Lxi Reit Share Discussion Threads

[nickrl] 04/12/2022 17:44

They paid LXi REIT Advisors Limited 6.2m in H1 so your 16m is probably right in the enlarged group. Not the only REIT where the advisors have much to do but id be more interested in how the various refinancing goes as big loans due in 2023 (184m earliest Apr 23) and 2024 (385m).

[tradez4dayz] 04/12/2022 17:00

It's got the lowest Total expense ratio in the market. Lxi are also one of the more dynamic reits out there with m&a activity, income strip etc. I think they do a lot more than just collect the rent.

[spectoacc] 04/12/2022 15:24

LXI have the same manager as HOME, find that rather perturbing (HOME bordering on a fiasco).

Struggling to see any way in which LXI could be "dodgy" tho.

Edit:
"Annual fees paid to the Investment Advisor are highly competitive: annual fee of 0.75% on market capitalisation up to or equal to £500 million, 0.65% on market capitalisation from above £500 million to £2 billion, and 0.55% on market capitalisation from above £2 billion"

Who knows, maybe that is "..Highly competitive.", but it seems scandalous to me. There's little in the way of "management" to do on 25 year, vaguely inflation-related, but certainly not frequently renegotiated leases.

Putting the portfolio together? Fighting Travelodge? Sure. But keeping it ticking along, which is surely what the majority is about? £2.6bn of long-lease property, an average of say 0.63% pa, every year, is £16m a year in fees I reckon.

Correct me if I'm wrong, there's a lot of noughts involved. £1.6m would be far more reasonable. That's every single year, year in, year out.

Incidentally, HL say 0.75% AMC, ongoing charge 1.92%, but they're often wrong and no idea how they arrive at that OC.

I wouldn't say no to £16m pa (plus other costs) for collecting rent from Alton Towers & supermarkets.

[skinny] 15/11/2022 07:03

LXI REIT (ticker: LXI), the specialist inflation-protected very long income REIT, will announce its half year results for the six months ended 30 September 2022 on Thursday, 24 November 2022.

A Company presentation for investors and analysts will take place via a live webcast and conference call at 9.00am UK on the day.

To access the live webcast, please register in advance here:



To register for the live conference call, please use this link to receive unique dial-in details:



The recording of the webcast presentation and slides will be available later in the day via the Company website: www.lxireit.com/results-centre

[williamcooper104] 18/10/2022 22:20

Sounds like they've bought caps - which implies that given where rates are/are going to then that 4.2 is their likely rate Didn't they do a rent strip funding deal - eg selling off part of the income on Alton Towers, that's debtIf the 4.2 is for long term debt with minimal refi risk then it's not so bad - there's plenty of REITs with super cheap 2 something debt that if rates/spread don't come in us going to 7 something in a few years time Don't hold LXI but given general sell off starting to have another look at it

[spectoacc] 18/10/2022 14:30

Directors had massive stakes in SIR too, I think it's what makes them so blind.

In what macro situation is LXI a buy? I guess if inflation moderates but gets stuck around 3-4% (possible), if recession isn't bad (unlikely), if the risk-free rate on Gilts stays down (no return to ZIRP, but at least possible).

Doesn't look expensive here, but there's a heck of a lot of Opportunity Cost out there. And they need to find an alternative business plan than "issue more shares/buy more assets".

Be interested to hear from any shareholders who can answer my debt questions from two posts above. If you can't, you shouldn't be long :)

[speedsgh] 18/10/2022 14:24

Sizeable purchase yday by Simon Lee, a Partner/Fund Manager of LXI's Investment Advisor.

Bought 207,989 shares at 118.9p = £247k

[spectoacc] 10/10/2022 09:05

"98% of the rent is inflation-protected or contains fixed uplifts."


Where to begin. "Inflation-protected" it isn't, when inflation is c.10% & uplifts capped at 3% or 4%.

How much of that 98% has "fixed uplifts", and what level are they set at? I thought the vast majority was (fake) index-linked, so why not state the split.


"The attraction of long inflation-linked income is further evidenced by the fact that the 20-year index-linked gilt rate remains low at 0.63%, which provides a significant spread to the Company's current portfolio yield."

But but but. Linkers are inflation-linked, it's why they're so expensive. LXI's rents aren't - or at least, I'm unaware they've any uncapped uplifts left?


There's a lot to like at LXI, but frankly, not sure I trust them. They're not likely to be growing in size now they're trading well below NAV, & borrowing is expensive. They've recession risks with various tenants, albeit they'd likely be the last to be affected (but certainly were with Travelodge, during Covid). They've sorted out their debt, which is excellent, but 4.2% seems very high for what are meant to be rock-solid, quarter-century leases. Several small REITs with much smaller and less secure tenants are paying below 2%.

I think the NAV will eventually catch up (down) the share price. There's a price I'd buy LXI at, but I strongly dislike the presentation.


