LXI buys Stobart biomass storage and processing plant – The board of LXi REIT says that the company has acquired the freehold interest in the Stobart biomass storage and processing plant in Rotherham, Yorkshire in a sale and leaseback transaction. The purchase price for the property is GBP3.4 million, reflecting a net initial yield of 6.2% (net of acquisition costs).
The property has been acquired with a new 20-year lease in place and is fully let to Stobart Biomass Products Limited and guaranteed by its parent, Stobart Group Ltd, a FTSE 250 listed company and one of the UK’s leading infrastructure and support service businesses operating in the energy, aviation and rail sectors.
The new 20-year lease, which has no tenant break right, benefits from five yearly Retail Prices Index linked rent reviews (collared at 1.5% per annum and capped at 4% per annum).
The property extends to a total of six acres and will be used by Stobart Group as a storage and processing site to supply the nearby 41 megawatt Templeborough Biomass Power Plant with biomass timber waste. The Property is located close to the centre of Rotherham and has good access to the national motorway network, with the M1 and M18 in close proximity.
The acquisition is being funded using the proceeds of the company’s new 11.5-year loan facility secured from Scottish Widows in December 2017 at a fixed rate of 2.85% per annum.
John White, Partner of LXi REIT Advisors Limited, commented: “We are pleased to have acquired, off-market, the Stobart biomass storage and processing facility, which provides the company with an attractive net initial yield and secure, long-dated, inflation-linked income stream. The property is underpinned by a strong industrial location and residual value and further diversifies the Company’s tenant and sector exposure.”
LXI : LXI buys Stobart biomass storage and processing plant