LXi scraps plans to buy £500m Sainsbury’s portfolio

LXi has scrapped plans to buy a £500m portfolio of Sainsbury’s supermarkets. On Thursday the REIT announced it had exchanged contracts for the sale and leaseback of 18 Sainsbury’s supermarkets at a 5% yield. However, this morning it said that, following “detailed and supportive discussions with its shareholders”, it had withdrawn its offer. A statement from the REIT said: “The company has notified Sainsbury’s of its decision not to proceed further with the portfolio purchase or equity funding given the current stock market volatility.” The REIT had been positive about the deal last week, saying the stores benefited from several defensive characteristics: “Strong trading performance, very low and sustainable indexed rents, long-term ‘green’ leases, low site coverage and modern buildings that provide omni-channel sales optionality.” LXi said it would be discussing the possibility of an equity raise in order to part-fund the deal with potential investors. However, that has also been scrapped after shareholders responded poorly to the plans.   To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Image © Sainsbury’s