Lxi Reit Share Discussion Threads

[toffeeman] 06/11/2017 09:45

Where's the chart Skinny? :)

[skinny] 06/11/2017 07:54

The Board of LXi REIT plc (ticker: LXI) is pleased to announce the acquisition of two separate portfolios of care homes and supported living properties for a total consideration of £30.3 million.

Each of the portfolio acquisitions is being funded from equity resources following the Company's second issue of shares on 12 October, with senior debt finance expected to be introduced in the near term.

Acquisition of 31-year let care home portfolio for £28.5 million at 6.5% NIY

The Company has acquired the freehold interest in five modern, purpose-built care homes in Leicestershire and Lincolnshire (the "Properties") for a total consideration of £28.5 million, reflecting a net initial yield of 6.5% (net of acquisition costs to the Company).

Each of the Properties, benefiting from very high occupancy levels, is fully let to Prime Life, an established Care Quality Commission-regulated care operator which provides specialist facilities and services for elderly care, high dependency dementia and also for younger residents with learning disabilities, mental illnesses and physical disabilities. Prime Life is a family-owned business, with over 30 years' experience and currently operates over 1,800 beds across 60 homes in the UK.

The leases are immediately income producing and have an unexpired term of 31 years (expiring November 2048), without a break, and are subject to annual upward-only reviews index-linked to the Retail Prices Index (collared and capped at 2% p.a. and 3.5% p.a. compound).

Acquisition of 25-year let supported living portfolio for £1.8 million at 6.0% NIY

The Company has completed the acquisition of the freehold interest in a portfolio of regulated long-let supported living properties located in Lancashire and Yorkshire (the "Portfolio"). The purchase price for the Portfolio is £1.8 million, reflecting a net initial yield of 6.0% (net of acquisition costs to the Company).

Each property is immediately income producing and has been let on a new 25-year lease, with no tenant break, to a specialist Registered Provider of social housing. The Registered Provider is regulated by the Homes and Communities Agency and receives its funding for the rent payments directly from the relevant local authority.

Each lease is subject to annual upward-only rent reviews index-linked to the Consumer Prices Index and the Registered Provider is responsible for the costs of repair, maintenance, insurance and outgoings.

The Company has also now completed the acquisition of the £18.9 million 35-year let supported living portfolio, the exchange of which was announced on 16 October.

Simon Lee, Partner of LXi REIT Advisors Limited, commented:

"The Company has now deployed 92% of the net proceeds of its second issue of shares announced on 12 October 2017 and we are in solicitors' hands on further acquisitions which will fully absorb the outstanding balance of the fundraise in the next few weeks.

Since the Company's IPO on 27 February 2017, the Company has deployed a total of £234 million of equity and debt capital across 29 acquisitions at an average net initial yield of 6.0% and with a weighted average unexpired lease term to first break of over 24 years."

[tyranosaurus] 12/10/2017 08:58

"We are grateful for the continued support from our existing shareholders."

So grateful that we were not included in this fundraising.

[jonwig] 12/10/2017 06:09

"Applications have been received under the Second Issue for 58,731,707 Ordinary Shares which will be issued at a price of 102.5 pence per Ordinary Share."

[tyranosaurus] 21/9/2017 07:13

Existing shareholders not being offered any of these shares at 102.5p.
Thanks a bunch.

[jonwig] 21/9/2017 06:16

Further issue of new shares at 102.5p, non-pre-emptive. In theory up to 200m of them. Seem confident of their investment pipeline:

[jonwig] 11/9/2017 06:13

First fact sheet published on website (url in header). Interesting that no exposure to London, very small to SE.

[tyranosaurus] 08/9/2017 12:12

What will they do now all the money is invested ?
What are the odds on another share offer ?

[alan@bj] 21/8/2017 17:38

I'm with Toffeeman on this. Used car retailing is looking riskier at the moment, with the economy set to slow due to Brexit, and uncertainty in used car values, particularly diesels.

[jonwig] 21/8/2017 16:48

Toffee - I'd never heard of Motorpoint, so I can't judge. But its balance sheet looks OK (debt free), and I see it does a good volume in the used car market. I suppose it does a turn whatever happens to car prices.

And a "worthless asset"? Googling the site, their land could do housing development if nothing else. Embarrassing, but not terminal!

Notice the collar and cap offers some protection for the tenant.

