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LXI REIT acquires Reading garden centre, disposes of 'ancillary retail parade'

By Iain Gilbert

Date: Thursday 10 Jun 2021

LXI REIT acquires Reading garden centre, disposes of 'ancillary retail parade'

(Sharecast News) - London-based real estate investment trust LXI REIT said on Thursday that it has exchanged contracts on the forward funding acquisition of a 94,000 square foot garden centre in Reading for a total cost of £19.0m.
LXI REIT said the property, which was pre-let to Dobbies on a new 35-year lease, with no break right, benefitted from CPI plus 1% per annum rental uplifts, reviewed on an annual basis, with a collar of 1.5% each year and a cap of 4% every twelve months.

The FTSE 250-listed firm also highlighted that the acquisition price reflected an accretive 5.3% net initial yield and added that rent had been set at "a low and sustainable level" which was forecast to provide rent cover of at least two times.

Construction works were expected to wrap up in spring 2022, with the development set to be funded through utilising the LXI's revolving credit facility.

Elsewhere, LXI stated it had sold "a small, ancillary retail parade" acquired last year as part of its Co-op foodstore portfolio purchase, with sale proceeds of £575,000 representing a 100% premium to the purchase price paid by the firm.

LXI also noted it had "proactively completed" the extension of occupational lease terms on six Greene King pubs from 13 years to expiry to 20 years to expiry, without break, in return for a 10% reduction in the passing rent, a move the firm expects to have "a material positive impact" on the value of the assets.

Rent from the re-geared assets now represents 43% of the total rent of the company's pub assets.

As of 0900 BST, LXI shares were up 1.10% at 146.80p.

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