Lxi Reit Share Discussion Threads

[jonwig] 21/5/2018 07:12

First set of annual results look outstanding:



Growing NAV from 98.0p to 107.67p and raising current and prospective dividends shows some skill. But unlikely to trade above par in this climate.

[skinny] 02/5/2018 10:31

The Board of LXi REIT plc (ticker: LXI), the specialist inflation-protected very long income REIT, is pleased to announce that the construction works have now completed, on schedule and on budget, in respect of the new manufacturing and head office facility built for the GE Oil & Gas group in Cramlington, near Newcastle (the "Property").

The Company forward funded the Property on a fully pre-let and fixed-price basis at a 5.75% net initial yield (£11.09m) and received a developer licence fee during the construction period.

The Property has been fully pre-let to GE's Oil & Gas subsidiary, PII Ltd, whose lease obligations are guaranteed by its parent, GE UK Group. The lease runs for a term of 20 years (with no tenant break right) from completion of construction works and is subject to five yearly upward only rent reviews index-linked to the Retail Price Index (collared and capped at 1.5% p.a. and 3.5% p.a. compound).

The Property has been purpose built for the tenant to a high specification as its new headquarters office and industrial facility, comprising of a 74,110 sq ft two storey office and double height industrial space with associated car parking and service yards.

[tyranosaurus] 17/4/2018 10:49

floating for the benefit of the fund managers.
oh no not another REIT coming to the market.
probably be undersubscribed.
will invest in same areas as other REITs.
will take too long to invest the money.
will pay the same dividend as most other REITs
shares will probably linger around the issue price for ages (which is better that RESI).
yawn

[skinny] 17/4/2018 09:28

New REIT FSHR - yield aim 5% - any views?

[toffeeman] 21/3/2018 14:08

I am out for now

[toffeeman] 20/3/2018 13:13

Thanks Jon

I am not bothered - just looking at the prospect of selling now and buying back lower down!

[jonwig] 20/3/2018 12:50

Toffee - on a quick look, the investment manager fee is around 0.9% of the gross assets. Looks OK.

Do housing associations go bust? I think it's never happened, though one is in trouble at present I think. A lot of its tenants are pretty large companies. Retail is a small proportion, and I'd be most concerned about care homes.

They do say most of their properties have strong residual value, which might help.

It always pays to have concerns, but I haven't been particularly bothered by this company.

[toffeeman] 20/3/2018 12:18

For Discussion:

While LXI has secured real rent increases on the properties it has let, there remain two potential issues (or maybe others which I haven't thought of)

1. Are the overheads of running the Trust too high?
2. Could some of the tenants go bust?

It seems to me that the share price is currently discounting no 2 but if there is significant downward pressures on rents (eg CPR and MTC - even though I realise the LXI property portfolio differs!) Could tenants try to resist increases in the future - after all LXI can't very well be responsilbe for forcing the closure of sheltered housing!

I am concerned that the rice will fall further despite the yield

[toffeeman] 07/3/2018 13:18

OR.... the market sees some risk in the LXI portfolio otherwise why isn't the price higher?

5.5p on a price of 130 is still over 4%

AND why if they are fully invested do they need such a large board/staff complement.

Just saying (in from the start)

[winsome] 07/3/2018 12:29

I'm tempted to top up on these. My Natwest 9% prefs are currently at all time high of 171p and yielding only just a bit over 5% now. So maybe I should swap them for the fairly/lowly valued LXI shares.

I figure if we get another economic shock then LXI will hold their ground better.

[jonwig] 07/3/2018 07:12

Total return and dividend targets increased from IPO ones:

[skinny] 16/2/2018 08:01

The Board of LXi REIT plc (ticker: LXI) has declared an interim dividend in respect of the period from 1 October 2017 to 31 December 2017 of 1.0 pence per ordinary share, payable on 29 March 2018 to shareholders on the register at 2 March 2018. The ex-dividend date will be 1 March 2018.