[skinny] 21/8/2017 06:33

£5.7 MILLION ACQUISITION OF MOTORPOINT CAR SHOWROOM, LANCASHIRE

The Board of LXi REIT plc (ticker: LXI) is pleased to announce that the Company has acquired the Motorpoint car showroom in Burnley, Lancashire (the "Property"). The purchase price for the Property is £5.7 million, reflecting a net initial yield of 6.5% (net of acquisition costs), which is expected to rise to over 7.0% following next year's five yearly RPI-linked rent review.

The Property is fully let to Motorpoint Limited, the principal trading company of Motorpoint plc, a London Stock Exchange listed company which is the UK's largest independent vehicle retailer.

The lease has an unexpired term of just under 20 years (expiring in June 2037), without a break, and is subject to five yearly upward only rent reviews index-linked to the Retail Prices Index, with a collar and cap of 1% p.a. and 3% p.a. compound. The next rent review is due in September 2018.

The Property comprises a substantial car showroom facility, with extensive vehicle display and compound storage on an 8.6 acre freehold site. Internally, the main facility provides for a large customer area including a reception, sales area, offices and café. The remainder of the site provides for approximately 400 display vehicles. There are two further buildings used for the preparation, valeting and repair of vehicles.

The Property is strategically located fronting the M65 motorway in Burnley, Lancashire and the surrounding area comprises a mix of industrial and residential uses.

The acquisition is being funded from the Company's Scottish Widows debt facility.

Simon Lee, Partner of LXi REIT Advisors Limited, commented:

"This acquisition provides the Company with additional long-term, secure and RPI-linked income at an attractive yield and further diversifies its sector exposure. The property benefits from a strong residual value and is one of the tenant's top trading locations."

[jonwig] 14/8/2017 17:58

Yieldsearch - post #50 might be relevant:

Interesting - notice that the supported living acquisitions ... have uncapped rent reviews, but the care home ... was capped.

I wonder if the point is that the former revenues are essentially guaranteed by the local authorities (hence by government), but the latter is a purely private sector undertaking, and the potential for unlimited rent increases could bankrupt the lessee which would not benfit the lessor. Just my musing!

Am open to challenge on this, naturally.

[yieldsearch] 14/8/2017 17:54

Is there any visibility on the affordability of rent or rent cover?? Great to have long lease but if it is on over rented or not affordable terms the lessee may go bust well before the end of the lease...

[jonwig] 14/8/2017 13:54

Coverage of this and similar:

[skinny] 31/7/2017 07:11

The Board of LXi REIT plc (ticker: LXI) is pleased to announce that the Company has completed the acquisition of the freehold interest in a portfolio of regulated long-let supported living properties located in Greater Manchester, Lancashire and Merseyside (the "Portfolio").

The purchase price for the Portfolio is £2.1 million, reflecting a net initial yield of 6.0% (net of acquisition costs to the Company).

Each property is immediately income producing and has been let on a new 25-year lease, with no tenant break, to a specialist Registered Provider of social housing. The Registered Provider is regulated by the Homes and Communities Agency and receives its funding for the rent payments directly from the relevant local authority.

Each lease is subject to annual upward-only rent reviews index-linked to the Consumer Prices Index (uncapped) and the Registered Provider is responsible for the costs of repair, maintenance, insurance and outgoings.

The properties in the Portfolio comprise specialist, high quality supported living homes for individuals with physical and/or mental disabilities or other care needs.

The acquisition has been funded from equity resources, with senior debt finance to be introduced in the near term.

[skinny] 24/7/2017 09:05

£6.1 MILLION FORWARD FUNDED PRE-LET INVESTMENT IN A NEW TRAVELODGE HOTEL, COSTA COFFEE SHOP AND KFC RESTAURANT DEVELOPMENT IN CAMBORNE, CORNWALL

The Board of LXi REIT plc (ticker: LXI) is pleased to announce that it has exchanged contracts to provide forward funding for the development of a new Travelodge hotel, drive-through Costa coffee shop and drive-through KFC restaurant (the "Property") in Camborne, Cornwall.

The development represents an investment of £6.1 million, reflecting a net initial yield of 6.15% on the asset acquisition (net of acquisition costs to the Company).

