LXi REIT

LN: LXI

Market Cap£1,316m

Last Close 144.4p

LXi REIT is an externally managed UK REIT investing in high-quality, smaller lot size (£5–15m) assets, let on long index-linked leases to strong financial covenants across a range of sectors with defensive characteristics.

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Investment summary

Strong returns continued through Q322. Based on the 31 December 2021 (Q322) EPRA NTA per share estimate of 139.5p and including DPS paid the quarterly accounting return of 4.0% brought the year to date total to 14.6%, well above LXi’s target of at least 8%. LXi targets an increase in FY23 DPS of 6.3p (+5% vs FY22), fully covered. The proceeds of the upscaled, oversubscribed £250m (gross) equity raise that closed on 9 February were fully commited within four weeks in primarily off-market accretive acquisitions at a blended net initial yield of c 5.2% (current portfolio 4.5%). Each acquisition is fully let with a strong tenant covenant on long-term, fixed uplift leases, underpinned by affordable rents. Additional assets are in solicitors’ hands to be funded by existing flexible debt.

Y/E Mar
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2020A 38.5 31.9 30.5 6.3 22.9 27.2
2021A 42.8 36.9 39.2 7.5 19.3 26.3
2022E 59.0 49.3 51.1 7.4 19.5 34.3
2023E 85.3 73.1 67.3 7.4 19.5 23.5
Industry outlook

Long leases (22-year WAULT) and upwards-only, mostly index-linked or fixed uplift leases (96%) provide significant income visibility and protection against rising inflation and inflationary expectations. This should support income growth and capital values in the near term assuming no change in valuation yields.

Last updated on 24/05/2022
Content on LXi REIT
LXi REIT – Strong accretive growth continuing
Real Estate | research Outlook | 23 March 2022
Paper house under a magnifying lens
LXi REIT – Swift and accretive capital deployment
Real Estate | research Update | 23 August 2021
Paper house under a magnifying lens
LXi REIT – Strong FY21 with increasing momentum
Real Estate | research Update | 7 June 2021
Paper house under a magnifying lens
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Share price graph
Balance sheet
Forecast net debt (£m) 265.8
Forecast gearing ratio (%) 20
Price performance
%
1m
3m
12m
Actual (3.9) 6.8 4.7
Relative* (2.6) 3.9 2.0
52-week high/low 153.3p/132.8p
*% relative to local index
Key management
Freddie Brooks CFO
Charlotte Price Financial controller
Jamie Beale Partner
John White Partner
Simon Lee Partner