LXi inks €61m of UK commercial property deals

UK commercial property investor LXi REIT has acquired five hotel, industrial and retail assets spread across the country for a combined total of £55 mln (€61 mln).

The deals represent a weighted average net initial acquisition yield of 5.70%, net of transaction costs.

LXi said this compared favourably to the company's latest portfolio valuation yield of 5.13%, as of March 31.

Comprising four forward-funded projects and one standing asset, the firm said it was not assuming development risk and would be acquiring the properties on a fixed-price basis. LXi will receive an income from the developers during the construction periods.

The assets include a new Aldi-led scheme in Berwick-upon-Tweed, Northumberland, pre-let on a new, 20-year lease with five year rental uplifts.

LXi has also acquired three hotel projects - a Travelodge hotel scheme in Sandwich, Kent, with 75 keys; a new 70-bedroom Premier Inn hotel in Saffron Walden, Essex; and a new 82-bedroom Premier Inn hotel in Worksop, Nottinghamshire. All properties have been pre-let on 25-year leases, with five yearly rental uplifts in line with the consumer price index.

The fifth deal comprises a modern, purpose-built 178,617 ft2 (16,500 m2) industrial warehouse in Newton Aycliffe, Durham, which is fully let to Gestamp Tallent and guaranteed by its parent, Automotive Chassis Products UK. The tenant has a long lease, with just under 20 years unexpired to first break, and benefits from five yearly rent reviews.

'We are pleased to be acquiring, predominantly on a forward funding basis, these attractively-priced assets let on long leases to strong tenant covenants across robust sectors, which are expected to provide further diversified, secure and inflation-linked income and capital growth potential,' said Simon Lee, partner of LXi REIT Advisors.

'The attractive entry yields provide a substantial spread to both the company’s latest portfolio valuation yield and the low cost of our new revolving credit facility which is funding these acquisitions,' Lee added.


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