Edit - I may have misinterpreted the debt position:

"As at 30 September, the Company's pro-forma LTV was 33%. 100% of the Company's debt cost is fixed or capped, with a maximum weighted average cost of debt of 4.2% per annum."


That doesn't say average cost of debt is 4.2%, it says maximum weighted average - what does that mean? That as interest rates rise, the most they'll pay is 4.2% on average? For how long? At what interest rate level? What are they paying now?

Why is there no mention of duration, or have I missed it?

[speedsgh] 10/10/2022 08:49

~ Collected 100% of rents due in H1
~ 97 index linked rent reviews resulting in average annualised rental growth of 3.7% on rents reviewed
~ LfL rental growth £4.8m; total annual rent £201.2m
~ LTV 33% at 30/9/22; 100% of debt cost is fixed or capped; maximum weighted average cost of debt 4.2% p.a.
~ Portfolio valued at £3.65bn at 30/9/22; LfL valuation change in H1 of -1.4%
~ EPRA NTA at 30/9/22 expected to be not less than 139p/share (31/3/22: 142.6p)
~ Interims to be released Thurs 24 Nov

Trading Update and Notice of Half Year Results -

[nickrl] 27/9/2022 20:28

SBRY give nothing away in their RNS's as to whether they've made a few quid on the side and despite they were using the proceeds to fund the buyback of the JV from SUPR they say thats still going ahead.

[spectoacc] 26/9/2022 13:34

Very good point @speedsgh - something shareholders are in the dark about (but presumably not those shareholders whom they've been freely discussing it all with).

[speedsgh] 26/9/2022 13:31

@gstarkey - I believe they were forced to make their initial statement due to a leak to the press. However, what I understand less is why they proceeded to exchange of contracts without first tying down funding for the deal. By exchanging contracts they would have presumably become liable for paying some form of fees/compensation for not proceeding to completion? Of course, it all depends on what was written in the exchange contract.

[gstarkey] 26/9/2022 12:49

Astonishing this proposed deal wasn't run past their major shareholders BEFORE going public. Board would have realised it was a non-starter and the deal would have been pulled sooner and we would have been none the wiser. This way the Board has egg on its face and has probably racked up substantial advisor fees in an abortive process. Paying for whoever advised them not to consult their major shareholders first will annoy shareholders further.

[spectoacc] 26/9/2022 08:56

Infuriates me when a Board claims to have discussed "...With its shareholders" when I can almost guarantee not a single one of the large number of private shareholders have had any input. SIR were as bad, before the merger, and plenty of co's besides (SGEM particularly heinous - they took 3 months to respond to an email, by which time the co was in wind-down).

LXI's expansion period is over IMO. Hardly alone in that, but dressing it up as due to "stock market volatility" and saying shareholders are all supportive is clearly false. If they're all so supportive, why has it been sold down 16p?

The world has moved on from low yields, as all us small REIT holders know to our cost.

[nickrl] 26/9/2022 08:47

Thats to the point but basically the major shareholders have told them they won't be participating in share raise at that price i guess.

[spectoacc] 26/9/2022 07:19

So - a question for LXI shareholders. Did you partake in the "..Detailed and supportive discussions.." ?


"Following its announcement on 22 September 2022 and detailed and supportive discussions with its shareholders, the Company has notified Sainsbury's of its decision not to proceed further with the portfolio purchase or equity funding given the current stock market volatility."

[spectoacc] 23/9/2022 09:05

Wonder if some major s/holders have hedged their bets by selling down? In which case, they still get it away. Not particularly good business but then again - it's not their money.

[melody9999] 23/9/2022 08:58

Agreed Spec - but if they had cleared it, why would the share price fall back? Would have thought the placing price would have provided support?

[spectoacc] 23/9/2022 08:52

Seemed a bit much trying to be raising cash at a premium to NAV in this market. You'd think they'd have cleared it with major shareholders first tho.

[melody9999] 23/9/2022 08:43

They won't get the Sainsbury placing away at the current share price will they?

In which case the deal does not go ahead. Given the share price action since the deal was announced, that may be a positive?

[jg231] 21/9/2022 11:48

SUPR saying at their results today that they weren't included in the LXI process because they were selling to Sainsbury's at the same time. They also announced that they just fixed the price on the 21 stores being bought back, with the cash coming back in March and July next year.

[elbrus55] 21/9/2022 08:16

Share price is now below the non-dilutive expected capital raise price of 140.5p they just announced.This suggests the capital raise may fail unless they get better terms off Sainburys, or the persuade the institutions it is a good deal for them.It is not binding so they can walk away

[elbrus55] 21/9/2022 08:07

Presumably there was an auction process and LXI won.Sainsbury's repurchased a load of supermarkets from SUPR (and BA pension fund) a year ago as they held an option. I don't know whether it is the same portfolio.

[spectoacc] 21/9/2022 07:38

SUPR don't have the money.