LXi REIT plc has purchased an Asda food store in Halesowen, Birmingham and a Compass training and conference facility in Stone, Staffordshire for a total €88m (£73m). The assets benefit from strong tenant covenants on long-term, fixed uplift leases and are underpinned by affordable rents. The company has now fully deployed the net proceeds of the €301.7m (£250m) capital raise, which closed on 9 February 2022.
Asda grocery store, which was built in 2008, comprises 73,000ft² and is fully let on a long lease with 22 years unexpired to first break and benefits from five-yearly rental uplifts at a fixed growth rate of 3% per annum compounded. The store also benefits from 600 parking spaces. The property benefits from a significant catchment population of 1.1 million residents within a 20-minute drive time. Asda is the UK's third-largest grocer, operating 600 stores and serving 18 million customers a week.
Following its acquisition of the Compass Milton Keynes site announced on 14 February 2022, the company has also acquired a second Compass training and conference facility extending to 127,000ft², on a substantial 18.5-acre site, in Stone, Staffordshire. The property is again fully let to Compass Group Holdings plc. The current rent equates to a low €14.5 (£12) per ft² and reviews annually with a fixed uplift of 2.5% per annum compounded. The property is well located and is underpinned by a strong residual and alternative use-value, including for potential residential use, with the property surrounded by recently developed, modern housing.
