LXI hits the ground running

The company specialises in acquiring commercial property assets on very long leases, typically 20 to 30 years, linked to inflation. Crucially, 83 per cent of property transactions were completed off market, thereby avoiding a sometimes costly bidding process.

And valuations on its selected assets are improving. Two disposals made in the six months to September generated an internal rate of return of 47 per cent, at a significant premium to acquisition cost and book value.

A recent fund raising brought in £175m, and after the half-year end LXI bought a pre-let Travelodge hotel at a net initial yield of 5.4 per cent on a 25-year lease, and also forward funded a Lidl and B&M discount food store at 6 per cent initial yield. Several other acquisitions have been secured, all with very long leases.

In November, it also secured a new 15-year agreement for a £75m loan facility, with total loans at a fixed cost of 2.9 per cent. However, gearing remained modest, with a loan-to-value ratio of 29 per cent, comfortably below the medium-term maximum target of 35 per cent.

On the dividend front, the company remains on track to fully cover its 5.5p a share dividend for the full year.