0.9 pence of this dividend will be paid as a Property Income Distribution ("PID") and 0.1 pence will be paid as an ordinary UK dividend ("non-PID"). PID dividends are paid out of tax-exempt property rental income. Dividends paid from licence fee income that the Company receives from developers during the construction period on forward funding projects are treated as non-PID dividends.

Shareholders entitled to elect to receive PID distributions without deduction for withholding tax should complete the declaration form which is available in the Investors section of the Company's website, www.lxireit.com and returned to the Company's registrar, Link Asset Services, at The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.

[jonwig] 05/2/2018 12:00

It's good to see they regularly give all the numbers for their acquisitions. So they get a net yield of around 6.2% on debt costing them 2.85%.

How 'safe' are the properties? The Dundee students pretty secure, the Rotherham biomass a slight odour, I guess!

[skinny] 05/2/2018 11:44

£3.4 MILLION ACQUISITION OF STOBART BIOMASS STORAGE AND PROCESSING PLANT, ROTHERHAM, YORKSHIRE

The Board of LXi REIT plc (ticker: LXI) is pleased to announce that the Company has acquired the freehold interest in the Stobart biomass storage and processing plant in Rotherham, Yorkshire (the "Property") in a sale and leaseback transaction. The purchase price for the Property is £3.4 million, reflecting a net initial yield of 6.2% (net of acquisition costs to the Company).

The Property has been acquired with a new 20-year lease in place and is fully let to Stobart Biomass Products Limited and guaranteed by its parent, Stobart Group Ltd ("Stobart Group"), a FTSE 250 listed company and one of the UK's leading infrastructure and support service businesses operating in the energy, aviation and rail sectors.

The new 20-year lease, which has no tenant break right, benefits from five yearly Retail Prices Index linked rent reviews (collared at 1.5% per annum and capped at 4% per annum).

The Property extends to a total of six acres and will be used by Stobart Group as a storage and processing site to supply the nearby 41 megawatt Templeborough Biomass Power Plant with biomass timber waste. The Property is located close to the centre of Rotherham and has good access to the national motorway network, with the M1 and M18 in close proximity.

The acquisition is being funded using the proceeds of the Company's new 11.5-year loan facility secured from Scottish Widows in December 2017 at a fixed rate of 2.85% per annum.

[skinny] 15/1/2018 07:22

The Board of LXi REIT plc (ticker: LXI) is pleased to announce that the Company has acquired a long-let student accommodation scheme in Dundee (the "Property"). The purchase price for the Property is £20.25 million, reflecting a net initial yield of 6.3% (net of acquisition costs to the Company).

The Property is fully let to Mears Group PLC ("Mears Group"), a FTSE listed company with a market capitalisation of £430 million and a leading provider of support services to the public and private social sousing and care sectors in the UK.

The lease has an unexpired term of over 21.5 years, with no tenant break right, expiring on 22 September 2039. The rent is reviewed annually in line with uncapped Consumer Prices Index inflation (collared at 1% per annum).

The Property provides 413 beds and comprises 379 single rooms within cluster flats of two to six beds, alongside nine one-bed flats and 25 self-contained studio flats. The Property has recently undergone a significant refurbishment programme, which completed in September 2017.

The Property is strategically located in the centre of Dundee, within a five minute walk of both the University of Dundee and Abertay University. The University of Dundee has been named The Times Good University Guide's Scottish University of the Year for 2016 and 2017. The University of Dundee has a population of 14,910 students and Abertay University has a population of 4,005 students, providing strong occupational demand.

The Property benefits from a high level of occupancy and the city of Dundee has a strong underlying supply/demand imbalance for student housing, with university provided accommodation in Dundee representing only 15% of total stock.

The acquisition is being funded using the proceeds of the Company's new 11.5-year loan facility secured from Scottish Widows in December 2017 at a fixed rate of 2.85% per annum.

