Lxi Reit Share Discussion Threads

[nickrl] 20/9/2022 22:40

speedsgh you would have thought SUPR would have wanted a piece of this

[speedsgh] 20/9/2022 22:17

Sainsbury's in talks to offload £500m store portfolio to LXi REIT - https://news.sky.com/story/sainsburys-in-talks-to-offload-500m-store-portfolio-to-lxi-reit-12702225LXi REIT, a commercial property investor which is part of the FTSE-250 index, is expected to raise equity to fund the purchase of nearly 20 Sainsbury's freeholds, Sky News learns...

[peckers56] 05/9/2022 21:06

Attended today's AGM. Raised the issue whereby some Secure Income shareholders had problems converting to Cash AND LXI shares, i.e. got ALL cash. Was told that, after an investigation, it was determined it was YOUR platform's fault for not explaining CLEARLY enough how to request this option, i.e YOU "inadvertently" pressed the wrong button(s) !!!!!

[spectoacc] 09/8/2022 13:51

Apologies, sold all my SIR after speaking with management & concluding they didn't have the first clue about inflation. Sold too soon.

Might be worth messaging all recent posters on the SIR board?

[income investor] 09/8/2022 13:43

Can I ask if there are any other former Secure Income holders on this site who opted for the basic entitlement under the Partial Cash Alternative? Those of us who held shares through Interactive Investor platform ended up with all cash and no LXI shares - I suspect this did not happen at any other platform provider eg AJ Bell, Hargreaves Lansdown etc , but would be good to get confirmation of this to try to persuade Interactive Investor to change their stance!

[cyfran101] 04/8/2022 19:44

Well I had exactly the same circumstances and have merely sent an e-mail to ask if this was an error. Thought I made an error myself at first but no I did request shares/cash (option 2)!

Up to 7 days before I get an answer and hoping they have changed their mind for us all.

Thought they were saying option 3 all cash was unlikely so very bizarre that is what actually happened.

Good luck with your complaint, I think I might be with you complaining and likely to get some payback for the error.

[income investor] 04/8/2022 15:30

Is anyone else a former Secure Income shareholder who held through the Interactive Investor platform and elected for the Partial Cash Alternative? As someone who simply opted for the basic entitlement under the Partial Cash Alternative, I should have received some LXI Shares and some cash. Interactive Investor are trying to claim that this option has been paid out fully in cash instead, even though this is not permitted under the terms of the offer document! I have raised a formal complaint with Interactive Investor and will see what joy that gives! I suspect Interactive Investor made the wrong election to the Registrars!!

[speedsgh] 21/6/2022 11:40

Some comment from LXI on the trust's [partially] inflation-protected rents and ESG strategy with respect to EPCs in this AIC article...



On inflation-protected rents:

Simon Lee, Fund Manager of LXi REIT, said: “Our income stream is protected against inflation with 96% of contracted rents containing upward-only index-linked rent reviews or fixed uplifts. We gear our returns with conservative levels of fixed or capped debt, and our debt book has a weighted average fixed cost of 2.9%.

“89% of our rents are capped or have fixed uplifts, with an average cap of 4% per annum. Capped rental uplifts are a necessary conservative measure to avoid rents growing too out of kilter with open market rents on equivalent properties and eroding operator profits.

“76% of contracted rent reviews contain either a collared or fixed uplift, averaging 2.0% per annum, which is an effective income growth hedge in a lower inflationary environment.

“Generally, over the life of the group’s leases, which average 21 years to first break and are regularly recycled, we expect inflation to average within our cap and collar and therefore our leases to be effective inflation hedges.”...

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strategy with respect to EPCs:

Simon Lee, Fund Manager of LXi REIT, said: “In terms of portfolio and investment strategy, our minimum criteria is that we will no longer acquire an asset with an EPC rating of below a C, and we will not forward fund an asset with a target EPC rating below a B. Where a built asset is expected to be a C or lower, we will obtain a decarbonisation report as part of our due diligence process and put in place a short-term plan to improve the asset rating. We have also commissioned decarbonisation reports and initiatives on all assets with a rating C or lower that are more than 0.5% of the portfolio by value.”

“These improvements in strategy have meant that assets with EPC ratings C or above have increased in the year to 85%, and 99% of the assets that the group has forward funded to date achieving an EPC rating or A or B. This shows how positively forward funding contributes to the environmental quality of the assets.”...

[nickrl] 13/5/2022 14:49

The acquisition facility can be extended by six months twice if they need to although given direction of interest rates may be back down in 12mths time may end up with a lower long term rate.

[elbrus55] 13/5/2022 05:44

Yes, SIR is AIM listed so a lot of institutions and funds would not have held it. When it is merged into LXI they will likely want to up their holdings in view of the new higher market cap.Also note they are short-term borrowing up to £385m to pay the cash part of the offer. They will subsequently need to finance this by issuing more equity or getting longer-term loans (or else by selling some properties).

