August 10, 2017 Property

LXi REIT plc ACQUISITION OF THREE PRIORY GROUP CARE HOMES IN NORTHERN IRELAND FOR £14.9 MILLION

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The Board of LXi REIT plc is pleased to announce that the Company has acquired the freehold interest in two Priory Group care homes in Northern Ireland and exchanged contracts to acquire a third Priory Group care home for a total portfolio consideration of £14.9 million, reflecting a net initial yield of 6.5% (net of acquisition costs to the Company).

Each of the Properties is fully let or pre-let to companies within the Priory Group, a leading provider of mental health and elderly care services. The Priory Group is ultimately owned by NASDAQ-listed Acadia Healthcare which has a market capitalisation of $4 billion and operates a network of over 570 facilities with over 17,000 beds.

The leases have a weighted average unexpired term of 29 years, without a break, and are subject to fixed annual rental uplifts of 2.5% p.a. compound.

The Properties are located in Armagh and Newtonabbey, in Northern Ireland, and comprise modern, purpose-built care homes for individuals with mental and/or physical disabilities. The Newtonabbey property comprises a newly built facility with 36 bedrooms, which opened in February 2017. The Armagh property (“Armagh 1“) comprises a recently built facility with 30 bedrooms, which opened in 2012.

The third property (“Armagh 2”) will form an extension to Armagh 1 and will comprise 34 bedrooms.  Armagh 2 has been fully pre-let (as described above), detailed planning consent is in place and construction works have commenced, with practical completion scheduled for Q1 2018. The Company has paid the vendor a 10% deposit for Armagh 2, with the balance of the price to be paid on completion of the purchase. The Company is not developing the site or funding the construction works and is not assuming development risk.


John White, Partner of LXi REIT Advisors Limited, commented:

“We are pleased to have acquired three modern Priory Group care homes in Northern Ireland, which provide the Company with an attractive net initial yield of 6.5% and a secure 29 year income stream with guaranteed annual rental uplifts. This is the Company’s first acquisition in Northern Ireland and further geographically diversifies our portfolio with an accretive net initial yield.”

LXi REIT plc £4.5 MILLION ACQUISITION OF A LONG-LET SUPPORTED LIVING PORTFOLIO

The Board of LXi REIT plc is pleased to announce that the Company has completed the acquisition of the freehold interest in a portfolio of regulated long-let supported living properties located in Yorkshire (the “Portfolio“).

The purchase price for the Portfolio is £4.5 million, reflecting a net initial yield of 6.0% (net of acquisition costs to the Company).

Each property is immediately income producing and has been let on a new 25-year lease, with no tenant break, to a specialist Registered Provider of social housing. The Registered Provider is regulated by the Homes and Communities Agency and receives its funding for the rent payments directly from the relevant local authority.

 

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