LXi REIT (LSE: LXI)

Currency in GBP

Last close As at 05/12/2023

GBP0.97

1.35 (1.42%)

Market capitalisation

GBP1,655m

LXi REIT is an externally managed UK REIT investing in assets that are let on long, index-linked leases to strong financial covenants across a range of sectors with defensive characteristics.

The commercial property market is cyclical, historically exhibiting substantial swings in capital values through cycles. Income returns have been significantly more stable. Across all main sectors the market is continuing to adjust to higher bond yields and economic uncertainty, although price weakness in 2023 year to date has been much less pronounced than in late 2022. Investment activity remains weak.

Latest Insights

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Real Estate | Outlook

LXi REIT — Stronger, leaner and fitter

Real Estate | Outlook

LXi REIT — Strong accretive growth continuing

Real Estate | Update

LXi REIT — Swift and accretive capital deployment

Sector

Real Estate

Equity Analyst

Martyn King

Martyn King

Director, Financials

Key Management

  • Charlotte Price

    Financial controller

  • Freddie Brooks

    CFO

  • John White

    Partner

  • Simon Lee

    Partner

Balance Sheet

Forecast net debt (£m)

1205.8

Forecast gearing ratio (%)

56

Share Price Performance

Price Performance
% 1M 3M 12M
Actual 1.2 6.2 (18.0)
Relative (0.1) 5.6 (16.7)
52 week high/low 118.6p/82.8p

Financials

H124 EPRA EPS was up 12% to 4.07p and adjusted ‘cash’ EPS by 13% to 3.44p, with fully covered DPS and LXi is on track to meet its full-year DPS target of 6.6p (+4.8%), fully covered by cash earnings. Earnings are being driven by rent growth, a low sector-leading EPRA cost ratio of 7.1%, and fixed borrowing costs. Contracted rental income grew to £204.2m pa, with rent reviews in the period at an average 3.6% uplift. As guided, EPRA NTA fell to 112.4p (FY23: 121.1p) including a 4.1% l-f-l property valuation loss, following the sector-wide trend. The portfolio yield rose to 5.7% vs 5.35% in March. If completed, agreed property sales, primarily the £210m disposal of Travelodge hotels, will lower LTV (from 38% to 34%), reduce tenant concentration and confirm property values. LXi sees opportunities for accretive investment and hopes to benefit from further sector M&A activity.

Y/E Mar Revenue (£m) EBITDA (£m) PBT (£m) EPS (fd) (p) P/E (x) P/CF (x)
2022A 58.5 49.2 43.1 5.6 17.2 13.3
2023A 198.2 179.4 124.4 6.7 14.4 8.5
2024E 245.1 227.3 158.2 6.9 14.0 9.6
2025E 250.2 229.9 160.1 7.1 13.6 8.8

Research

Update

Real Estate

LXi REIT — Swift and accretive capital deployment

Update

Real Estate

LXi REIT — Strong FY21 with increasing momentum

Initiation

Real Estate

LXi REIT — Diversified, long income

Thematics

thematic

Real Estate

South African industrial property fundamentals are strong

thematic

Real Estate

South African retail property funds remain resilient

thematic

Consumer

IPO apocalypse

thematic

TMT

ESG, moving beyond the box tick

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