LXi REIT has acquired seven separate long income acquisitions in the grocery sector from six different developers/vendors, following the Company's £125 million capital raise on 11 March 2021.
The Acquisitions are for a total cost of £85 million and comprise both pre-let forward fundings and built investments, secured to strong tenant covenants in the structurally supported grocery sector. They benefit from an accretive average net initial yield of 5.25% (net of acquisition costs), a long average unexpired lease term to first break of 19 years, are let on sustainable, low rents and 100% of the income is inflation-linked via contractual rental uplifts.
The Acquisitions represent approximately 70% of the net proceeds of the recent capital raise, demonstrating the Company's ability to execute on identified investment opportunities efficiently and in short order. The Company has a number of other assets in solicitors' hands which would fully deploy the balance of the proceeds of the capital raise and further announcements are expected to be made shortly in that regard.
Simon Lee, Partner, LXI REIT Advisors commented: "Our focus on smaller lot-sized forward fundings and relationship driven deals with developers and tenants has ensured attractive entry pricing for these assets, despite them being in a much sought-after sector where the investment market is becoming increasingly competitive. We continue to believe that right-sized, well positioned grocery real estate assets let on sustainable rents to financially robust tenants, who are benefitting from flexible and proven operating models, and offering us as landlords very long, index linked, lease terms, remain attractive investments. Following these acquisitions, foodstores will be our largest sector exposure representing approximately 25% of our portfolio by value."