LXi REIT

LN: LXI

Market Cap£1023m

Last Close 146.2p

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

With the recent £34m accretive acquisition of a nursery school portfolio the c £100m proceeds of July’s equity raise have now been more than fully deployed. Post-transaction acquisitions amount to £114m at an accretive c 5.3% blended net initial yield (existing portfolio yield 4.7%). Each of the assets acquired benefits from a long weighted average lease term to first break and inflation-linked or fixed rent uplifts and is let to high quality tenants operating in robust sectors. LXi continues to recycle capital and recently sold a food store for £7.8m following an unsolicited approach, reflecting a low exit yield of 3.8% (acquired by LXi at a 5.5% yield). Additional acquisition opportunities are well advanced, to be funded through the existing revolving credit facility.

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 23.2 27.5
2021A 42.8 36.9 39.2 7.5 19.5 26.6
2022E 61.1 52.5 50.9 7.5 19.5 20.2
2023E 68.6 59.5 56.6 8.1 18.0 20.1
Industry outlook

The pandemic and Brexit contribute to a highly uncertain UK economic outlook. Long upwards-only, mostly index-linked or fixed uplift leases (95%) provide significant income protection against inflation and should mitigate the cyclical volatility in capital values historically exhibited by the commercial property market.

Last updated on 20/10/2021
Content on LXi REIT
LXi REIT – Swift and accretive capital deployment
Real Estate | Update | 23 August 2021
Paper house under a magnifying lens
LXi REIT – Strong FY21 with increasing momentum
Real Estate | Update | 7 June 2021
Paper house under a magnifying lens
LXi REIT – Diversified, long income
Real Estate | Initiation | 19 April 2021
Paper house under a magnifying lens
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Share price graph
Balance sheet
Forecast net debt (£m) 294.5
Forecast gearing ratio (%) 31
Price performance
%
1m
3m
12m
Actual 2.4 2.4 32.1
Relative* (0.9) (2.2) 6.3
52-week high/low 149.6p/107.1p
*% relative to local index
Key management
Freddie Brooks CFO
Charlotte Price Financial controller
Jamie Beale Partner
John White Partner
Simon Lee Partner