TIDMLXI
RNS Number : 9595E
LXI REIT PLC
24 October 2018
24 October 2018
LXI REIT plc
(the "Company" or "LXI REIT")
FIVE ACQUISITIONS WITH A COMBINED PURCHASE PRICE OF GBP109
MILLION
Following the successful closing of its capital raise announced
on 12 October, the Board of LXi REIT plc (ticker: LXI), the
specialist inflation-protected very long income REIT, is pleased to
announce the following five property acquisitions, from separate
vendors/developers, with a combined total consideration of
approximately GBP109 million (excluding costs).
The Company is in solicitors' hands on further acquisitions
which will fully deploy the balance of the GBP175 million capital
raised in the next few weeks. Further acquisition announcements
will be made shortly.
Forward funding of Travelodge hotel, Edinburgh
The Company has exchanged contracts to provide forward funding
for the pre-let development of a 70-bedroom Travelodge hotel at
Edinburgh Park, Edinburgh. The development represents a total
investment by the Company of GBP6.6 million, reflecting a 5.4% net
initial yield (net of acquisition costs to the Company).
The property has been fully pre-let to Travelodge Hotels
Limited, the principal trading company of the Travelodge hotel
group, on an unbroken 25-year lease from completion of the building
works, with five yearly rent reviews index-linked to the Consumer
Prices Index (capped at 4% pa and collared at 1% pa compound).
Founded in 1985, Travelodge is one of the UK's leading hotel
brands, operating over 550 hotels and over 41,000 rooms in the UK,
Spain and Ireland.
The well-located property is within the South Gyle Business
District, which is two miles south east of Edinburgh International
Airport and five miles west of Edinburgh city centre. The immediate
area is one of the UK's premier business locations housing a wide
range of corporate occupiers, including Aegon, BT, Diageo, JP
Morgan, Scottish & Newcastle and Tesco Bank.
Planning consent has been granted, the agreement for lease has
exchanged and the Company is forward funding the project on a fixed
price basis. The Company will receive an income from the developer
during the construction period. The Company is not developing the
site or assuming development risk. The building works are due to
complete in Q3 2019.
Forward funding of Lidl foodstore and B&M, East Fife
The Company has exchanged contracts to provide forward funding
for the pre-let development of a 19,310 sq ft Lidl foodstore and
20,000 sq ft B&M discount store to be built at Cowdenbeath,
East Fife, for GBP8.5 million, reflecting a 6.0% net initial yield
(net of acquisition costs to the Company).
The Lidl property has been fully pre-let to Lidl UK GmbH, the
principal UK trading company of the Schwarz Gruppe GmbH (a top four
global retail group that owns and operates the Lidl and Kaufland
brands, operating over 10,000 stores across 26 countries), on a
25-year lease from completion of the building works (with a tenant
break right at year 15), with five yearly rent reviews index-linked
to the Consumer Prices Index (capped at 3% pa and collared at 1% pa
compound).
The B&M property has been fully pre-let to B&M Retail
Limited, the principal trading company of B&M European Value
Retail SA, on an unbroken 15-year lease from completion of the
building works, with five yearly upward only open market rent
reviews.
B&M European Value Retail SA, a London Stock Exchange listed
company with a market capitalisation of GBP3.9 billion, is the UK's
leading general merchandise value retailer, operating over 580
stores.
The property is well located in Cowdenbeath, a town in west
Fife, approximately five miles north-east of Dunfermline and 18
miles north of Edinburgh, with a catchment population of
265,189.
Planning consent has been granted, the agreements for lease have
exchanged and the Company is forward funding the project on a fixed
price basis. The Company will receive an income from the developer
during the construction period. The Company is not developing the
site or assuming development risk. The building works are due to
complete in Q3 2019.
Jurys Inn hotel, Plymouth
The Company has completed the acquisition of a 247-bedroom Jurys
Inn hotel in Plymouth for GBP30 million, reflecting a 5.7% net
initial yield (net of acquisition costs to the Company).
The property is fully let to Jurys Hotel Management (UK)
Limited, the principal trading company of the Jurys Inn group, with
an unbroken 24-year unexpired lease term, with five yearly rent
reviews index-linked to the uncapped Retail Prices Index.
The hotel, which was purpose-built in 2007 and fully refurbished
in 2016, trades very well and includes a bar, restaurant and 11
conference and meeting rooms. It is well-located on Exeter Street,
near Plymouth's Historic Quarter and other tourist attractions such
as the National Marine Aquarium and the Royal William Yard, and a
short walk to the city centre and train station.
The hotel is one of the largest in Devon and draws significant
custom from (i) leisure tourism, with many overseas visitors,
including bus tours, using the hotel as a base from which to
explore Devon and Cornwall; (ii) businesses linked to the maritime
docks; and (iii) a strong relationship with the university.
