Acquisition of supported living portfolio
16 October 2017
LXi REIT plc
(the "Company" or "LXI REIT")
£18.9 MILLION ACQUISITION OF A LONG-LET SUPPORTED LIVING PORTFOLIO
The Board of LXi REIT plc (ticker: LXI) is pleased to announce that the Company has exchanged contracts on the acquisition of the freehold interest in a portfolio of regulated long-let supported living properties located in Greater London (50%), Devon (30%), Surrey (14%), Essex (4%) and Northampton (2%) (the "Portfolio"). The purchase price for the Portfolio is £18.9 million, reflecting a net initial yield of 6.0% (net of acquisition costs to the Company).
Each property is immediately income producing and has been let on a new 35-year lease, with no tenant break, to a specialist Registered Provider of social housing. The Registered Provider is regulated by the Homes and Communities Agency and receives its funding for the rent payments directly from the relevant local authority.
Each lease is subject to annual upward-only rent reviews index-linked to the Consumer Prices Index (uncapped) and the Registered Provider is responsible for the costs of repair, maintenance, insurance and outgoings.
The properties in the Portfolio comprise specialist, high quality supported living homes for individuals with physical and/or mental disabilities or other care needs.
The acquisition is being funded from equity resources following the Company's second issue of shares on 12 October, with senior debt finance expected to be introduced in the near term.
Completion of the acquisition is due to occur in the next few days.
Simon Lee, Partner of LXi REIT Advisors Limited, commented:
"This supported living portfolio provides the Company with an attractive 6.0% net initial yield underpinned by unbroken 35-year, index-linked leases, with strong underlying residential values."
FOR FURTHER INFORMATION, PLEASE CONTACT:
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LXI REIT Advisors Limited John White (Partner, Fund Manager) Simon Lee (Partner, Fund Manager) |
Via Newgate Communications |
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Peel Hunt LLP Luke Simpson |
Tel: 020 7418 8900 |
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Newgate Communications (PR Adviser) James Benjamin Anna Geffert Lydia Thompson |
Tel: 020 7680 6550 Email: lxireit@newgatecomms.com |
NOTES:
The Company invests in UK commercial property assets let, or pre-let, on very long (typically 20 to 30 years to expiry or first break), inflation-linked leases to a wide range of strong tenant covenants across a diverse range of 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 a minimum annual dividend of 5 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 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.
Further information on the Company is available at www.lxireit.com
This information is provided by RNS
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