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LXi REIT buys Bupa care home in Bristol for £13.8m

LXI REIT Bupa care Home Bristol

LXi REIT has announced that it has acquired a Bupa care home in Bristol for £13.8m. The Property, comprising a modern, high quality care facility providing nursing and residential care predominantly for privately funded patients, and reportedly benefits from high underlying occupancy levels. The purchase was conducted off-market and has been funded using the Company’s Scottish Widows loan facility. The £13.8m price tag reflects a 6.4% net initial yield (net of acquisition costs to the Company).

Bupa Care Home Bristol – let on a 23.5 year lease

The Property is fully let to Bupa Care Homes (ANS) Limited and guaranteed by its parent Bupa Care Homes (CFG) plc, on a long lease with over 23.5 years unexpired to first break and benefits from annual rent reviews increasing in line with RPI inflation (collared at 2% per annum and capped at 5% per annum).

The tenant and guarantor are part of the Bupa group, which runs a substantial range of care homes, health centres, dental centres and hospitals and provides health insurance and workplace health services, serving 32 million customers in 190 countries.

Location, location, location…

LXi REIT says that the Property is well situated in an affluent residential suburb of Bristol, to the north west of the city centre, close to Clifton and the Downs. Bristol is the largest commercial centre in the south west region, benefiting from excellent road links due to its location at the intersection of the M4 and M5 motorways and is also easily accessible by rail, air and sea.

John White, Partner of LXI REIT Advisors Limited says that the acquisition “is accretive to the Company in terms of yield, lease length, rent review profile and tenant strength”. The initial yield of 6.4% is over 340 basis points higher than the cost of LXI’s long-term debt facility.

About LXi REIT

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. Further information on the Company is available at www.lxireit.com

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