LXi REIT (LSE: LXI)

Currency in GBP

Last close As at 04/12/2023

GBP0.95

1.05 (1.12%)

Market capitalisation

GBP1,636m

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 12.3 2.7 (18.0)
Relative 9.1 3.2 (16.7)
52 week high/low 118.6p/82.8p

Financials

In a trading update ahead of H124 results to be published in November, LXi REIT said that it expects to report EPRA net tangible assets (NTA) of 112p (FY23: 121p) having accrued the Q2 DPS of 1.65p that was paid in October. LXi continues to target a DPS of 6.6p (+4.8%) for the year, fully covered by cash earnings. The NTA decline was driven by a c 4% like-for-like reduction in the portfolio during the period and with rental growth continuing (completed rent reviews generated a 3.4% pa uplift) the valuation reflects a yield of 5.7% (FY23: 5.35%). As a result of the valuation movement, LTV has increased slightly to 38% (FY23: 37%), within the company’s target range of 30–40% and well within covenants. Debt costs are fixed with a maturity of more than five years at 4.7%. Near term, LXi remains focused on capital recycling through further assets sales and accretive lease regearing.

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 16.8 13.0
2023A 198.2 179.4 124.4 6.7 14.1 8.3
2024E 245.1 227.3 158.2 6.9 13.6 9.3
2025E 250.2 229.9 160.1 7.1 13.3 8.6

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

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