LXi REIT, the long income-focused investment trust, has inked a two long-let forward funding acquisitions in the UK for a total cost of £19.5 mln (€23 mln), reflecting an accretive 5.1% average net initial yield.
LXi has exchanged contracts on the pre-let forward funding of a Lidl foodstore and a Lok n’ Store self-storage facility in Basildon, Essex.
John White, partner, LXI REIT Advisors, comments: 'We see continuing strength in the discount grocery and self-storage sectors and these off-market forward fundings provide long-term leases with imbedded rental growth and the potential for capital growth, underpinned by robust tenants and residual values.'
The acquisitions will be funded using the company’s revolving credit facility and the LXi said it would receive an income during construction periods.
The foodstore has been fully pre-let to Lidl on an unbroken 20-year lease, with five yearly RPI inflation-linked uplifts (collared at 1% per annum and capped at 3%.
The self-storage facility has been fully pre-let to Lok n’ Store on an unbroken 25-year lease, with five yearly rental uplifts at a fixed growth rate of 2.5% pa.
Basildon is the largest town in the County of Essex and is well connected to London, Chelmsford and Southend. The property is situated at the junction of Miles Gray Road and A176 Upper Maine, opposite the established Pipps Hill retail park.
