TIDMLXI
RNS Number : 8907G
LXI REIT PLC
20 March 2020
20 March 2020
LXI REIT plc
(the "Company", "Group" or "LXI REIT")
ROBUST AND DEFENSIVE BALANCE SHEET AND PORTFOLIO
The Board of LXi REIT plc (ticker: LXI), the specialist
inflation-protected very long income REIT, recognises that, whilst
it is too early to quantify the potential impacts of the COVID-19
(Coronavirus) pandemic , the Company remains well placed to
navigate effectively a prolonged period of uncertainty and to
mitigate the risks presented by it .
To date, the Company has not been directly impacted by COVID-19
and draws comfort from the Group's robust balance sheet and
high-quality portfolio of defensive commercial property assets let
or pre-let on very long term, index-linked leases to a wide range
of strong tenant covenants highly diversified by tenant, sector and
location.
The health and safety of colleagues, tenants, shareholders and
wider stakeholders continues to remain the Company's top priority,
especially during this period of uncertainty and volatility and the
Group is continuing to monitor closely the recommendations issued
by the World Health Organisation, Public Health England, the NHS
and other relevant authorities and is complying with these across
its business.
The Group remains in constant communication with all its staff,
tenants and key service providers and, as part of its Business
Continuity Procedures, the Company has a Pandemic Response Plan in
place which includes travel restrictions and remote working
policies.
Low, long dated and low-cost debt facilities, with significant
covenant headroom
-- The Company's debt is currently at 20% loan to value ("LTV"),
with no short or medium term refinancing risk given the 12-year
unexpired average duration of its long term debt facilities with
Scottish Widows, which are fully fixed at an all-in average rate of
2.94% pa.
-- This provides significant headroom to the covenant of 50%
and, similarly, the interest cover is c.600% versus the interest
cover test of 300%.
-- The Company also has a committed GBP100 million revolving
credit facility with Lloyds Bank, which is completely undrawn.
Defensive and diversified portfolio that is 100% let or pre-let
on very long leases to strong tenant covenants
-- The Company's portfolio is 100% let or pre-let to over 50
strong tenants, across nine sub-sectors. Further security is
provided through the tenants and guarantors being the main trading
or parent companies within the tenant groups.
-- The Company's leases average 22 years to first break and each
lease is drawn on a fully repairing and insuring basis - tenants
are responsible for repair, maintenance and outgoings, so there is
no cost leakage for the Company.
-- Each property is let on a fixed rent basis (ie, not related
to turnover or trading), with 96% of the income benefitting from
index-linked or fixed uplifts.
-- The Company's portfolio benefits from low, sustainable rents,
making the assets highly profitable and valuable to our tenants.
This is in part a consequence of the Company forward funding, on a
pre-let basis, brand new buildings and carefully structuring sale
and leasebacks.
-- A number of the Company's tenants, such as Aldi, Lidl and
BUPA, are in sectors which are trading more robustly in the current
climate.
-- In the sectors which COVID-19 has spot-lit, such as budget
hotels, pubs and drive-thru coffee shops, the Company's tenants -
Premier Inn, Travelodge, Greene King, Costa Coffee and Starbucks -
are financially robust, with strong balance sheets and material
cash holdings.
The Company will continue to keep shareholders and wider
stakeholders updated and informed as the situation evolves.
FOR FURTHER INFORMATION, PLEASE CONTACT:
LXI REIT Advisors Limited Via Maitland/AMO
John White (Partner, Fund Manager)
Simon Lee (Partner, Fund Manager)
Peel Hunt LLP Tel: 020 7418 8900
Luke Simpson
Maitland/AMO (Communications Adviser) Tel: 020 7379 5151
James Benjamin Email: lxireit-maitland@maitland.co.uk
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 5.75 pence per
ordinary share, starting from the financial period commencing 1
April 2019, with the potential to grow the dividend in absolute
terms through upward-only inflation-protected long-term lease
agreements, and is targeting a total NAV return of a minimum of 8
per cent. 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 Financial Conduct 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 250, FTSE EPRA/NAREIT
and MSCI indices.
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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contact rns@lseg.com or visit www.rns.com.
END
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