Upon practical completion, which is targeted for May 2018, the new development will comprise of:
· a 63 bedroom hotel pre-let to Travelodge Hotels Limited, the principal trading company of the Travelodge group, the UK's largest independent hotel chain with more than 520 hotels and over 38,000 guest bedrooms. This will account for 71% of the total rental income of the Property on a new 25 year lease (with no tenant break right), subject to five yearly upward only, CPI-linked rent reviews (collared and capped at 0% p.a. and 4% p.a. compound);

· a 1,800 sq ft drive-through coffee shop pre-let to Costa Limited, a subsidiary of Whitbread PLC, a FTSE 100 company with a market capitalisation of £7.1 billion. Costa is a leading operator of coffee shops, with 2,861 outlets across 30 countries. This will account for 12% of the total rental income of the Property on a new 10 year lease (with no tenant break right), subject to five yearly upward only open market rent reviews (capped at 3% pa compound); and

· a 2,950 sq ft drive-through restaurant pre-let to a leading KFC franchisee. This will account for 17% of the total income of the Property on a new 20 year lease (with a break right at year 10), with upward only open market rent reviews.

The Property is well located directly fronting the A3047 Tolvaddon Road, 100 metres from the main A30 arterial highway. Camborne and nearby Poole and Redruth combine to form Cornwall's largest conurbation and Camborne plays an important role to the wider catchment of the peninsula in providing housing, retailing and leisure facilities.

The three tenant pre-lets have exchanged, full planning permission is in place and the Company is acquiring the land and forward funding on a fixed-price basis. The developer will pay the Company a licence fee during the construction period.

The Company is not developing the site or assuming development risk. The acquisition is being funded from equity resources, with senior debt finance to be introduced in the near term.

John White, Partner of LXi REIT Advisors Limited, commented:

"We are pleased to provide the forward funding for this attractive long-let hotel and leisure development asset with a compelling initial yield, pre-let to tenants with strong covenants, and which adds further geographic diversification to the current portfolio."

[skinny] 21/7/2017 06:43

The Board of LXi REIT plc (ticker: LXI) is pleased to announce that the Company has exchanged contracts to acquire the Travelodge hotel and Burger King and Little Chef restaurants at Needham Market service station, Ipswich, Suffolk (the "Property"). The purchase price for the Property is £5.0 million, reflecting a net initial yield of 6.12% on the asset acquisition (net of acquisition costs).

The hotel and both restaurants are fully let to Travelodge Hotels Limited, the principal trading company of the Travelodge group, the UK's largest independent hotel brand, with more than 520 hotels and over 38,000 guest bedrooms, across the UK, Ireland and Spain.

The lease has an unexpired term of over 20 years (expiring in October 2037), without a break, and is subject to five yearly upward only rent reviews index-linked to the Retail Prices Index, with a high collar and cap of 3% p.a. and 7.5% p.a. compound. The next rent review is due in January 2020.

The Property comprises a purpose-built 40 bedroom hotel, a standalone 4,045 sq ft restaurant unit and parking for 81 cars and forms part of a roadside service station which includes a separately owned Shell petrol filling station. The Property is strategically located at the busy junction of the A14 and A140, approximately seven miles north west of Ipswich in Suffolk.

The acquisition is being funded from equity resources, with senior debt finance to be introduced in the near term. Completion is due to occur in the next few weeks.

Simon Lee, Partner of LXi REIT Advisors Limited, commented:

"This acquisition provides the Company with additional long-term, secure and RPI-linked income with an unusually attractive rent review collar of 3% pa and cap of 7.5% pa, offering significant rental growth in both high and low inflationary environments. The net initial yield of 6.12% is accretive to our portfolio running yield and will rise to at least 7.10% at the January 2020 rent review on the basis of just the minimum 3% pa rental uplift."

[tyranosaurus] 14/7/2017 15:11

With current acquisition and those in the pipeline they will have spent all the funds raised and the loan money.
I reckon they will be raising more in September.

[jonwig] 04/7/2017 06:10

A new £55m loan facility fixed for 12 years at 2.93%. A smart deal, I would say.

Also the placing programme of up to 200m new shares will be rolled out in the coming months. With 138m shares in issue at present, this would need to apply pre-emption rights if it's to be any size worth bothering with.

[toffeeman] 21/6/2017 07:32

If yields are 6% and cash ISAs get to 4% then the return is still 50% better!

[jonwig] 21/6/2017 06:59

Interesting - notice that the supported living acquisitions (today and 16 June) have uncapped rent reviews, but the care home (5 June) was capped.

I wonder if the point is that the former revenues are essentially guaranteed by the local authorities (hence by government), but the latter is a purely private sector undertaking, and the potential for unlimited rent increases could bankrupt the lessee which would not benfit the lessor. Just my musing!