(Alliance News) - LXi REIT PLC on Friday noted three acquisitions in England and Scotland and one disposal following its GBP100 million share placing in July.
The London-based real estate investment trust said it has purchased a science campus, media studio and recycling facility for a total price tag of GBP80 million.
The acquisition cost indicates a 5.3% average net initial yield, compared to a current portfolio yield of 4.7%, the company said.
"[The properties] benefit from a long weighted average unexpired lease term to first break of 23 years, high-quality tenants, robust sectors and inflation-linked rental uplifts," LXi REIT added.
The newly purchased properties include a Life Science and Biotech campus in York, the company said, comprising 382,000 square feet of specialist facilities.
The York facility is currently let to outsourcer Capita PLC on a long lease with 25 years unexpired until the first break.
Rents at the campus are low, the company said, amounting to GBP7.50 per square foot, compared to an estimated retail value of GBP13.50 per square foot.
LXi REIT also purchased a media studio on the Pacific Quay area of Glasgow.
The 63,000 square foot purpose-built studios are currently let to Scottish television broadcaster STV Group PLC on an unbroken 20-year lease, the company added.
According to LXi REIT, rent for the media studio stands at GBP16.25 per square foot, well below the GBP35 per share foot usually charged for Grade A office rents in Glasgow.
Rent for the studio is set to increase every five years at a fixed rate of 1.5% per annum, the company added.
LXi REIT's third acquisition is a waste recycling and storage facility in Aberdeen.
The facility is currently let to waste management company Biffa PLC on a long lease with 14 years unexpired until the first break. The company said it had entered discussion with Biffa to increase the length of the lease further.
Rent for the facility is set to increase annually in line with consumer price index inflation, with a collar of 2% and cap of 4% per year.
Alongside its three new acquisitions, LXi REIT disposed of a Lidl store in Chard, Somerset for GBP7.8 million. The company said the sale price reflects a low exit yield of 3.8% and a material premium of 38% to the acquisition price.
LXi REIT said it purchased the supermarket location in a forward funding at a 5.5% net initial yield in 2017.
Partner of LXi REIT, Simon Lee, said: "These transactions demonstrate the company's continuing ability to make accretive and secure long income investments across a wide range of structurally supported sub-sectors, including its first investment in the life science arena, as well as highly profitable disposals."
The new acquisitions follows the company's oversubscribed placing in July, which raised GBP100 million to fund its "pipeline of sale and leaseback and other long income, forward funding opportunities".
The placing included 75.2 million shares priced at 133 pence each and an additional Primary Bid offer to retail investors of 2.8 million shares, which raised another GBP4 million.
The company added that it is currently: "In solicitors' hands on a range of pre-let forward fundings and sale and leasebacks, which will deploy the balance of the net equity proceeds of the placing."
Shares in LXi REIT were trading up 1.0% at 144.80p each in London on Friday morning.
By Scarlett Butler; scarlettbutler@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
