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- LXi REIT forward funds East Midlands Premier Inn Hotel
LXi REIT has announce that it has exchanged contracts on the pre-let forward funded acquisition of a new Premier Inn hotel in the East Midlands. The total funding commitment is £6.9 million, reflecting a net initial yield of 5.20% (net of acquisition costs to the Company), and the acquisition is being funded from equity resources (following the second issue of shares on 12 October 2017), with senior debt finance expected to be introduced in the near term. LXi REIT says that, following the acquisition, it has fully deployed the net proceeds of its second equity issue of £60.2 million of 12 October 2017.
LXi REIT says that the Property has been fully pre-let to Premier Inn Hotels Limited, the principal hotel trading company of Whitbread PLC and Whitbread Group PLC is the tenant’s guarantor under the terms of the lease. The lease will run for a term of 25 years from completion of the building works, with no tenant break right. The rent is subject to five yearly upward only reviews index-linked to the Consumer Prices Index (collared and capped at 0% p.a. and 4% p.a. compound).
LXi REIT says that full planning consent has been granted, the tenant pre-let has exchanged and the Company is acquiring the land and forward funding on a fixed-price basis. The developer will pay the Company a licence fee during the construction period. The Company is not developing the site or assuming development risk. Completion of the purchase is due to occur in the next few weeks.
LXi REIT is a real estate investment trust (REIT). It is 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.
LXi REIT 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 property sectors. The Company says that it may invest in fixed-price forward funded developments, provided they are pre-let to an acceptable tenant and full planning permission is in place but that it will not undertake any direct development activity nor assume direct development risk.
LXi REIT forward funds East Midlands Premier Inn Hotel : LXI
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