Lxi Reit Share Discussion Threads

[skyship] 10/1/2022 11:10

Yes indeed. Incidentally, buying back into UKCM today. Usually an institutional stock trading 1%-10% discount; but at the moment anomalously on a 20.6% discount; though admittedly on only a 3.43% yield. Likely to re-rate...

[bull19] 10/1/2022 10:36

Hi skyship, many thank for taking the time to reply. I'll check out the other thread. Out of interest, if you don't buy REITs at a premium, does that also mean you tend to sell them when they go from discount to premium?

[skyship] 10/1/2022 10:26

Hi bull

If new to the excellent REIT sector, then I recommend you follow the CP+ thread for discussion across most if not all the players.

Interesting to note LXI share price performance over the past year v. a number of peers. You will note that the two laggards are the two trading at a premium to their underlying NAV, ie LMP & LXI.

Personally I'll never buy a property company trading at a premium.

Propco valuations are based upon many factors: WAULT, LTV, Debt Cost, Tenant profile, Geographical split, Sector split (Office, Industrial etcetcetc) - but the two most important factors remain NAV Prem/Disc & Yield.

With the discounts closing in from the crazy levels of a year ago, the average on my 20 company spreadsheet is down to 13.4%; or 17.6% if I exclude LMP, LXI & WHR.

My current holdings are AIRE, EPIC, HCFT & SREI. My thoughts on the current Best Buy would be the minnow HCFT. They usually trade on an horrific spread; but never as outlandish as it looks, ie they are currently available at 902.5p rather than the headline 920p! IMO the 23.8% discount & 6.32% yield places them in the good value category.




free stock charts from uk.advfn.com

[bathcoup] 10/1/2022 10:12

" ... its estimated net asset value per share at December 31 was 139.5p. At September 30 the company's NAV per share was 135.5p, a 3.0% increase over three months."

I think LXI deserves a bigger premium than 4.7% (at 146p).

[bull19] 10/1/2022 08:56

Hi all, I'm new to REITs and the thing I can't get my head around is when to buy in. Obviously it makes sense to buy at a discount, but surely there would only be a discount if the outlook isn't good? I note others waiting for a better entry point so I'd be interested in your rationale. Many thanks

[speedsgh] 10/1/2022 07:28

@toffeeman - "The Company remains well positioned to provide further value to our shareholders and with 96% of the Group's contracted rents either inflation-linked or containing fixed uplifts, the Group's portfolio is well placed to deliver defensive inflation protected income returns and capital growth going forward".

[toffeeman] 09/1/2022 22:03

Ok when inflation was <1% but if it's 6%?

[janeann] 09/1/2022 16:01

Thanks speedsgh. Intesresting. Held PCTN since 2010 - first purchase 47p! and bought many more since. Ill watch LXI for a while with intention of getting in at hopefully a little less than current! Missed the primary bid offer!

[speedsgh] 09/1/2022 15:03

@janeann - Subtle differences between LXI & PCTN as you are probably aware. LXI has more of a focus on inflation-protected income.

Like yourself I have held PCTN for a long time (2011). It has provided a fantastic return (both capital & income) to date. It is one of my largest 5 holdings (5.5% weighting). LXI is a more recent addition to the portfolio (via the June 2021 placing) which I will be happy to add to on weakness.

Both PCTN & LXI are quality companies imo, although there may of course be an element of bias in that statement!

LXI investment objective

LXi REIT’s investment objective is to deliver inflation-protected income and capital growth over the medium-term for shareholders through investing in a diversified portfolio of UK property, that benefits from long-term index-linked leases with institutional-grade tenants.

[janeann] 09/1/2022 08:37

Just come across LXI - have held PCTN for years and performance/yield etc looks pretty comparable. This appears slighty more retail orientated. Any views on the merits of this over PCTN?

ps I also hold SUPR which gives good supermarket exposure

[speedsgh] 16/12/2021 14:16

Acquisition appears to Gateway Retail Park, Heath Road in Middlesbrough...

[speedsgh] 16/12/2021 13:55

Accretive £58.9M acquisition let to Sainsbury's -

The Board of LXi REIT (ticker: LXI), the specialist inflation-protected long income REIT, is pleased to announce the acquisition of a long-let property (the "Property") which has been independently valued by Knight Frank LLP at £58.9 million (the "Independent Value").

