LXi REIT plc – Accretive acquisitions totalling £57million at 5.25% NIY

The Board of LXi REIT plc, the specialist inflation-protected long income REIT, has announced the following acquisitions, funded by its recent £250 million equity capital raise (the “Capital Raise”).

The acquisitions, which have been transacted on an off-market basis, total £57 million and reflect an accretive 5.25% net initial yield (net of purchase costs), versus the current portfolio valuation yield of 4.5%. The assets are secured to strong tenant covenants on long-term, index-linked leases and are underpinned by affordable rents.

The Company has now deployed £144 million since the Capital Raise which closed on 9 February. The Company is in solicitors’ hands on a range of additional assets and further announcements are expected to be made shortly.

BT forward funding

The Company has acquired, by means of a pre-let forward funding, a 77,000 sq ft office in Dundee.

The property has been fully pre-let to BT Group plc on a new, unbroken 17.5 year lease, with five yearly CPI inflation linked rental uplifts, capped at 3% per annum and collared at 1% per annum compounded.

The property, which will house BT’s critical infrastructure to handle emergency 999 telephone calls, will be built to a BREEAM Excellent standard, with an EPC target rating of A, and the development will include rooftop solar and EV charging points.

BT Group plc is a FTSE 100 constituent with a market cap of approximately £19 billion.

Full planning consent is in place, the Agreement for Lease has been exchanged and the property is being funded on a fixed price basis. The Company will receive a cash-backed income from the developer during the construction period in line with the purchase yield.

Cazoo sale and leaseback portfolio

The Company has acquired five customer service, car storage and repair and maintenance facilities in Chertsey, Northampton, Newcastle, Carlisle and Cardiff, by means of a sale and leaseback with Cazoo.

Each property is fully let to Cazoo Limited on a new, unbroken 20-year lease with five yearly CPI linked rental uplifts, capped at 4% per annum and collared at 2% per annum compounded.

Cazoo is a leading online car retailer, listed on the NYSE, with a market cap of approximately $3.4 billion.