The Jurys Inn portfolio comprises 36 hotels and 8,013 rooms in
strategic locations in economically-strong and attractive
destinations and transport hubs across the UK and Ireland. The
group was acquired in December 2017 by Fattal Group, an Israeli
hotel group operating 160 hotels in 17 countries, for GBP800
million.
BCA logistics facility, Corby
The Company has completed the acquisition of a 121-acre car
storage facility in Corby, Northamptonshire, for GBP60 million,
reflecting a 5.25% net initial yield (net of acquisition costs to
the Company), rising to over 6.0% at the next five yearly rent
review in three years' time.
The property is fully let to BCA Group Europe Limited, part of
BCA Marketplace plc, with an unbroken 18-year unexpired lease term,
with five yearly rent reviews index-linked to the uncapped Retail
Prices Index.
BCA Marketplace plc, a London Stock Exchange listed company with
a market capitalisation of GBP1.7 billion, is Europe's leading used
vehicle distributor and remarketing company, operating 50 branches
in 13 countries and selling over one million vehicles per annum.
BCA's brands include "WeBuyAnyCar.com".
The property comprises a substantial and strategic logistics
holding with a capacity for over 18,000 cars and from which BCA
operate a number of long term contracts, including for BMW Finance
and Vauxhall's primary vehicle storage/resale centres. It is rail
terminal connected and has excellent connections to the M1
southbound, the M6 and A1(M) via the A14 dual carriageway.
Corby is an established and strategic distribution location in
the heart of the East Midlands, which attracts major distribution
operators given its access to 80% of the UK population within a
4.5-hour HGV drive time and a number of major occupiers include
Matalan, Morrisons, Staples and Wincanton.
The property adjoins the Midlands Logistics Park, a new
logistics park to the south of Corby, which has recently attracted
new developments including an 845,000 sq ft regional distribution
facility for Eddie Stobart and a 950,000 sq ft national
distribution centre for Bosch-Siemens group.
The purchase price, equating to a low GBP495,000 per acre, is
significantly underpinned by vacant possession value.
The Range, Carlisle
The Company has completed the acquisition of a 33,500 sq ft
discount store in Carlisle for GBP4.3 million, reflecting a 6.0%
net initial yield (net of acquisition costs to the Company).
The property is fully let to CDS Superstores (International)
Limited, trading as The Range, with an unbroken 19.5-year unexpired
lease term, with fixed five yearly rental uplifts of 2% pa. The
rent reflects a very low GBP8 per sq ft.
The Range is one of the fastest growing discounters in the UK,
operating 140 discount stores and stocks some 65,000 products
across its home, leisure and garden departments. The property is
located approximately one mile south of Carlisle city centre in a
successful trading location, with nearby operators including Asda,
B&M and Iceland.
Simon Lee, Partner of LXi REIT Advisors Limited, commented:
"We are pleased to be investing just over GBP109 million from
our GBP175 million capital raising announced on 12 October. These
are five high quality assets, diversified across a wide range of
robust sub-sectors, leased to institutional grade tenants on very
long term leases with inflation linked rents.
The Company is in solicitors' hands on a range of further
accretive acquisitions that meet our selective investment strategy
and will deliver further value to our investors. These acquisitions
will result in the full deployment of the recent capital raise in
the next few weeks."
FOR FURTHER INFORMATION, PLEASE CONTACT:
LXI REIT Advisors Limited Via Newgate Communications
John White (Partner, Fund Manager)
Simon Lee (Partner, Fund Manager)
Peel Hunt LLP Tel: 020 7418 8900
Luke Simpson
---------------------------------
Newgate (Communications Adviser) Tel: 020 7680 6550
James Benjamin Email: lxireit@newgatecomms.com
Anna Geffert
---------------------------------
The Company's LEI is: 2138008YZGXOKAXQVI45
NOTES:
LXi REIT plc invests in UK commercial property assets let, or
pre-let, on very long (typically 20 to 30 years to first break),
inflation-linked leases to a wide range of strong tenant covenants
across a diverse range of robust property sectors.
The Company may invest in fixed-price forward funded
developments, provided they are pre-let to an acceptable tenant and
full planning permission is in place. The Company will not
undertake any direct development activity nor assume direct
development risk.
The Company is targeting an annual dividend of 5.50 pence per
ordinary share, starting from the financial period commencing 1
April 2018, with the potential to grow the dividend in absolute
terms through upward-only inflation-protected long-term lease
agreements, and is targeting a net total shareholder return of a
minimum of 8 per cent. plus per annum over the medium term.*
The Company, a real estate investment trust ("REIT")
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. The Company is a
constituent of the FTSE EPRA/NAREIT index.
Further information on the Company is available at
www.lxireit.com
* These are targets only and not a profit forecast and there can
be no assurance that they will be met.
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END
ACQLLFEDILLVFIT
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