LXi REIT plc has invested circa €31.1m (£26m) in a number of retail developments let to Tesco, Home Bargains and Co-Op Group. The assets are secured to strong tenant covenants on long-term, index-linked and fixed uplift leases and are underpinned by affordable rents with strong ESG credentials. For each of these forward funding acquisitions, full planning consent is in place, the Agreements for Lease have been exchanged and the properties are being funded on a fixed price basis. The Company will receive a cash-backed income from the developers during the construction periods in line with the purchase yields.
The company has acquired, by means of a pre-let forward funding transaction, a 45,000ft² Tesco food store (75% of the total value) and a 22,000ft² Home Bargains (25% of the total value) in Houghton le Spring. The property will include 329 car parking spaces, as well as electric vehicle charging points, and comprises a large, nine-acre site. The food store has been fully pre-let to Tesco Stores Limited (the principal UK trading company of the Tesco group) on an unbroken 20-year lease. The starting rent reflects a low rent per sq ft and increases five-yearly in line with CPI inflation. The Home Bargains store has been fully pre-let to TJ Morris Ltd (the principal group company) on an unbroken 15-year lease. The starting rent reflects a low rent per sq ft and increases five yearly upwards only in line with open market value.