The consideration for the acquisition is being satisfied by:

· the issue of 35,715,862 new ordinary shares in the Company (the "Shares"), equating to 88% of the Independent Value, at an issue price of 145 pence per share (a 9.4% premium to the Company's ex-dividend EPRA NTA as at 30 September 2021 of 132.5p); and

· a further £7.0 million in cash, equating to 12% of the Independent Value.

The consideration represents a net initial yield of 4.9% and is expected to rise to 5.7% at the next inflation-linked rent review in 2025.

The seller, an existing long-term shareholder of the Company (Laxmi Nivaria S.L.U.), has agreed to be subject to a lock-up period restricting the disposal of the Shares for a minimum period of 12-months from the date of Admission (defined below).

The Property

The Property comprises 127,000 sq ft of built area, along with 850 car parking spaces and petrol filling station, on a substantial freehold site that extends to 16 acres. The Property is fully let to Sainsbury's Supermarkets Limited (the principal trading company of the Sainsbury's group) with 19 years unexpired to first break. The rent increases five yearly in line with RPI inflation, collared at 1% pa and capped at 4% pa.

The Property includes offerings from Argos (part of the Sainsbury's group), along with The Food Warehouse (part of the Iceland Foods group), B&M, KFC and Costa, who have sub-let the space from Sainsbury's. The Property has online connectivity through both click and collect and home delivery.

Given its size, location and nature, the Property provides good opportunities for asset management and ESG initiatives that have the potential to enhance income and capital returns through, for example, adding further drive-thru units, EV charging points and solar panelling.

The Property is located in a prominent position to the east of Middlesbrough town centre, directly adjacent to the busy A66 and accessed by an all movements junction. Middlesbrough Football Club's Riverside Stadium is situated to the north and Middlehaven, one of the north east's largest residential and office led regeneration schemes, is to the north west.

Simon Lee, Fund Manager, LXI REIT Advisers comments:

"We are pleased to acquire this well-let asset underpinned by a long, inflation-linked lease to a FTSE 100 company, with good asset management opportunities to enhance income and capital returns. The consideration predominantly takes the form of the issue of new shares in the Company at a material premium to NAV, which further enhances the accretive nature of the transaction."

[skinny] 24/11/2021 15:01

Quite a move up today with volume.

And a new ATH to boot!

[skinny] 24/11/2021 11:09

.

.

[speedsgh] 11/10/2021 07:44

Possibly not too long before they tap investors for more money...

"The Group has fully and swiftly deployed the net equity raised in both the March and July 2021 oversubscribed capital raises, at an accretive 5.23% average net initial yield. This includes investments in new structurally supported subsectors such as Life Sciences (5%) and Education (3%), both of which benefit from attractive supply and demand fundamentals, robust long-term prospects for growth in ERVs, and on an asset level, strong rent covers, long indexed-linked leases, market leading tenant operators with strong covenants, and good locations with specialist facilities.

The Group's pro-forma loan to value ("LTV") ratio at 30 September 2021 was approximately 26%, adjusting for completion of forward fundings and assets for which contracts to acquire had exchanged but not completed. As such, the Company expects to extend its low cost (1.55% margin) revolving credit facility to fund the balance of its pipeline with a view to reaching its targeted 30% LTV ratio level in the near term, with headroom to the Group's medium-term target maximum LTV ratio of 35% as well as the LTV financial covenant that is 50%."

[skinny] 11/10/2021 06:05

LXi REIT (ticker: LXI), the specialist inflation-protected long income REIT, is pleased to provide the following update ahead of the Company's half-year results to 30 September 2021, which are expected to be published in late November 2021.

Portfolio valuation

The Company's independent valuer, Knight Frank LLP, has valued the Group's property portfolio, as at 30 September 2021, at GBP1.22 billion.

This represents a +4.9% like-for-like increase over the six-month period since 31 March 2021 and a total increase of +29.7% over that period, including acquisitions and disposals.

The like-for-like movements, resulting from both yield compression and rental growth, were spread across the Company's main sub-sectors as follows: Foodstores +5%, Industrial +7%, Budget Hotels +2%, Healthcare +3%, Pubs +7%, Garden Centres +4%, Car Parks +3% and Drive-thru Coffee +2%.

