LXi REIT purchases two UK care home portfolios for €34.2m

LXi REIT purchases two UK care home portfolios for €34.2m

LXi REIT has acquired two separate portfolios of care homes and supported living properties for a total consideration of €34.2m (£30.3 m).Each of the portfolio acquisitions 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.


Acquisition of 31 ­year let care home portfolio for €32.19m at 6.5% NIY


The Company has acquired the freehold interest in five modern, purpose­built care homes in Leicestershire and Lincolnshire for a total consideration of €32.19m (£28.5m), reflecting a net initial yield of 6.5%.


Each of the Properties, benefiting from very high occupancy levels, is fully let to Prime Life, an established Care Quality Commission­regulated care operator which provides specialist facilities and services for elderly care, high dependency dementia and also for younger residents with learning disabilities, mental illnesses and physical disabilities.


The leases are immediately income producing and have an unexpired term of 31 years (expiring November 2048), without a break, and are subject to annual upward­only reviews index­linked to the Retail Prices Index (collared and capped at 2% p.a. and 3.5% p.a. compound).


Acquisition of 25­ year let supported living portfolio for €2.03m at 6.0% NIY


The Company has completed the acquisition of the freehold interest in a portfolio of regulated long­let supported living properties located in Lancashire and Yorkshire. The purchase price for the Portfolio is €2.03m (£1.8m), reflecting a net initial yield of 6.0%.


Each property is immediately income producing and has been let on a new 25­ year lease, with no tenant break, to a specialist registered provider of social housing. 


Both leases are the subjects to annual upward­only rent reviews index­linked to the Consumer Prices Index and the registered provider is responsible for the costs of repair, maintenance, insurance and outgoings.


Simon Lee, Partner of LXi REIT Advisors Limited, commented: "The Company has now deployed 92% of the net proceeds of its second issue of shares announced on 12 October 2017 and we are in solicitors' hands on further acquisitions which will fully absorb the outstanding balance of the fundraise in the next few weeks. Since the Company's IPO on 27 February 2017, the Company has deployed a total of €264.3m (£234m) of equity and debt capital across 29 acquisitions at an average net initial yield of 6.0% and with a weighted average unexpired lease term to first break of over 24 years."

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