following an unsolicited approach by a UK pension fund, the Company has exchanged contracts on the sale of its property in Saffron Walden let to Premier Inn, B&M, Pure Gym, Pets at Home and Costa for £19.33 million (a 4.45% net exit yield).
The Company acquired the property, through a forward funding transaction, for £15.8 million (a 5.72% net initial yield) and the sale generates an attractive 19% pa IRR for the Company. (The property was held for sale at the last valuation date.)
Acquisition of foodstore and industrial unit
The Company has exchanged contracts to purchase a M&S Simply Food store and a MKM trade unit, for a combined £9.44 million (reflecting an accretive 5.25% blended net initial yield), from separate developers.
The Company is acquiring the foodstore in Largs, North Ayrshire, by means of a pre-let forward funding transaction. The property, which will comprise 13,450 sq ft, has been fully pre-let to Marks & Spencer plc on a new, unbroken 15-year lease, with five yearly rental uplifts at a fixed growth rate of 2.5% per annum compounded. Marks & Spencer plc is a FTSE 250 constituent with a market cap of approximately £3 billion.
The trade unit, comprising 15,250 sq ft, is a builders' merchant facility constructed this year and fully let to MKM Building Supplies on a long lease, with 20 years unexpired to first break. The rent increases on a five-yearly basis in line with RPI inflation (capped at 3.5% pa and collared at 1.5% pa). MKM is the UK's largest independent builders' merchant.
Both acquisitions benefit from strong ESG credentials, including an EPC “A” rating and rooftop solar panelling at the MKM unit, and the M&S Simply Food development is also targeting an EPC “A” rating.
The balance of the sales proceeds will be invested in the Company's accretive pipeline.