LXI REIT looks to grow – LXI REIT hopes to raise £75m by way of an initial placing, open offer, offer for subscription and intermediaries offer for a target issue of up to 60,164,539 new ordinary shares at an issue price of 124.5p. The issue price represents a premium of 2.3% to the estimated NAV as at 31 December 2020 (adjusted for the recent 1.44p dividend) and a 3% discount to the closing price on 15 February 2021. Shareholders are also being asked to approve a one-year placing programme totalling 400m shares.
The investment adviser has identified a significant pipeline of additional assets which meet the investment objective and policy, the vast majority of which have been sourced off-market through the adviser’s contacts and relationships. This pipeline, which totals around £140m (including expected costs), is diversified across a range of defensive and structurally supported sub-sectors. These include foodstores, industrial, drive-thru coffee and garden centres. The pipeline assets benefit from a long weighted average unexpired lease term to expiry of 21 years and to first break of 20 years and a blended net initial yield of 5.5% (net of acquisition costs). These assets are diversified by location and leased to a range of institutional-grade tenants with strong financial covenants, with rental uplifts linked to inflation or a fixed growth rate and with a good mix within the pipeline of built assets and forward funded structures.