The Company has now deployed £263 million of equity and debt capital (excluding costs) since its IPO in February 2017 at an average net initial yield of over 6%, with an average unexpired lease term to first break of 24 years, diversified across nine robust property sectors and 23 strong tenants and with 97% of the income inflation-linked or with fixed-uplifts. The Company is in solicitors' hands on further acquisitions which are expected to complete shortly and which will absorb the balance of its debt facilities.

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

"We are pleased to have acquired the Dundee student scheme, which further diversifies the Company's sector exposure. The acquisition provides a long-term, index-linked income stream at an attractive net initial yield, underpinned by an excellent location in a leading university city and a strong underlying trading performance."

[jonwig] 06/12/2017 17:49

December fact sheet:



Second share issue fully invested, gearing still below target.
Would be nice to get an open offer, but I doubt we will.

[jonwig] 23/11/2017 07:22

Interim results:



Quite an achievement to reach a NAV of 105.01p within six months, and a portfolio uplift of 8.5%. This really does deserve a share price premium.

Maybe the best bit: "Aggregate all-in debt cost across the portfolio of 2.93% pa, fully fixed for the 12-year loan term (expiring July 2029)."

[skinny] 13/11/2017 07:20

ORWARD FUNDED PRE-LET INVESTMENT AND FULL DEPLOYMENT OF SECOND EQUITY ISSUE AND PORTFOLIO UPDATE

The Board of LXi REIT plc (ticker: LXI) is pleased to announce that the Company has exchanged contracts on the pre-let forward funded acquisition of a new Premier Inn hotel in the East Midlands and has now fully deployed the net proceeds of its second equity issue of £60.2 million of 12 October 2017.

£6.9 million forward funded acquisition of 25-year pre-let Premier Inn hotel, East Midlands

The Company has exchanged contracts on the pre-let forward funding acquisition of a new Premier Inn hotel in the East Midlands (the "Property"). The total funding commitment is £6.9 million, reflecting a net initial yield of 5.20% (net of acquisition costs to the Company).

The Property has been fully pre-let to Premier Inn Hotels Limited, the principal hotel trading company of Whitbread PLC, a FTSE 100 company with a market capitalisation of £6.6 billion and the UK's largest hotel, restaurant and coffee shop operator. Whitbread Group PLC is the tenant's guarantor under the terms of the lease.

The lease will run for a term of 25 years from completion of the building works, with no tenant break right. The rent is subject to five yearly upward only reviews index-linked to the Consumer Prices Index (collared and capped at 0% p.a. and 4% p.a. compound).

Full planning consent has been granted, the tenant pre-let has exchanged 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. Completion of the purchase is due to occur in the next few weeks.

The acquisition is being funded from equity resources following the second issue of shares on 12 October 2017, with senior debt finance expected to be introduced in the near term.

Full deployment of second equity issue of 12 October and update on Company portfolio

Following the Premier Inn forward funding acquisition referred to above, the Company has now fully deployed the net proceeds of its £60.2 million second equity issue of 12 October 2017. The headline statistics for the Company's total portfolio acquired since IPO on 27 February 2017 are:
· £241 million of equity and debt capital deployed (excluding acquisition costs)

· Attractive average net initial property yield of 6.0%

· Long weighted average unexpired lease term to first break of 24 years

· 97% of the income is index-linked or contains fixed uplifts

· Assets are diversified across eight robust sectors: hotels (25%), supported living (24%), care homes (22%), industrial (9%), car parks (8%), discount retail (6%), leisure (4%) and automotive (2%)

· Rental income is secured against 19 strong tenants, including Aldi, Costa Coffee, General Electric, Home Bargains, Lidl, Motorpoint, Premier Inn, Prime Life, The Priory Group, Q-Park, SIG, Specialist Housing Associations, Starbucks and Travelodge

· Significant geographic diversification across 18 different counties in the UK

· The properties have been acquired, predominantly off-market, via 30 separate purchase transactions, with an average lot size of £8 million and a good mix of pre-let forward funding, forward commitment and built asset structures

[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 09:58

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

So grateful that we were not included in this fundraising.