Exchange of contracts on Sainsbury's portfolio
22 September 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EC NO. 596/2014) AS IT FORMS PART OF THE DOMESTIC LAW OF THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (AS AMENDED) (THE "UK MARKET ABUSE REGULATION")
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, NEW ZEALAND, CANADA, SINGAPORE, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY MEMBER STATE OF THE EEA (OTHER THAN ANY MEMBER STATE OF THE EEA WHERE THE COMPANY'S SECURITIES MAY BE LEGALLY MARKETED), OR ANY OTHER JURISDICTION WHERE SUCH DISTRIBUTION IS UNLAWFUL, OR TO ANY NATIONAL, RESIDENT OR CITIZEN OF AUSTRALIA, NEW ZEALAND, CANADA, SINGAPORE, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY MEMBER STATE OF THE EEA (OTHER THAN ANY MEMBER STATE OF THE EEA WHERE THE COMPANY'S SECURITIES MAY BE LEGALLY MARKETED)
LXi REIT plc
(the "Company" or "LXi REIT")
Exchange of contracts on Sainsbury's portfolio
Further to its announcement of 21 September 2022, the Board of LXi REIT (ticker: LXI), the specialist inflation-protected very long income REIT, is pleased to confirm that the Company has now exchanged contracts to acquire from Sainsbury's, on a sale and leaseback basis, a portfolio of 18 prime grocery store assets predominantly located in Southern England and to be let to Sainsbury's Supermarkets Limited (the "Target Portfolio").
The purchase price of £500 million equates to a net initial acquisition yield of 5.0 per cent., which is accretive to the Company's portfolio yield of 4.7 per cent.
The Target Portfolio benefits from defensive characteristics including strong trading performance, low and sustainable rents (averaging £17.25 per sq ft), new 15-year lease terms, five yearly upward only CPI inflation-linked rent reviews (capped at 4 per cent. per annum compounded) and attractive 'green' lease provisions. The Target Portfolio comprises modern buildings all with strong ESG credentials including A or B EPC ratings, on large plots with low site cover, and providing omni-channel sales optionality.
The Target Portfolio has a robust tenant covenant being 100 per cent. let to Sainsbury's Supermarkets Limited, the main trading company of J Sainsbury plc. Sainsbury's is the UK's second largest grocery retailer, with 14.6 per cent. market share and a market cap of £4.6 billion.
Completion of the acquisition is conditional upon the Company raising the necessary equity funding, for which the Company is currently in discussions with investors. The balance of the purchase price will be funded via a debt facility, which is anticipated to be drawn at an accretive and attractive, low all-in maximum rate of 1.5 per cent. per annum and otherwise on terms in-line with the Company's borrowing policy.
FOR FURTHER INFORMATION, PLEASE CONTACT:
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LXI REIT Advisors Limited Simon Lee (Partner, Fund Manager) John White (Partner, Fund Manager) Freddie Brooks (CFO) |
Via H/Advisors Maitland |
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Peel Hunt LLP Luke Simpson / Liz Yong / Huw Jeremy |
020 7418 8900 |
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J efferies International Tom Yeadon / Ed Matthews / Rishi Bhuchar |
020 7029 8000 |
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Alvarium Securities Limited Mark Thompson / Eddie Nissen / Oliver Kenyon |
020 7016 6700 |
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H/Advisors Maitland (Communications Adviser) James Benjamin |
07747 113 930 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 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 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 a dividend of 6.3 pence per ordinary share for the year which commenced on 1 April 2022*.
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 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, EPRA/NAREIT, MSCI and STOXX Europe 600 indices.
Further information on the Company is available at www.lxireit.com
* This is a target and not profit forecast.
Important Information
This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.
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