Net asset value and total return

On the basis of the updated property valuation, the Board expects to announce a net asset value ("NAV") per share as at 30 September 2021, of approximately 133.5 pence, reflecting growth of approximately +6.2% over the six-month period.

Inclusive of dividends paid during the six-month period, the Company expects to deliver a total NAV return of approximately +8.6% for the half-year, significantly outperforming the Company's minimum annual total NAV return target of 8%(3) .

The Company's total NAV return from IPO in February 2017 to 30 September 2021 is expected to be 59%, equating to a 10.6% compounded annual total NAV return.

The Company's total shareholder return since IPO, assuming dividends reinvested was 70%, equating to a 12.3% compounded annual total shareholder return.

Rental growth

The Group achieved an attractive average rental growth level of 2.9% per annum on assets which were reviewed during the six-month period from 1 April 2021. (Further details on the portfolio rent review terms are set out below.)

Rent collection

The Company is pleased to report that it has collected 100% of the rent due for Q4 2021.

Portfolio statistics

The following is a high-level summary of the Company's portfolio as at 30 September 2021(2) :

-- 171 properties, 100% let or pre-let to over 70 strong tenants at sustainable levels of rent
-- 23-year weighed average unexpired lease term to first break
-- 96% of the rental income is linked directly to inflation or contains fixed uplifts: 58% RPI, 17% CPI and 21% fixed uplifts

-- All leases require full repairing and insuring by the tenants, protecting the Group from property cost leakage and capex requirements

-- Diversified across more than 10 robust property sectors as follows, with the percentages illustrating the weighting of the Group's portfolio by annual rent:


o Foodstores and essentials 20%
o Industrial 19%
o Budget Hotels 16%
o Healthcare 10%
o Car Parks 6%
o Garden Centres 5%
o Life Sciences 5%
o Drive-thru Coffee 4%
o Pubs 4%
o Education 3%
o Other 8%

Portfolio composition

The Group has fully and swiftly deployed the net equity raised in both the March and July 2021 oversubscribed capital raises, at an accretive 5.23% average net initial yield. This includes investments in new structurally supported subsectors such as Life Sciences (5%) and Education (3%), both of which benefit from attractive supply and demand fundamentals, robust long-term prospects for growth in ERVs, and on an asset level, strong rent covers, long indexed-linked leases, market leading tenant operators with strong covenants, and good locations with specialist facilities.

The Group's pro-forma loan to value ("LTV") ratio at 30 September 2021 was approximately 26%, adjusting for completion of forward fundings and assets for which contracts to acquire had exchanged but not completed. As such, the Company expects to extend its low cost (1.55% margin) revolving credit facility to fund the balance of its pipeline with a view to reaching its targeted 30% LTV ratio level in the near term, with headroom to the Group's medium-term target maximum LTV ratio of 35% as well as the LTV financial covenant that is 50%.

In order to continue to optimise the portfolio's performance, the Company has continued to sell assets when it believes this will help increase shareholder returns. During the period, the Company sold a Lidl foodstore in Somerset at a low exit yield of 3.85%, reflecting a 38% premium to acquisition cost and generating an attractive geared IRR of 26% per annum.

Outlook

The Company has established a substantial and robust long income portfolio diversified across resilient sectors and tenants, with virtually all rental income linked to inflation or containing fixed uplifts. As such, the Company expects to benefit from the current higher inflationary environment and to continue to deliver attractive income and capital returns for its shareholders.

The Company is targeting an annual dividend of 6.0 pence per ordinary share for the 12-months commencing 1 April 2021(3) , payable in equal quarterly instalments of 1.50 pence per share. This equates to a 4.5% yield on the expected NAV.

NOTES:

LXI REIT plc invests in UK commercial property assets let, or pre-let, on long-term, triple-net, inflation-linked leases to a wide range of strong tenant covenants across a diverse range of robust property sectors.

The Company aims to provide shareholders with an attractive return, in the form of quarterly income distributions and with the potential for capital and income growth from key strategies which include indexed rental uplifts, pre-let forward fundings, sale and leasebacks, and off-market, value driven acquisitions and sales.

The Company is targeting an annual dividend of 6.0 pence per ordinary share for the 12-months commencing 1 April 2021(3) and its medium-term total return target is a minimum of 8% pa.

