LXi REIT plc makes acquisitions for a combined investment of £55m, including three Travelodge and Premier Inn sites
02 September 2019
The Board of Directors of LXi REIT, the specialist inflation-protected long income REIT, has announced five long-let, index-linked acquisitions - including three hotel sites - for a combined total investment of approximately £55 million, reflecting a weighted average net initial acquisition yield of 5.70%.These Acquisitions are being funded by the Company's new Revolving Credit Facility, announced on 22 July 2019. The Company is in legals on a number of additional acquisitions and further announcements are expected to be made shortly.
The Company is not developing the below four forward funding investments or assuming development risk and is forward funding each property on a fixed price basis. The Company will receive an income from the developers during the construction periods.
Travelodge hotel forward funding, Kent
The Company has acquired, by way of a pre-let forward funding, a new 75-bedroom Travelodge hotel in Sandwich, Kent.
The hotel has been pre-let on a new, unbroken 25-year lease from completion of the building works to Travelodge Hotels Limited, the principal trading company of the Travelodge group, with five yearly rent reviews index-linked to the Consumer Prices Index.
Premier Inn hotel forward funding, Essex
The Company has acquired, by way of a pre-let forward funding, a new 70-bedroom Premier Inn hotel in Saffron Walden, Essex.
The hotel has been pre-let to Premier Inn Hotels Limited on a new 25-year lease (with a tenant break right at year 20) from completion of the building works, with five yearly rental uplifts in line with the Consumer Prices Index.
Premier Inn hotel forward funding, Nottinghamshire
The Company has also acquired, by way of a pre-let forward funding, a new 82-bedroom Premier Inn hotel in Worksop, Nottinghamshire.
The hotel has been pre-let to Premier Inn Hotels Limited on a new 25-year lease (with a tenant break right at year 20) from completion of the building works, with five yearly rental uplifts in line with the Consumer Prices Index.
The other two sites are an Aldi foodstore forward funding in Northumberland and industrial warehouse facility in Durham.
Commenting on today's announcement, Simon Lee, partner of LXI REIT Advisors Limited, said: "We are pleased to be acquiring, predominantly on a forward funding basis, these attractively-priced assets let on long leases to strong tenant covenants across robust sectors, which are expected to provide further diversified, secure and inflation-linked income and capital growth potential. The attractive entry yields provide a substantial spread to both the Company's latest portfolio valuation yield and the low cost of our new revolving credit facility which is funding these acquisitions."
