LXI REIT (LXI), the specialist inflation-protected very long income REIT, has announced the following profitable disposal and accretive acquisition.
Disposals bring in £6.8m
Following receipt of an unsolicited approach, the company says it has sold a bus storage facility in Yardley Wood, near Birmingham, let to National Express Group PLC on a long lease, to a specialist REIT for £6.8m:
- reflecting a low exit yield of 4.2%, which compares favourably to the acquisition yield of 5.7% paid by the company;
- representing a 34% uplift on purchase price and a 13% premium to latest book value (as at 30 September 2019); and
- generating an attractive geared IRR for the Company of 36% per annum.
LXI says it retains its other bus storage facility in West Bromwich let to National Express Group PLC, which it acquired at the same time and on the same lease and pricing terms as Yardley Wood.
Acquisition
LXI has acquired, on a sale and leaseback basis, a 679-space car park in Croydon. The company said the following on the deal:
- The property has been leased back to Q-Park Limited, with a guarantee from its parent Q-Park N.V., on a new, unbroken, 35-year lease, with annual rent reviews linked to the Retail Prices Index.
- Q-Park is one of Europe’s leading parking providers, with more than 475,000 parking spaces across over 2,500 car parks in seven Western European countries.
- Croydon is located 10 miles south of Central London and is the largest London Borough in terms of population with a catchment of 363,378.
- The property benefits from multiple demand drivers including residential, office and leisure users and the rent has been set at a low level to provide strong rent cover.
John White, partner of LXI’s manager, noted:
“We are pleased to have completed the disposal of the Yardley Wood property at a significant premium to acquisition cost and book value, enabling us to recycle the proceeds into the accretive acquisition of a well-located car park secured to a substantial tenant covenant on a 35 year, RPI-linked lease, at a low capital cost.“
LXI: LXI announces profitable exit and accretive acquisition