TIDMLXI
RNS Number : 8332M
LXI REIT PLC
26 January 2021
26 January 2021
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014. This
announcement has been authorised for release by the Board of
Directors.
LXi REIT plc
(the "Company" or the "Group")
TRADING UPDATE
The Company is pleased to provide a trading update for the
quarter ended 31 December 2020.
Portfolio update
The Group's portfolio has been valued by its independent valuer
as at 31 December 2020 at GBP907.25 million, reflecting a 1.7%
like-for-like increase on the 30 September 2020 valuation.
The key drivers behind this increase are the continued
outperformance of two of the sectors where the Group has some of
its largest exposures, industrial and foodstores, which are
benefitting from attractive supply and demand fundamentals and a
strong investment market, as well as the effect of the embedded
income growth within the portfolio. The portfolio has an average
EPRA NIY of 5.0% which reflects a small amount of yield compression
in industrials and foodstores, with the yield remaining stable in
the Group's other sectors.
The Company's portfolio comprises 125 properties let or pre-let
to over 50 institutional quality tenants on long, index-linked
leases with over 21 years unexpired to first break on a weighted
average basis. The portfolio is 100% let on full repairing and
insuring, triple-net leases.
96% of the Company's rental income is either index-linked or
contains fixed uplifts. The index-linked reviews are predominantly
RPI-based. During the quarter, the Company completed 28 rent
reviews (representing 14% of the portfolio rent roll) with a
weighted average uplift of 2.1% pa. The average increase
outperformed both RPI and CPI inflation over the period and
reflects the benefit of the collared and fixed rental uplifts which
are contained in 72% of the portfolio's rent reviews (by rental
value).
The Company's portfolio remains focused on structurally
supported sectors, including industrial (21%), budget hotels (21%),
foodstores and essentials (20%), healthcare (13%), car parks (8%)
and drive-thru coffee (4%).
The Group remains prudently geared at 30% LTV, with long-term
loans averaging 13 years to expiry at an average fixed rate of
2.84% pa.
Net asset value ("NAV") and net tangible assets ("NTA")
The updated portfolio valuation results in an estimated
unaudited EPRA net tangible assets ("NTA") and IFRS NAV of 123.2
pence per share, as at 31 December 2020. This represents an
increase of 2% over the quarter with the Group's quarterly total
return, comprising growth in the EPRA NTA and dividends paid, being
3.1%.
The growth in NAV reflects the like-for-like portfolio valuation
increase and the value achieved through redeployment of the capital
proceeds generated from disposals, invested into 'off-market' asset
acquisitions and forward fundings.
Disposals, acquisitions and investment pipeline
During the quarter, the Company sold its BCA Facility in Corby
for GBP68 million, reflecting a low 4.45% exit yield and
crystallising a 14% geared IRR following its pro-active re-gear of
the occupational lease to 25 years. The Company reinvested the sale
proceeds at a materially higher average net initial yield of 5.7%
across 13 assets let on long, index-linked leases to grocery
tenants, including Aldi, Lidl, Waitrose and the Co-op.
The new assets, acquired through both pre-let forward funding
and built asset structures, reflect the Company's current focus on
smaller lot-sized foodstores (10,000 sq ft to 30,000 sq ft) with
online connectivity through home delivery/click and collect and
low, sustainable rents (averaging GBP14 per sq ft).
In addition, the Company, alongside its tenant partners, has
been rolling out both electric vehicle charging and solar panelling
initiatives across many of its sites.
The Company continues to see interesting investment
opportunities in long, index-linked assets in structurally
supported sectors and believes material value can still be
generated in these sectors, especially when targeting pre-let
forward fundings in smaller lot sizes.
Simon Lee, Co-Manager of LXI REIT plc, commented:
"Whilst these remain challenging times, the Company's
diversified long income portfolio continues to perform strongly
with robust ongoing rent collection and further growth in the
underlying valuations and rents during the quarter. We continue to
see some exciting investment opportunities in the market, in
particular through pre-let forward fundings, as demonstrated by our
acquiring GBP61 million of right-sized and attractively priced
foodstores in November."
FOR FURTHER INFORMATION, PLEASE CONTACT:
LXI REIT Advisors Limited Via Maitland/AMO
Simon Lee (Partner, Fund Manager)
John White (Partner, Fund Manager)
Peel Hunt LLP
Luke Simpson/Liz Yong 020 7418 8900
---------------------------------
J efferies International
Ed Matthews/Tom Yeadon 020 7029 8000
---------------------------------
Maitland/AMO (Communications Adviser) 07747 113 930
James Benjamin 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 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 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 quarterly dividend of 1.46 pence per
ordinary share for the quarter which commenced on 1 January
2021*.
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.
The Company is a constituent of the FTSE 250, FTSE EPRA/NAREIT
and MSCI indices.
Further information on the Company is available at
www.lxireit.com
* These are guidance levels or targets only and not a profit
forecast and there can be no assurance that they will be met.
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END
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