[bondholder] 12/5/2022 15:10

I think the bigger picture here is that given the scale of the new company and the predictable long term index linked returns it will generate a lot of institutional investor demand which will drive up the share price from current levels.

[elbrus55] 12/5/2022 03:51

The SIR shareholders appear to do best out of the merger as they will benefit from much lower management/performance fees as part of LXI. Currently they suffer high fees.Assuming the merger will proceed, the share prices needed to move to match value of the offer to SIR. This equates to 118.88p in cash, 2.488 LXI shares adjusting down for the upcoming LXI divi which they wont get. Otherwise there would be an arbitrage opportunity. I checked this and it matches within 0.5% based on Wed closing prices.LXI shareholders are supposed to benefit in the long-term from lower fees and diluted other expenses. The management fee goes down to 0.55%pa on the part above 2 billion.

[skyracer] 11/5/2022 09:05

Something wrong with the merger pricing. SIR soars, LXI wilts.

[melody9999] 04/5/2022 21:20

OOps - any reason for the sudden share price move south?

[jg231] 23/3/2022 16:35

Looks like most of the fast money on the raise has now left the building. Should be room for plenty of upside from here given the 5% increase in dividend for the current financial year.

[jg231] 23/3/2022 16:35

Looks like most of the fast money on the raise has now left the building. Should be room for plenty of upside from here given the 5% increase in dividend for the current financial year.

[speedsgh] 23/3/2022 13:22

Decent recovery in recent days.

New Edison update...

Strong accretive growth continuing -

[skinny] 03/3/2022 07:05

ACCRETIVE ACQUISITIONS TOTALLING GBP73 MILLION AT 5.4% NIY

EQUITY DEPLOYED

PORTFOLIO UPDATE

The Board of LXi REIT plc (ticker: LXI), th e specialist inflation-protected long income REIT, is pleased to announce GBP73 million of new investments, funded by its recent GBP250 million equity capital raise (the "Capital Raise").

The acquisitions, which have been transacted on an off-market basis, reflect an accretive 5.4% net initial yield (net of purchase costs), versus the current portfolio valuation yield of 4.5%. The assets benefit from strong tenant covenants on long-term, fixed uplift leases and are underpinned by affordable rents.

The Company has now fully deployed the net proceeds of the GBP250 million Capital Raise, which closed on 9 February 2022, and is in solicitors' hands on a range of further assets to be funded through the Company's debt facilities.

Asda foodstore

The Company has acquired a 73,000 sq ft foodstore in Halesowen, Birmingham. The property is fully let to Asda Stores Limited (the principal group company) on a long lease with 22 years unexpired to first break and benefits from five yearly rental uplifts at a fixed growth rate of 3% per annum compounded.

The dominant store, which includes 600 parking spaces and was built in 2008, trades strongly and benefits from a significant catchment population of 1.1 million residents within a 20-minute drive time.

Asda is the UK's third largest grocer, operating 600 stores and serving 18 million customers a week.

Compass training facility

Following its acquisition of the Compass Milton Keynes site announced on 14 February 2022, the Company has acquired a second Compass training and conference facility extending to 127,000 sq ft, on a substantial 18.5 acre site, in Stone, Staffordshire.

The property is again fully let to Compass Group Holdings plc, a FTSE 100 constituent, with a market cap of approximately GBP30 billion, on a long lease with 17 years unexpired to first break. The current rent equates to a low GBP12 per sq ft and reviews annually with a fixed uplift of 2.5% per annum compounded.

The property is well located and is underpinned by a strong residual and alternative use value, including for potential residential use, with the property surrounded by recently developed, modern housing.

Portfolio update

Following the full deployment of the proceeds of the GBP250 million capital raise, the portfolio is now positioned as follows:

-- 191 properties which are 100% let or pre-let on long-term, triple-net leases to 70 strong tenants, with a long WAULT to first break of 22 years;

-- 96% of the rental income is either inflation-linked (74%) or contains fixed uplifts (22%);
-- The Company's sub-sector weightings are: Foodstores and essentials (25%), Industrial and logistics (17%), Budget hotels (13%), Healthcare (8%), Car parks (5%), Life sciences (4%), Drive-thru coffee (4%), Garden centres (4%), Pubs (3%), Education (2%) and Other (15%).

[speedsgh] 24/2/2022 14:57

Accretive forward funding £26M acquisitions -

The Board of LXi REIT plc (ticker: LXI), th e specialist inflation-protected long income REIT, is pleased to announce the following forward funding acquisitions, funded by its recent £250 million equity capital raise (the "Capital Raise").

The acquisitions total £26 million and reflect an accretive 5% net initial yield (net of purchase costs), versus the current portfolio valuation yield of 4.5%. The assets are secured to strong tenant covenants on long-term, index-linked and fixed uplift leases and are underpinned by affordable rents with strong ESG credentials.

For each of these forward funding acquisitions, full planning consent is in place, the Agreements for Lease have been exchanged and the properties are being funded on a fixed price basis. The Company will receive a cash-backed income from the developers during the construction periods in line with the purchase yields.

