LXi REIT is raising about £75m from investors to pay for acquisitions including nursery and special education schools that are in demand as investments.
The real estate investment trust said it would place about 56.4 million new shares with investors at 133p each – a 2.3% premium to its estimated asset value and 7.9% less than the closing price on 23 June. The company will also offer shares to its retail investors.
LXi said its investment advisor had found £125m of investments, most of which were sourced off market through contacts and relationships. The planned investments include a group of nursery schools with new 30-year inflation-linked leases and special education day schools with 35-year inflation-linked leases and government-linked income.
The FTSE 250 group also intends to buy long-lease grocery assets pre-let to Lidl, the Co-Op and Sainsbury’s and some drive-through coffee sites.
Stephen Hubbard, LXi’s chairman, said: “This placing will enable the company to capitalise on a near term pipeline of sale and leaseback and other long income, forward funding opportunities. The properties in the pipeline are diversified across a range of defensive and structurally supported sub-sectors and let to high-quality tenant covenants.”
The group said its property portfolio was valued by an independent valuer at £1.08bn on 1 June, reflecting a 4.7% net initial yield. All subsectors rose in value since the end of March with industrial and logistics making the biggest gains. Recent purchases have risen by an average of 9%.
LXi’s shares fell 4.6% to 136.4p at 09:28 BST. The shares have gained almost 20% in the past year and hit a record high of 148p on 14 June.