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

The Company's LEI is: 2138008YZGXOKAXQVI45

1 The expected net asset value range is stated after deducting the dividend payable in respect of the quarter ended 30 June 2021 of 1.5 pence per share, which is expected to be paid to shareholders on or around 29 October 2021 and went ex-dividend on 30 September 2021.

2 The portfolio statistics include assets that had exchanged but not completed as at 30 September 2021.

3 These are guidance levels or targets only and not a profit forecast and there can be no assurance that they will be met.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

[spectoacc] 01/10/2021 10:35

Clear logic in LXI getting hold of the only better quality REIT out there IMO, but where's the logic for SIR? More diversification? SIR has a very, very strong management team, would they want to walk away?

[speedsgh] 01/10/2021 10:22

Reit merger may not be dead in the water -

Publicly stalled potential deal with Alton Towers owner raises governance questions for LXi Reit.

A £2.5bn tie-up between two UK real estate investment trusts (Reits) could yet be pursued, despite the board of one of the potential suitors publicly rejecting the deal.

On 9 September, FTSE 250 constituent LXi Reit (LXI) issued a brief statement to the market in which it confirmed it had held preliminary merger discussions with Aim-listed Secure Income Reit (SIR), but that it was “no longer reviewing the opportunity”.

However, the Investors’ Chronicle understands that due diligence by both sides could still resume, amid pressure from some LXi shareholders for clarity and details on the terms of a tie-up.

Though investors would not expect to have been canvassed on preliminary merger discussions, LXi’s board is yet to give any public detail on its opposition to the deal. As a result, LXi investors have been left in the dark on why it was first entertained by the investment management teams of both trusts.

The situation raises questions of LXi’s governance, and – in the view of one source – opens up a potential three-way tussle between the Reit’s shareholders, board and investment manager Alvarium, which is responsible for the group’s property portfolio and investment strategy.

The tie-up is understood to have been pitched as an all-share merger of equals, with Secure Income likely to reverse into LXi, given the latter’s premium market listing.

Two institutional investors in LXi said they intended to speak with the board to establish why talks between the two groups stalled, and what Alvarium and LXi fund managers John White and Simon Lee had initially seen in the combination.

One said there was “clear industrial logic” to a tie-up between the groups...

[skinny] 20/9/2021 06:05

Correction issued to previous post.

DIVIDEND DECLARATION

The Board of LXi REIT plc (ticker: LXI), th e specialist inflation-protected very long income REIT, is pleased to declare an interim quarterly dividend in respect of the quarter ended 30 June 2021 of 1.5 pence per ordinary share, payable on 29 October 2021 to shareholders on the register at 1 October 2021. The ex-dividend date will be 30 September 2021.

The dividend will be paid as a Property Income Distribution ("PID") in respect of the Company's tax exempt property rental business.

[speedsgh] 17/9/2021 06:14

Dividend Declaration -

The Board of LXi REIT plc (ticker: LXI), the specialist inflation-protected very long income REIT, is pleased to declare an interim quarterly dividend in respect of the quarter ended 30 June 2021 of 1.5 pence per ordinary share, payable on 29 October 2021 to shareholders on the register at 24 September 2021. The ex-dividend date will be 23 September 2021.

The dividend will be paid as a Property Income Distribution ("PID") in respect of the Company's tax exempt property rental business.

[spectoacc] 10/9/2021 07:03

Interesting. SIR's the only higher quality property IT than LXI IMO.

"LXI REIT PLC - real estate investment trust - confirms that it was involved in very preliminary discussions with Secure Income REIT PLC - property company - around a potential merger of the two businesses, but that it is no longer reviewing this opportunity. "

[speedsgh] 23/8/2021 12:55

New Edison update...

Swift and accretive capital deployment -

[speedsgh] 20/8/2021 06:23

Accretive acquisitions for £80M & Profitable sale -

The Board of LXi REIT (ticker: LXI), the specialist inflation-protected long income REIT, is pleased to announce the following acquisitions ("the Acquisitions") for a total cost of £80 million, reflecting an accretive 5.25% average net initial yield (versus a current portfolio value of 4.7%), which benefit from a long weighted average unexpired lease term to first break of 23 years, high-quality tenants, robust sectors and inflation-linked rental uplifts, following the Company's £100 million placing in July this year ("the Placing").

The Company is also in solicitors' hands on a range of pre-let forward fundings and sale and leasebacks, which will deploy the balance of the net equity proceeds of the Placing [cont'd]...