The Company has now deployed £170 million since the Capital Raise, which closed on 9 February 2022, and is in solicitors' hands on a range of further assets which will deploy the balance of the proceeds in short order.

Tesco and Home Bargains forward funding

The Company has acquired, by means of a pre-let forward funding transaction, a 45,000 sq ft Tesco foodstore (75% of the total value) and a 22,000 sq ft Home Bargains (25% of the total value) in Houghton le Spring. The property will include 329 car parking spaces, as well as electric vehicle charging points, and comprises a large, nine-acre site.

The foodstore has been fully pre-let to Tesco Stores Limited (the principal UK trading company of the Tesco group) on an unbroken 20-year lease. The starting rent reflects a low rent per sq ft and increases five yearly in line with CPI inflation.

The Home Bargains store has been fully pre-let to TJ Morris Ltd (the principal group company) on an unbroken 15-year lease. The starting rent reflects a low rent per sq ft and increases five yearly upwards only in line with open market value.

Tesco is a FTSE 100 constituent with a market cap of approximately £22 billion. Home Bargains is a leading discount retailer, operating over 500 stores and with net assets of £1.3 billion.

Co-op foodstore forward funding

The Company has acquired, through a pre-let forward funding transaction, a convenience store in Horncastle. The property benefits from a new, 25-year lease to Co-Operative Food Group Limited (with a one-off break right at year 15), with fixed rental uplifts of 2.5% per annum compounded every five years.

The property occupies a strategic location with direct access to key arterial road routes. The Co-operative Group, which was established in 1844, now operates 4,500 outlets and has an annual turnover of £11.5 billion.

[riverman77] 21/2/2022 10:07

Quite agree, LXI would only work in a modest inflation environment. If CPI is consistently over 4% then they'd suffer given they're tied in to 20y leases. Also not keen on their increasingly large exposure to Cazoo - I have some reservations over their business model.

[spectoacc] 21/2/2022 07:28

Off-market is good, accretive 5.25% is good, but I'm fast going off LXI - a 3% and 4% cap. Can understand those being done a few years ago, when people still believed in the BoE's 2% target, but now? CPI will top 7% this year, RPI may even hit double figures. Will it last - who knows - but going a lot higher if Russia kicks off, & far too much debt around for interest rates ever to return to the levels that may be needed.

Some always said the way out of our Financial Crisis/now Covid debt was to inflate it away..

LXI evidently think Cazoo's here to stay.

[skinny] 21/2/2022 07:11

ACCRETIVE ACQUISITIONS TOTALLING GBP57 MILLION AT 5.25% NIY

The Board of LXi REIT plc (ticker: LXI), th e specialist inflation-protected long income REIT, is pleased to announce the following acquisitions, funded by its recent GBP250 million equity capital raise (the "Capital Raise").

The acquisitions, which have been transacted on an off-market basis, total GBP57 million and reflect an accretive 5.25% net initial yield (net of purchase costs), versus the current portfolio valuation yield of 4.5%. The assets are secured to strong tenant covenants on long-term, index-linked leases and are underpinned by affordable rents.

The Company has now deployed GBP144 million since the Capital Raise which closed on 9 February. The Company is in solicitors' hands on a range of additional assets and further announcements are expected to be made shortly.

BT forward funding

The Company has acquired, by means of a pre-let forward funding, a 77,000 sq ft office in Dundee.

The property has been fully pre-let to BT Group plc on a new, unbroken 17.5 year lease, with five yearly CPI inflation linked rental uplifts, capped at 3% per annum and collared at 1% per annum compounded.

The property, which will house BT's critical infrastructure to handle emergency 999 telephone calls, will be built to a BREEAM Excellent standard, with an EPC target rating of A, and the development will include rooftop solar and EV charging points.

BT Group plc is a FTSE 100 constituent with a market cap of approximately GBP19 billion.

Full planning consent is in place, the Agreement for Lease has been exchanged and the property is being funded on a fixed price basis. The Company will receive a cash-backed income from the developer during the construction period in line with the purchase yield.

Cazoo sale and leaseback portfolio

The Company has acquired five customer service, car storage and repair and maintenance facilities in Chertsey, Northampton, Newcastle, Carlisle and Cardiff, by means of a sale and leaseback with Cazoo.

Each property is fully let to Cazoo Limited on a new, unbroken 20-year lease with five yearly CPI linked rental uplifts, capped at 4% per annum and collared at 2% per annum compounded.

Cazoo is a leading online car retailer, listed on the NYSE, with a market cap of approximately $3.4 billion.

[williamcooper104] 17/2/2022 18:42

SUPRs average cap is 4 percent, so a little better I think some of the social housing REITs have uncapped, but they've admitted that they may not be able to get their tenants to actually pay full RPI A long leased supermarket is 4.5 with 4 - so it's a c12 year duration Whereas as a long leased shed is 3.5 with 3 caps, or 16-17 years duration