LXi REIT has announced that, following the completion of its £200m equity fundraising that was announced on 13 June, it has completed a number of acquisitions for a combined total investment of approximately £135 million. The company says that this reflects a weighted average net initial acquisition yield of 5.7% (net of acquisition costs). The Acquisitions have been made individually from separate vendors and developers. They include both pre-let forward fundings and built assets, and comprise both long-let and index-linked assets. The company says that it is working to deploy the balance of the proceeds of the capital raise, with further acquisition announcements expected to be made shortly. Details of then purchases are provided below.
Aldi forward funding, St Albans
LXi REIT has acquired, by way of a pre-let forward funding, a new Aldi-led scheme in St Albans, Hertfordshire. The foodstore has been pre-let to Aldi Stores Limited, the principal UK trading company of the Aldi group, on a new, unbroken 25-year lease with five yearly rental uplifts fixed at 2% per annum compounded. Aldi is a major discount supermarket, operating 10,000 foodstores across 20 countries.
Travelodge forward funding, Cumbria
LXi REIT has acquired, by way of a pre-let forward funding, a new 78-bedroom Travelodge hotel and Costa Coffee shop in Workington, Cumbria. The hotel has been pre-let on a new, unbroken 25-year lease to Travelodge Hotels Limited, the principal trading company of the Travelodge group, and the coffee shop has been pre-let to Costa Limited, the principal trading company of the Costa Coffee group, on a new, unbroken 15-year lease. Both leases benefit from five yearly rent reviews index-linked to the Retail Prices Index.
Travelodge is a budget hotel operator, with over 40,000 bedrooms across more than 560 hotels in the UK, Ireland and Spain. Costa is the UK’s largest and the world’s second largest coffee shop chain with over 2,100 UK outlets and more than 1,280 in 31 overseas markets. The Coca-Cola Company completed the acquisition of Costa Limited in early 2019.
LXi REIT says that it is not developing the above two sites or assuming development risk and is forward funding each property on a fixed price basis. The Company will receive an income from the developers during the construction periods.
Q-Park car parks
LXi REIT has acquired, on a sale and leaseback basis, seven Q-Park car parks in strong city centre locations in London, Edinburgh, Glasgow, York, Manchester and Sheffield. Each property has been leased back to Q-Park Limited, with a guarantee from its parent Q-Park N.V., on new, unbroken, 35-year leases, with annual rent reviews index-linked to the Retail Prices Index. LXi REIT says that Q-Park is one of Europe’s leading car park operators, with over 880,000 parking spaces across 6,700 car parks in 10 European countries.
Eddie Stobart distribution facility, West Midlands
LXi REIT has acquired a 91,000 square foot distribution facility on a 10-acre site in Cannock, Staffordshire, a strong West Midlands logistics location. The property benefits from a new, unbroken 20-year lease to Eddie Stobart Limited, with a guarantee from its parent ESLL Group Limited, with five yearly rent reviews index-linked to the Retail Prices Index. Eddie Stobart is a provides end-to-end logistics services, including road transport, supply chain management, warehousing and distribution services.
Greene King family pubs
LXi REIT has acquired 14 family-oriented, food-led public houses in Cheshire, Manchester, Lancashire, Yorkshire, Staffordshire, Newcastle and County Durham. Each property has been let to Greene King plc, with 15-year unexpired and unbroken lease terms, with annual rent reviews to a fixed uplift of 2.5% per annum compounded. Greene King plc, an investment rated consitutent of the FTSE 250 Index with a market cap of approximately £1.9 billion, is a major UK’s pub retailer and brewer with over 2,900 pubs, restaurants and hotels across the UK.
Dobbies Garden centre, West Yorshire
LXi REIT has acquired, on a sale and leaseback basis, a garden centre in Pennine, West Yorkshire. The property has been leased back to Dobbies Garden Centres Limited, with a guarantee from its parent Dobbies Garden Centres Group Limited, on a new, unbroken 30-year lease, with annual rent reviews index-linked to the Retail Prices Index. LXi REIT says that Dobbies is a 150-year old, market-leading garden centre owner and operator.
Comments from John White, partner of LXI REIT Advisors Limited
“We are pleased to have swiftly and carefully deployed £135 million of the net proceeds of our recent £200 million capital raise in secure, long-let and index-linked assets. We look forward to investing the balance in short order from our advanced pipeline of additional assets, which are expected to deliver further value for our shareholders.”
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