LXi and Secure Income complete merger
LXi REIT and Secure Income REIT are putting the finishing touches to their £3.9bn tie-up, with the latter’s shares now owned by LXi and due to be delisted from the AIM market from 7am tomorrow (7 July).
The two companies agreed the deal to create a REIT with assets valued at almost £4bn in May.
Last month Simon Lee, fund manager at LXi REIT Advisors, told EG the merger will allow the enlarged company to pursue larger deals, including sale and leasebacks and forward fundings for existing tenants in the portfolio.
LXi REIT and Secure Income REIT are putting the finishing touches to their £3.9bn tie-up, with the latter’s shares now owned by LXi and due to be delisted from the AIM market from 7am tomorrow (7 July).
The two companies agreed the deal to create a REIT with assets valued at almost £4bn in May.
Last month Simon Lee, fund manager at LXi REIT Advisors, told EG the merger will allow the enlarged company to pursue larger deals, including sale and leasebacks and forward fundings for existing tenants in the portfolio.
“We have done lots of small forward fundings because that’s where there is lots of value. But where we also see lots of value is in the really big forward fundings – £100m, £150m, £200m lot-size forward fundings… With a £1.3bn market cap [as standalone LXi REIT], that would have been quite large, but with £3.9bn of assets post-merger, those type of deals would be 3-5% of the portfolio,” Lee said.
“So we can afford to do them without busting our concentration or diversification requirements, and benefit from the upside of getting 5%-plus yield from something that, if it was £30m or £40m, would be 4%.”
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