The Company, a real estate investment trust (REIT) incorporated in England and Wales, is listed on the premium listing segment of the Official List of the UK Listing Authority and was admitted to trading on the main market for listed securities of the London Stock Exchange in February 2017.

LXi REIT intends to deliver inflation-protected income and capital growth over the medium-term for shareholders through investing in a diversified portfolio of UK property, that benefits from long-term index-linked leases with institutional-grade tenants. LXi REIT will only invest in assets with leases containing regular, upward-only rental reviews and will neither undertake any direct development activity nor assume direct development risk.

 

LXi REIT’s Investment Advisor is LXi REIT Advisors Limited, which is owned by the principals, shareholders and directors of Osprey Equity Partners Limited.

 

Annual fees paid to the Investment Advisor are highly competitive: annual fee of 0.75% based on market capitalisation (0.65% above £500 million); no performance fee.

Investment Objective

 

LXi REIT’s investment objective is to deliver inflation-protected income and capital growth over the medium-term for shareholders through investing in a diversified portfolio of UK property, that benefits from long-term index-linked leases with institutional-grade tenants.

 

Investment Policy (Summary)

 

LXi REIT will target inflation-protected income and capital returns through acquiring a diversified portfolio of UK property assets, let or pre-let to a broad range of tenants with strong covenants on very long and index-linked leases.

 

LXi REIT will seek to acquire high quality properties that meet the following key investment considerations:

 

  • the properties will be let or pre-let to institutional grade tenants, with strong financials and a proven operating track record;
  • very long unexpired lease terms (typically 20 to 30 years to expiry or first break);
  • rent reviews to be inflation-linked or contain fixed uplifts; and
  • each property should demonstrate strong residual land value characteristics.

 

LXi REIT will target a wide range of sectors, including office, retail, leisure, industrial, distribution and alternatives – including hotels, serviced apartments, affordable housing and student accommodation. It will also focus on growth sub-sector areas such as discount retailers, budget hotel operators and “last mile” distribution units fuelled by online retail.

 

LXi REIT will seek to only acquire assets let or pre-let to tenants with strong financial covenants and on long leases (typically 20 to 30 years to expiry or first break), with index-linked or fixed rental uplifts, in order to provide security of income and low cost of debt. LXi REIT will only invest in assets with leases containing regular upward-only rental reviews. These reviews will typically link the growth in rents to an inflation index such as, RPI, RPIX or CPI or alternatively may have a fixed annual growth rate.

 

LXi REIT will not undertake any direct development activity nor assume direct development risk.  However, LXi REIT may invest in fixed-price forward funded developments, provided they are pre-let to an acceptable tenant and full planning permission is in place. In such circumstances, LXi REIT will seek to negotiate the receipt of immediate income from the asset, such that the developer is paying LXi REIT a return on its investment during the construction phase and prior to the tenant commencing rental payments under the terms of the lease.

 

Where LXi REIT invests in forward funded developments:

 

  • LXi REIT will not acquire the land until full planning consent and tenant pre-lets are in place;
  • LXi REIT will pay a fixed price for the forward funded purchase, covering land, construction cost and developer’s profit;
  • all cost overruns will be the responsibility of the developer/contractor; and
  • if there is a delay to completion of the works, this will be a risk for the developer/contractor, as they pay LXi REIT interest/rent until practical completion occurs.

 

The Directors intend to conduct the affairs of LXi REIT so as to enable it to qualify as a REIT for the purposes of Part 12 of the CTA 2010 (and the regulations made thereunder).

 

LXi REIT’s full investment policy is included in its Prospectus, which can be found in the Documents section of this website.

Investment Manager

 

LXi REIT has appointed LJ Capital Limited as LXi REIT’s alternative investment fund manager (the “AIFM”).  LXi REIT and the AIFM have appointed LXi REIT Advisors Limited (the “Investment Advisor”) to provide certain services in relation to LXi REIT and its portfolio, including sourcing and advising on investments for acquisition by LXi REIT and due diligence in relation to proposed investments.

 

The Investment Advisor is owned by the principals, shareholders and directors of Osprey Equity Partners Limited ("Osprey"). Osprey was formed in 2011 and is 50 per cent. owned by LJ Partnership. LJ Partnership was established in 2009 and has grown to become a substantial, international multi-family office and asset manager, managing US$14 billion of assets, including US$6.5 billion of real estate assets, for families, private individuals and institutions.  It has over 250 employees and offices in Europe, the US and Asia.

 

Osprey has extensive expertise in the purchase and forward funding of commercial property assets let or pre-let on long, index-linked leases to institutional quality tenants across a wide range of sectors.  Its current tenants include Premier Inn, Travelodge, Aldi, M&S Simply Food, Sainsbury’s, Tesco, B&M, Home Bargains, Costa Coffee, McDonald’s and Holland and Barrett.

 

Osprey has executed 21 transactions in the last four years with a gross asset value of c. £700 million for family office and private client investors. The vast majority of these assets are let or pre-let to strong tenants on very long term, index-linked leases. Osprey has realised an average annual return of 20% per annum for its exited investments and an average dividend of 6.5% per annum.

 

Management Team

 

The key individuals responsible for executing LXi REIT’s investment strategy are:

Non-Executive Directors

 

All of the Directors are non-executive and are independent of the AIFM and the Investment Advisor. The Directors  receive their annual fees in LXi REIT shares (which are subject to a lock in from the date of acquisition by the Directors).