London based real estate investment trust makes nine acquisitions totalling £87m

LXi REIT PLC, the specialist long income REIT, has announced that it has made nine property acquisitions, funded by its recent £250m equity capital raise.

The acquisitions, which have been transacted predominantly on an off-market basis with seven different vendors and developers, total £87m and reflect an accretive 5.1 per cent net initial yield, versus the current portfolio valuation yield of 4.5 per cent. Some of the highlights among these nine acquisitions are as follows.

Firstly, the company has acquired three convenience stores in Norwich, Aston, and Washington. Each benefited from new, unbroken 20-year leases to Co-operative Food Group Limited, with fixed rental uplifts of 2.5 per cent per annum compounded every five years.

The properties occupy strategic locations with direct access to key arterial routes and motorways as well as strong catchment areas. They each have a strong trading history and have recently been refurbished to Co-op’s latest trading format.

The Co-operative Group, which was established in 1844, now operates 2,500 food stores across the UK and has an annual turnover of £11.5bn.

Additionally, the company has acquired a premium health and racquets club, extending to 100,000 sq ft and with 333 parking spaces. Facilities include an aerobics studio, fully equipped gym, indoor heated pool, sauna, steam room, spinning rooms, 4 badminton courts, 7 indoor and 3 outdoor tennis courts, 6 treatment rooms, and hair salon.

A statement issued on behalf of LXi said: “The property trades strongly, with a robust rent cover of 2.2X, and is well located in Hamilton, a popular commuter town serving Glasgow. David Lloyd is one of Europe’s leading health, sport and leisure groups, operating 122 clubs.”

Finally, the company has acquired a 44 bedroom Premier Inn budget hotel in Exeter. The property is fully let to Whitbread Group plc, parent company of Premier Inn, on a long lease with 16 years unexpired to first break. The rent reviews five yearly in line with CPI inflation, capped at 4 per cent per annum compounded.

The statement added: “The property trades strongly, with a robust 2.4X rent cover, and is well located with a strong residual and alternative use value. Whitbread is a FTSE 100 constituent with a market cap of approximately £6bn.”

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