LXI REIT is considering an equity raise to part-fund the £500m acquisition of a portfolio of 18 Sainsbury’s supermarkets.
The group said that it was currently in discussions to acquire from Sainsbury’s, on a sale and leaseback basis, the 18-strong portfolio of prime grocery store assets, which are predominantly located in Southern England locations, but there can be no certainty that the acquisition, or the associated equity raise, will take place.
The company said that the portfolio “benefits from several defensive characteristics” including strong trading performance, very low and sustainable indexed rents, long-term ‘green’ leases, low site coverage and modern buildings that provide omni-channel sales optionality.
It added that it anticipates that the portfolio could be acquired for around £500m, equating to a net initial acquisition yield of around 5.0%, which it would seek to fund through a mix of new equity and debt in-line with its existing borrowing policy.
Discussions with potential investors about the possibility of an equity raise will take place, it said. Should any equity raise occur, it is expected to have an issue price set at a premium to the company’s estimated NAV per Ordinary Share as at 31 July 2022 (unaudited) of around 142 pence, reduced by the interim dividend of 1.575 pence per share that is expected to be declared shortly in respect of the quarter ended 30 June 2022.
LXI : LXI REIT considers equity raise to fund £500m Sainsbury’s portfolio buy