LXi REIT has exchanged contracts on the acquisition of the freehold interest in a portfolio of regulated longlet supported living properties located in Greater London (50%), Devon (30%), Surrey (14%), Essex (4%) and Northampton (2%). The purchase price for the Portfolio is €21.32m (£18.9m), reflecting a net initial yield of 6.0%.
Each property is immediately income producing and has been let on a new 35-year lease, with no tenant break, to a specialist Registered Provider of social housing. The Registered Provider is regulated by the Homes and Communities Agency and receives its funding for the rent payments directly from the relevant local authority.Each lease is subject to annual upwardonly rent reviews indexlinked to the Consumer Prices Index (uncapped) and the Registered Provider is responsible for the costs of repair, maintenance, insurance and outgoings.
The properties in the Portfolio comprise specialist, high quality supported living homes for individuals with physical and/or mental disabilities or other care needs.
The acquisition is being funded from equity resources following the Company's second issue of shares on 12 October, with senior debt finance expected to be introduced in the near term.
Completion of the acquisition is due to occur in the next few days.
Simon Lee, Partner of LXi REIT Advisors Limited, commented: "This supported living portfolio provides the Company with an attractive 6.0% net initial yield underpinned by unbroken 35-year, indexlinked leases, with strong underlying residential values."
